HMRC are now targeting homes and individuals from all walks of life in avoidance schemes, so it is said.
HMRC is currently challenging 65,000 schemes – the latest victory was against the Blue Box Scheme.
We were approached a few years ago by a Premier League footballer with such a scheme and when we looked through it there was a little paragraph saying that it wasn’t worth the paper it was written on. In other words, the organisers denied any liability whatsoever. Given that we advised against it and how right we were. That scheme has been blown out of the water and the players, who have invested in that scheme, are all now being chased for substantial sums of money plus interest plus penalties.
The problem is most of the schemes exploited legitimate perks when they were set up, but they do not stand up to a rigorous challenge by HMRC for the most part in the high courts.
So if you are in a scheme which involves arrangements which seem complex given that what you want to do are artificial or contrived, then you should seek advice from Tax Advisors and probably approach HMRC in order to try and arrange a settlement.
When we tried to do that a couple of years ago on behalf of a client, HMRC refused saying that the case was still in the courts and they weren’t prepared to negotiate even though our client wanted to pay the tax. Our stipulation simply was no interest or penalties, but we didn’t get very with it I must admit.
These things are going to drag on for 20 years at least – even the amount of schemes being investigated – HMRC can’t possibly do them given the staff they’ve got, which they are increasing admittedly but they are going to need some really high flyers to get onto these cases.
What’s happened is what used to be legitimate tax avoidance schemes have almost become criminal on a par with tax evasion which is of course criminal.