TaxCorporate TaxTribunal shuts down £156m avoidance scheme

Tribunal shuts down £156m avoidance scheme

A tax avoidance scheme ring-fencing £156m from the taxman is shut down after defeat at the first-tier tribunal

Tribunal shuts down £156m avoidance scheme

A TAX AVOIDANCE SCHEME ring-fencing some £156m from the public purse has been shut down after a first-tier tribunal ruling.

The scheme, devised by NT [No Tax] Advisors and sold by Dominion Fiduciary Serves Group, had 305 users. It was challenged by HM Revenue & Customs investigators after they identified a series of financial transactions involving loan notes worth £6 million which were intended to exploit the tax rules on stock lending.

However, the tribunal found the arrangement was based on little more than “signing pieces of paper and making entries into accounts”. The money moved in a circle and the tribunal held it served no other purpose than to save tax, adding that had the scheme proved successful, it would have been tantamount to making income tax voluntary.

It is the second scheme in as many months that NT Advisors has been publicly associated with, after it emerged that its founder also set up the Cup Trust, a registered charity used as a front for another avoidance scheme saving investors £46m in tax and artificially generating Gift Aid.

Speaking after the ruling, HMRC’s director-general for business tax Jim Harra said: “People who are tempted by this type of scheme should be warned that they carry serious risks. These include paying advisors expensive set-up charges, which can run into hundreds of thousands of pounds, on top of tax that is due and interest for late payment.

“HMRC will challenge these schemes, however complex they appear to be. We have the skills and the expertise to effectively challenge tax avoidance and we will continue to do so.”

Related Articles

Big names, little tax: Airbnb, Facebook, Kellogg’s, eBay

Corporate Tax Big names, little tax: Airbnb, Facebook, Kellogg’s, eBay

1m Alia Shoaib, Reporter
EU divided over radical tax reforms targeting tech giants

Corporate Tax EU divided over radical tax reforms targeting tech giants

2m Alia Shoaib, Reporter
How to educate your clients about tax avoidance

Corporate Tax How to educate your clients about tax avoidance

2m Clear Books | Sponsored
HMRC tax evasion assistance requests double in five years

Corporate Tax HMRC tax evasion assistance requests double in five years

5m Emma Smith, Managing Editor
Spring Budget 2017: Making Tax Digital

Business Regulation Spring Budget 2017: Making Tax Digital

8m Shereen Ali, Deputy Editor
CGT clampdown nets HMRC £124m – but could lead to increase in use of avoidance schemes

Corporate Tax CGT clampdown nets HMRC £124m – but could lead to increase in use of avoidance schemes

2m Austin Clark, Reporter
‘Google tax’ nets HMRC £281m

Corporate Tax ‘Google tax’ nets HMRC £281m

2m Emma Smith, Managing Editor
OTS report: Corporation tax should follow accounts

Corporate Tax OTS report: Corporation tax should follow accounts

4m Alia Shoaib, Reporter