HMRC chiefs also
indicated that some of the set-ups, though not all, were likely to be
investigated on suspicion of fraud. The source said that HMRC was seeing
‘hundreds and hundreds and hundreds’ of the schemes and that HMRC believes they
have seen ‘fraudulent activity’ in connection with the schemes.
The tax authorities regard the deliberate abuse of the Gift Aid scheme as
beyond the pale, and an inappropriate abuse of rules designed to help charities.
HMRC sources indicated that boutique firms, as well as a number of major
firms had sold the schemes. ‘The Big Four have stood up and said we do not do
this,’ the source said.
There is no suggestion that all of the schemes are fraudulent or abusive.
Weekend papers reported that some celebrities had admitted receiving the tax
reliefs but there is no suggestion that any of them are facing a fraud
The celebrities are thought to be merely the tip of the iceberg in terms of
the number of people exploiting the Gift Aid scheme.
The arrangements that concern HMRC work through the flotation of a company
into which the rich and famous invest. The companies rise hugely in value at
flotation, and investors then gift the shares to charity, qualifying for huge
Gift Aid tax reliefs. ‘The most ambitious schemes have seen 10p shares go up in
value 1,000 times,’ the HMRC source said. The companies then often lose their
Legal advisers have been urging charities that they are legally obliged to
accept the gifts.
Charities such as Outward Bound and The Prince’s Trust have been the
beneficiaries of shares that often lose their value quickly.
Some charities have disclosed a string of stakes in AIM-listed companies
thought to be related to the arrangements. They are forced to hold on to the
shares for a lock-in period, meaning significant write-downs of share
Poly Information, a company invested in by those using the schemes saw its
value rise four-fold on flotation.
Listed accountancy firm Vantis was visited earlier this year by investigators
from HMRC probing the schemes. A spokesman for the firm confirmed it had spoken
Sources said the firm did not work for the celebrities mentioned in reports,
nor did HMRC’s enquiries relate to cash shells.
Does Darwin's theory apply to taxation? Colin ponders...
The UK tax gap fell in 2014-15 to its lowest-ever level of 6.5%, revealed official statistics published today
Changes to the tax system is urged to support the growth of entrepreneurs, found a report from the Grant Thornton UK, the Institute of Directors, and the Prelude Group
The EC has been instructed to draft a European Union (EU) directive authorising an EU financial transaction tax, which would apply to ten of the EU’s 28 member states