FORMER TAX director at Vantis, David Perrin, who has been found guilty trying to defraud taxpayers of £70m, wrote his own version of the Gloria Gaynor song “I will survive” to boast about a charity tax scam.
The 1970s disco song was originally about a spurned lover but, according to HM Revenue and Customs (HMRC), Perrin changed the lyrics to taunt the taxman about the success of a tax scam to tax rule on charitable donations.
Perrin, previously deputy managing director at Vantis, ran a tax scheme sold to wealthy taxpayers, which exploited the law on giving shares to charity. Perrin tried to claim up to £70m of tax relief on company shares donated to charities – despite the shares being worth a fraction of the relief being claimed.
The scheme allowed him to pocket more than £2m in fees from their unsuspecting clients, according to HMRC.
People who give land, property or shares to a charity, or sell them to a charity at less than their market value, can lower their tax bill by claiming relief on income tax and capital gains.
Tax avoidance schemes like Perrin’s, – sold to the wealthy individuals between 2005 and 2006 – will not survive now, according to HMRC.
Legislation on tax relief on charitable donations was changed in 2007 and 2010 have placed restrictions on how long the asset (for example, shares) must be held by the donor. And only the financial benefit to the charity can be claimed as a tax deduction. These changes stops a scheme like [the Vantis one] being effective as an avoidance device,” said a spokesman for HMRC.
Perrin was charged with cheating the revenue by dishonestly submitting and dishonestly facilitating and inducing others to submit claims for tax relief which falsely stated values of shares which were gifted to charities.
He will be sentenced on 9 February 2012. Confiscation proceedings are underway.
According to HMRC the Vantis scheme proved so popular that Vantis employees performed a “smug celebratory song” at their annual conference, to the tune of “I will survive”.
It included the verse: “They should have changed that stupid law, they should have buggered charity, but they have left that lovely tax relief, for folks to pay to me.”
Vantis collapsed in 2010. Accounting firm RSM Tenon bought parts of the Vantis business.