Britain targets financial advisers with new tax-avoidance fines

LONDON, Aug 17(Reuters) - Britain set out plans on Wednesday to punish financial advisers who tell their clients how to avoid paying tax, including hefty fines designed to target what it called the "supply chain of tax avoidance".

The plans, set out in a document inviting industry feedback, are the first action by Prime Minister Theresa May on a promise made before she took office to clamp down on legal tax avoidance and illegal tax evasion by corporations and wealthy individuals.

"People who peddle tax avoidance schemes deny the country of vital tax revenue and this government is determined to make sure they pay," Financial Secretary to the Treasury, Jane Ellison said in a statement.

Recouping revenue lost to tax avoidance and evasion has become an important part of efforts to balance Britain's public finances, as well as a political necessity to respond to voter outrage at perceived injustices in the tax system.

Despite years of trying to clamp down, opposition lawmakers and campaign groups say the government has failed to bring the problem under control.

In a July speech just before she was made prime minister, May named Amazon, Starbucks (Swiss: SBUX.SW - news) and Google , all of whom have been criticised over the amount of tax they pay in Britain, saying everyone had a responsibility to pay taxes.

Britain's finance ministry said tax authorities could be able to impose fines on tax planners, advisers and accountants who promote avoidance schemes. Advisers could have to pay a fine of as much as the avoidance scheme helped its users save, the document said.

"These tough new sanctions will make would-be enablers think twice and in turn reduce the number of schemes on the market," Ellison said.

Earlier this year, May's predecessor David Cameron responded to the so-called Panama Papers, millions of documents detailing the use of offshore companies for tax evasion, by promising to make it a criminal offence if companies failed to stop employees from instructing clients on ways of evading tax. (Reporting by William James; editing by Stephen Addison)