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HMRC tribunal victory on tax avoidance scheme.

A tax avoidance scheme set up to allow wealthy people to pay little or no tax on their income has been successfully challenged by HM Revenue and Customs (HMRC) in court. The court ruling has protected £156 million in tax from a scheme devised by NT Advisors LLP and sold by Dominion Fiduciary Services Group, which had 305 users.

HMRC specialist investigators unravelled the series of complicated financial transactions involved in the scheme, involving loan notes worth £6 million, which was intended to exploit the tax rules on stock lending.

However, the tribunal found that the arrangements involved little more than signing pieces of paper and making entries in accounts. Money moved in a circle and the tribunal found that it achieved nothing for the purposes of the relevant tax law. The tribunal said that if the scheme had been successful, its effect would have been to make the payment of income tax voluntary.

The Exchequer Secretary to the Treasury, David Gauke, said:
“The Government is committed to tackling tax avoidance schemes like this one which are artificial and work against the rules set by Parliament. These schemes are an affront to the vast majority of businesses and people who pay what they owe. We will pursue the minority who do not play by the rules.

Stuart Coleman, Manager of the Tax Department of ABDS comments:
“HMRC will challenge these schemes, however complex they appear to be. They have the skills and the expertise to effectively challenge tax avoidance, and as the NAO reported in November 2012, the HMRC has an 85 per cent avoidance litigation success rate.”

If you are unsure and need any help and advice on Self Assessment or want the burden taken off your hands, contact the ABDS Tax Department Now.

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

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