Overview: taxing times

Paul Jackson, chief executive of Vantis, the AIM-listed accountancy firm,
will have had few challenges as thorny as the one he is now facing. His firm,
which has grown hugely in the last few years on the back of acquisitions, is
embroiled in enquiries into charity tax reliefs.

At the launch of the firm’s interim results last week, Jackson launched the
firm’s defence.

What’s happened?

The schemes HMRC is chasing involve the setting up of companies with cash
from clients. The companies are floated and the shares

rise hugely. The shares are then gifted to charity, with the gift attracting
tax credits of 40% of the value.

Accountancy Age revealed in July that HM Revenue & Customs had launched a
clampdown on the schemes generally. More recently national newspapers, The
Sunday Times in particular, have revealed details of celebrity investors and the
charities involved.

But as far as Vantis is concerned, nothing much has happened, at least not
recently. There were visits to the firm and to some of its top advisers, but
those were in June.

Four companies Vantis was advising clients on are part of HMRC’s enquiries,
the firm admits: Clerkenwell Medical Research, Modia, Your Health International
and Signet Health International. Vantis has been rattled by HMRC interest. ‘We
are just a nice bunch of guys doing what we are doing,’ Jackson says.

He argues that the firm is being made an example of: ‘The American way is
what Brown wants to bring in, where everything that is not straightforward tax
mitigation is evasion. The government wants to send out a message, and there
appears to be a clear campaign to rough up the mitigation sector.’

As for the companies involved, Vantis is clear about its position: ‘The
shares were not manipulated by Vantis or any Vantis employee.

The rules have been strictly applied.’ Not only that, but Jackson says the
firm did not market the schemes.

What’s going to happen?

Nobody knows what HMRC is going to do, and suggestions that charges are
imminent or that key figures have been interviewed under caution appear to be
wide of the mark.

Vantis will be worrying about press stories and reputational damage. But
probably of more concern will be whether the schemes get the all-clear.

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