24/01/23

UK: HMRC names five tax avoidance schemes in new crackdown.

As published on birminghammail.co.uk, Monday 23 January, 2023.

A new crackdown by HMRC has named and shamed five tax avoidance schemes. The Government publicised details of all the schemes, saying that although they each promised ways to pay less tax they usually resulted in higher tax bills.

Mary Aiston, HMRC’s Director of Counter-Avoidance, said: "These schemes are cynically marketed as clever ways to pay less tax. The truth is they rarely work in the way the promoters claim and it is the users that end up with big tax bills. HMRC will continue to use all the powers at our disposal to crack down on promoters.

"Anyone who thinks they may be involved in a tax avoidance scheme, or have been approached by a scheme promoter, should contact us as soon as possible to get help."

Three of the schemes were promoted by AML Tax (UK) Limited which last year was fined £150,000 for failing to provide HMRC with legally-required information as part of a tax investigation. The three AML-linked schemes named are:

• Annuity Arrangements, AML Tax (UK) Limited, 1st Floor, Blackfriars House, Parsonage, Manchester, M3 2JA
• AML Prefunded EBT, AML Tax (UK) Limited, 1st Floor, Blackfriars House, Parsonage, Manchester, M3 2JA
• AML Split Contract, AML Tax (UK) Limited, 1st Floor, Blackfriars House, Parsonage, Manchester, M3 2JA

The other schemes named are:

• Enhanced Umbrella, Tailored UK Services Ltd, trading as Tailored Resourcing, 67 Grosvenor Street, Mayfair, London, W1K 3JN
• Able Ltd / Contractor Central Accounting Ltd - Able Ltd: 2nd Floor, Queen Victoria House, Victoria Street, Douglas, Isle of Man, IM1 2LF / Contractor Central Accounting Ltd: The Axis Building Maingate, Team Valley Trading Estate, Gateshead, England, NE11 0NQ

HMRC said the three AML schemes "make use of complex company structures and directors’ loan accounts to extract profit, providing directors with income where Corporation Tax, Income Tax and National Insurance contributions were not correctly paid." It said the other two schemes "make one payment to users that is close to National Minimum Wage and then another disguised payment, which the promoters claim is non-taxable and Income Tax and National Insurance are not correctly deducted."

Naming promoters is one of a number of measures HMRC is using to help people identify avoidance schemes as part of its Tax Avoidance – Don’t Get Caught Out campaign.

HMRC says it has now issued the first penalties to those who facilitate or help to implement tax avoidance - these amount to 100 per cent of the fees that were charged. This sends "a clear message" that HMRC can make the sale or facilitation of tax avoidance schemes unprofitable, HMRC said.

These are the first cases to reach the penalty stage. HMRC is tackling the tax avoidance supply chain and says there are more than 150 enablers under investigation. Further information about published tax avoidance schemes and promoters can be found on GOV.UK.

HMRC pointed out: "This is not a complete list of all tax avoidance schemes currently being marketed or a complete list of all promoters, enablers, and suppliers. If a tax avoidance scheme is not shown in the list, this does not mean that the scheme works or is in any way approved by HMRC. There are other schemes, promoters, enablers, and suppliers that remain active, and HMRC will regularly update this list with these details."

Anyone who believes they are involved in a tax avoidance scheme should contact HMRC by emailing CAGetHelpOutOfTaxAvoidance@hmrc.gov.uk