Tax Avoidance Schemes - Are you aware of the rules?
2nd June 2014
Tax Avoidance Schemes – Are you aware of the rules?
So HMRC has raised £24bn tax in the last tax year, more than 15% up on the previous year. Apparently most of this income is the result of cracking down on tax avoidance schemes, and I am sure that those who have paid up following successful pursuit by HMRC through the Court will receive little sympathy from the public and will be making very little protest at their fate.
However this is probably just the start of tax collection operations in this area as the rules from last March’s Budget are likely to be actioned soon and they will enable the tax collector to demand tax payments up front where a ‘scheme’ has been entered into which, in their opinion, transgresses the borders of fair taxation.
Again, we are unlikely to hear any noises of protest from ‘hard done by tax avoiders’ given the current arguments about morality, and the exposure given to high profile individuals who have followed the advice of scheme providers. However it is important that a sense of proportion is retained as many ‘tax saving’ strategies are in place as a matter of policy and there is a wide grey area between the two types of planning.
HMRC have identified and publicised a number of actions which they do not consider fall foul of their rules, but many others have always been considered legitimate and the uncertainty created is not helpful to those trying to organise their affairs in a financially efficient manner.
It will be some time before the detail of what is and what is not acceptable tax planning is thrashed out and in the meantime there will be a fine line to be trod by many ordinary taxpaying businesses and individuals.
Written by Peter Hedgethorne, Director