A NEWSPAPER-BASED tax avoidance scheme worth £5.6m has been blocked in a tribunal by HM Revenue & Customs, clawing back £104m for the public purse through similar cases.
The scheme functioned by licencing newspaper mastheads to avoid tax, but the tribunal ruled subsidiaries of Iliffe News and Media were not entitled to tax deductions on payments made to its parent company for their use.
Between 2003 and 2005, various trading subsidiaries of Iliffe assigned the mastheads to the parent company and then licensed them back for a fixed term in return for a lump sum payment.
HMRC said the legislation was changed in 2005 in order to scupper schemes such as Iliffe's.
Jim Harra, HMRC director-general for business tax, said: "This is an important ruling against a marketed avoidance scheme and the latest in a series of successful HMRC challenges to such schemes. We will continue to challenge artificial arrangements such as this in the interests of the vast majority of businesses and people who choose to play by the rules."
Rather than simply cut and paste the HMRC press release, read the case and report that!
This was commercial tax planning, not a structured avoidance scheme like K2 or whatever it was called. The decision in terms of the IP law points was wholly beyond the remit of a tax tribunal and it is astounding that it felt qualified to give such a decision.
The question of tax law around the treatment of the licence is staggering - the result leads to absurdities within the scheme of the Act in question and smacks of a partisan court bowing to public pressure to defeat a perceived rather than actual avoidance scheme and, in doing so, misreading the law to achieve that.
As for the question of purpose, the desire to do a commercial transaction tax efficiently has long been recognised as acceptable. This decision turns that on its head and pays little attention to the true facts.
Posted by: Informed, 15 Nov 2012 | 23:30
Funny, I haven't read about this in the newspapers.....
Posted by: Winston Smith, 16 Nov 2012 | 08:45
Have you read the case Winston or are you in fact completely ignorant of the law and the facts at issue?
I suspect that you have not read it because it you had you might have something useful to say other than a strapline comment that means nothing other than to draw attention to your complete lack of understanding of this complex area.
In fact, are you related to Margagret Hodges?
Posted by: Informed, 16 Nov 2012 | 20:03
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