HMRC has won a landmark case against a tax avoidance scheme promoter that could lead to the recovery of £110 million
The victory over scheme promoter, Root2, came after they failed to report a mass-marketed tax avoidance scheme, known as Alchemy, to the tax authority. The scheme aimed to extract profits from owner-managed companies in the form of winnings from betting on the stock market, which the scheme aimed to ensure would be tax free, rather than in the form of taxable employment income.
HMRC brought the case against Root2 under the Disclosure of Tax Avoidance Scheme (DOTAS) rules, which requires promoters to tell HMRC about tax avoidance schemes they design and sell.
The First-tier Tribunal agreed with HMRC that the promoter did not abide by the DOTAS rules.
HMRC does not approve tax avoidance schemes. Under DOTAS, promoters must notify HMRC of schemes that contain various hallmarks of tax avoidance. If a scheme has been notified under DOTAS, it does not in any way signify that it has been approved by HMRC.
HMRC regularly investigates tax avoidance schemes and where it finds rules have been broken, will always take action.
DOTAS guidance can be found here
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Published details of deliberate tax defaulters 27 November 2017
The list of deliberate tax defaulters has been updated with the latest penalties charged to those companies found to be falling foul of tax law.
Topping the bill is yet another metals trader ‘CMS Metals Ltd’ who have been charged £5,774,265.16 in penalties for deliberating defaulting on over £11 million in tax payments between January 2012 and December 2013.
See the current list of deliberate tax defaulters on GOV.UK.
Background HMRC will publish details of those people who have received penalties either for: deliberate errors in their tax returns deliberately failing to comply with their tax obligations
HMRC may publish information about a deliberate tax defaulter where: HMRC have carried out an investigation and the person has been charged one or more penalties for deliberate defaults those penalties involve tax of more than £25,000
However, their information won’t be published if the person earns the maximum reduction of the penalties by fully disclosing details of the defaults.
HMRC will publish enough information to identify the: deliberate tax defaulter
penalties imposed for their deliberate defaults amount of tax on which those penalties are based
HMRC will only publish this information once these penalties are final.
The law requires that any information about the person is not published for more than 12 months from the date it is first published, and the lists of deliberate tax defaulters won’t be captured for the National Archives.
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The Chartered Institute of Payroll Professionals
Policy News Journal
cipp.org.uk
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