A TAX AVOIDANCE SCHEME that operated by channelling profits of a tax advisory business through employee benefits trusts has been closed down by a tribunal.
HM Revenue & Customs challenged £9m made in tax deductions made by companies owned by tax adviser John Dryburgh – Scotts Atlantic Management and Scotts Film Management – paid into employee benefits trusts.
The payments came out of profits earned by selling tax avoidance film schemes. The scheme involved trying to extract profits from companies while at the same time securing corporation tax deductions. Employers paid money into an employee benefit trust and claimed corporation tax deductions. The trust gave undervalued shares in a new company, causing a loss to the employer.
In denying the deductions, the tribunal has protected around £2.4m in tax.
Although Dryburgh is in bankruptcy, HMRC believes the money can be recovered.
The tribunal said: “There is no doubt that Mr Dryburgh not only lied to the tribunal in a material way, but he appeared also to have fabricated evidence, forged documents and thrown away a memory stick in order to destroy evidence.”
Exchequer secretary to the Treasury David Gauke added: “This scheme – like so many others – was not worth buying into. The government has made almost £1 billion available to HMRC to tackle the issues of avoidance and evasion and to ensure that the minority who try to avoid their responsibilities pay the tax due.”
Report argues that the government must change the way it makes tax and budget decisions
Committee expresses concern about costs to businesses and April 2018 implementation date
Andrew Tyrie airs views on the Finance Bill, 'Making Tax Policy Better' report, and Brexit
Top 25 firm HW Fisher & Co has acquired London firm Rhodes & Rhodes