TaxCorporate TaxStagecoach tax avoidance stopped in its tracks by HMRC

Stagecoach tax avoidance stopped in its tracks by HMRC

HMRC clamps down on scheme used by the transport group and 11 other firms, which could see the taxman recoup £179m in avoided tax

Stagecoach tax avoidance stopped in its tracks by HMRC

A TAX AVOIDANCE scheme used by one of the UK’s largest bus operators has been shut down by HMRC.

Stagecoach group used an artificial scheme which attempted to make a loss in one of its biggest companies, hoping to cut their tax bill by £11m in the accounting period ending 30 April 2011. The transport firm used the scheme while being advised by KPMG.

However the first-tier tribunal ruled that Stagecoach failed to make a loss through the scheme, and agreed with all of HMRCs legal challenges.

Jim Harra, director general of business tax said: “This was clear tax avoidance. It was an attempt to manufacture losses to deny the public purse the tax due.

“We will challenge any attempt to abuse the rules to avoid paying what is owed.”

The taxman has been working hard to crackdown on businesses using similar tax avoidance schemes to the Stagecoach case, and is currently dealing with 11 similar cases which could fetch up to £179m in tax for the revenue.

HMRC has collected £485m in tax and interest from 16 other groups where similar schemes were used to try and avoid tax.

When contacted by Accountancy Age, a spokesperson for Stagecoach said that the historic tax had already been paid in full, and that it expects to pay over £35m in corporation taxes in 2015/16.

“We believe it is right that we pay our fair share of taxes and we are committed to doing so,” said the spokesperson.

“These historic transactions involved Stagecoach investment in its subsidiaries, and the first tier tribunal ruling did not challenge the commercial background behind those transactions. The tribunal did not however agree with the tax treatment Stagecoach had adopted and we will take time to consider the findings of the tribunal before deciding on the way forward.”

A KPMG spokesperson said: “We are unable to comment on specific client situations, particularly where they are the subject of litigation.”

 

 

 

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

4m 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