TaxPersonal TaxRevenue ends tax deals with wealthy

Revenue ends tax deals with wealthy

The Inland Revenue has ordered its staff to stop striking deals with wealthy individuals after a court ruled the tax authority had been wrong to reach a 'forward' tax arrangement with Harrods owner Mohamed Al Fayed.

The Revenue had cancelled its arrangement with Al Fayed after he boasted of his wealth during the Neil Hamilton libel trial in 1999. He took the Revenue to court over the matter only to learn in a ruling of the Court of Session in Edinburgh that the tax collector had been wrong to make the deal in the first place.

As a result the Revenue is to extend its review of the procedure, which was looking into deals on a case by case basis.

Beryl St James, a spokeswoman for the Revenue, said: ‘At the present time we have instructed our staff to make no more agreements.’

The forward tax deals usually allow wealthy individuals with complex tax affairs to make a single tax contribution at an agreed level over a fixed period.

The Revenue estimates there may be as few as only two such deals currently valid and hopes to finish the review in the current year.

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