TaxPersonal TaxHMRC ups ante in warning leaflet to would-be tax avoiders

HMRC ups ante in warning leaflet to would-be tax avoiders

HMRC circulates leaflet warning of dangers of tax avoidance schemes

HMRC ups ante in warning leaflet to would-be tax avoiders

HM REVENUE & CUSTOMS has stepped up its campaign against tax avoidance, by issuing a document warning of the risks of entering into contrived schemes.

The four-page leaflet entitled Tempted by Tax Avoidance? warns “anyone tempted to use a tax avoidance scheme should think very carefully about the costs, the disruption caused by having to deal with HMRC enquiries and potentially lengthy litigation”.

“There is a big difference between using tax reliefs and allowances in the way in which they are intended to be used, and trying to bend the rules to avoid tax,” it adds.

The document goes on to detail the characteristics of tax avoidance strategies and uses case studies to illustrate the dangers of being involved in tax avoidance.

The circulation of the leaflet marks a ramping-up of the taxman’s aggressive stance against would-be tax avoiders, according to Kinetic Partners member Gary Ashford.

“This leaflet is part of their strategy to contact those persons direct and head off some of their appetite to enter into such arrangements,” he said.

“In recent months we have seen HMRC taking a very aggressive stance on tax avoidance schemes, to the point where we are seeing them open criminal investigations and Code of Practice 9 Contractual Disclosure Facility investigations into individuals on the basis that the scheme arrangements amount to potential fraud”.

Watt Busfield Tax Investigations founding partner Rebecca Busfield said she was “sure this will be quite effective in deterring tax payers and is useful in that it covers lots of the practical consequences of schemes failing”, with the caveat that “it’s very one-sided”.

“There are many who believe that tax avoidance schemes can still work if implemented correctly,” she added.

“HMRC do not win all cases that go to court. Each needs to be considered on a case by case basis, with reference to each specific tax payer.”

A spokesman for HMRC said the department “wants people to be aware of the consequences of using a tax avoidance scheme; at the very minimum they will face an enquiry, potential litigation, and uncertainty over the outcome they may face as a result”.

Related Articles

HMRC urged to clarify impact of income allowances on Self-Assessments

Personal Tax HMRC urged to clarify impact of income allowances on Self-Assessments

1w Alia Shoaib, Reporter
Wealthy individuals could circumvent top tax rate rises

Personal Tax Wealthy individuals could circumvent top tax rate rises

2m Alia Shoaib, Reporter
Industry reaction: Taylor Review does not go far enough in addressing tax issues

Legal Industry reaction: Taylor Review does not go far enough in addressing tax issues

3m Alia Shoaib, Reporter
The top three issues that the next government must address for accountants

Making Tax Digital The top three issues that the next government must address for accountants

5m Emma Smith, Managing Editor
HMRC cuts over 150 offices to reduce running costs

Corporate Tax HMRC cuts over 150 offices to reduce running costs

9m Stephanie Wix, Writer
HMRC tax evasion assistance requests double in five years

Corporate Tax HMRC tax evasion assistance requests double in five years

4m Emma Smith, Managing Editor
Rangers tax case to have ‘dramatic’ consequences for football and business

Legal Rangers tax case to have ‘dramatic’ consequences for football and business

4m Emma Smith, Managing Editor
HMRC collects record £5bn in inheritance tax

HMRC HMRC collects record £5bn in inheritance tax

4m Emma Smith, Managing Editor