We can advise individuals who may have invested into one of a number of tax avoidance schemes and are now facing adverse tax liabilities.
In recent years HMRC have been particularly active in looking to recover lost revenue that it feels individuals have failed to pay as a result of a tax avoidance scheme. Many people who were advised to use one or more of these schemes may now be faced with large tax bills from HMRC (often significantly more than what they would have paid had they paid their tax as and when it fell due).
HMRC are entitled to recover what the amount of tax would have been had a tax avoidance scheme not been used as well as interest and penalty payments.
Tax avoidance schemes have taken many forms over the years but often include:
- Creating artificial losses which are used to reduce tax, such as investing in film productions.
- Off shore companies and trusts.
- Complex arrangements involving the person’s own money being ‘loaned’ to them.
- Employee benefit trusts.
Investors often entered into these schemes not knowing the risks involved. Their advisors portrayed these schemes as risk free and a legal way of reducing their tax bill. Often the advice was unsuitable for the individual. These schemes often paid large commissions to the advisors who referred their clients to use them.
If you have entered into a tax avoidance scheme and are now faced with an adverse tax bill from HMRC please contact us today.