New measures include strengthening the Disclosure of Tax Avoidance Schemes (DOTAS) rules, extending HMRC’s powers in obtaining disclosure of scheme users from financial advisers, and naming and shaming promoters.

David Gauke, exchequer secretary to the Treasury said today: “Some might say that consultation documents on tax administration are an effective cure for insomnia, but this is one that will keep the promoters of aggressive tax avoidance schemes awake at night.”

Targeted schemes are expected to include:

Buying a house for personal use through a corporate entity to avoid SDLT
Channelling money backwards and forwards through complex networks for no commercial reason but to minimise tax
Paying loans in lieu of salaries through shell companies
Using artificial losses deliberately accrued to claim back tax

The government move comes after a recent Court of Appeal decision ruling an avoidance scheme invalid that could result in billions of pounds in extra tax revenue for the government.

The court ruled against a scheme promoted by PwC and used by a businessman in a bid to avoid £11m in tax. When a further 200 taxpayers attempting to use the scheme are taken into account, the total cost in lost tax is expected to be nearer £100m.

If you need any help and advice for your Tax and the implications of the HMRC initiatives, contact Lavinia Newman, Stuart Coleman or Tonmoy Kumar to discuss how ABDS can help

ABDS Chartered Certified Accountants of Southampton.
Tel: 023 8083 6900 E-mail: abds@netaccountants.net

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