Well, many of those who have set up the schemes look like they are going to
have to pay some attention to HM Revenue & Customs, which is understandably
incandescent over the abuse of a tax relief scheme set up for a good cause. HMRC
would love to pin a fraud conviction on advisers or users who have abused these
The extent to which they will be able to depends on how outrageous the scheme
is. Cases where the value of the company has risen four-fold look unlikely to be
picked on, but where there has been a thousand-fold increase, taxpayers may not
be treated in such a friendly manner.
Such schemes have always had a whiff of unreality about them, and anyone who
thought that this was an easy win was exceptionally naïve. Such uplifts in share
prices are not just rare; they’re almost certainly fishy.
There is a broader point that users of the schemes should be aware of. These
schemes have cost the Exchequer £100m. That’s a £100m that could be spent on
hospitals, on improving public transport or other public services. Some that
will no doubt be dear to the hearts of the stars who used the arrangements.
Celebrities are fond of lecturing us on how public money should be spent,
lending their names to this or that initiative. But anyone involved in these
schemes should be aware: in failing to keep your side of the bargain in paying
the tax that pays for public projects, you have lost the moral right to dictate
how civic money should be spent.