HomeFWJ TakeawayTax disputesDisguised remuneration and APNsHMRC claim tax avoidance scheme

Tax avoidance schemes can lead to significant claims by HMRC - and possible bankruptcy and winding up. Our expert team has helped 100's directors and business since 2002. Let us help you too.

A HMRC claim that you are a party to a tax avoidance scheme is a very serious matter and may arise where no previous disclosure of such a scheme has been made or which arises as part of HMRC investigations.

Where a tax avoidance scheme is suspected these schemes are currently facing pressure from HMRC for them to be abandoned or, as a minimum, harsh penalties to be paid for their continued use.

HMRC claims for use of a tax avoidance scheme are on the rise and will continue to be the focus for central government, following the much publicised misuse of such schemes and the increased funding provided to HMRC for the purpose of collecting the taxes unpaid through these schemes. Legislation, comprising the Finance Acts 2017, has further increased the penalty for using a tax avoidance scheme.

Current tax schemes in the spotlight

HMRC have a list of specific types of tax scheme which are currently in the spotlight because of their common use. This “hit list” can be found online as an update of its guidance notes, first published on 27 January 2014 and include:

  • payments by employers to contractors for deferred annuities;
  • tax schemes seeking to avoid loan charge which commenced from 5 April 2019 as a result of the Finance Acts 2017;
  • tax schemes seeking to avoid income tax charges to contractors via job boards, where the contractor receives loyalty points which can then be cashed in with the employer;
  • VAT supply splitting – where VAT payments are reduced by splitting a supply into smaller amounts for VAT purposes;
  • re-describing loans to avoid loan charges, which may be more common within close companies;
  • misleading advertising promoting tax avoidance schemes;
  • the supreme court decision on the Employee Benefit Trust used by Rangers football club.

In most circumstances, HMRC will notify you before commencing enforcement action or before issuing an accelerated payment notice. If no response is provided then enforcement will continue, with the result that any penalties, interest and surcharges will continue to increase and a winding up petition or a bankruptcy petition may be presented.

At Francis Wilks & Jones we have considerable experience of negotiations with HMRC, including accelerated payment notices, personal liability notices, VAT and PAYE security or any other matters including appeals to tax tribunals or insolvency claims by liquidators and defending director disqualification claims. Please call any member of our tax disputes team for help today

FWJ were very hands-on, getting involved from an early stage in seeking to avert an expensive set of litigation proceedings. I am more than happy to recommend their services, particularly when it comes to considering complicated issues or complex proceedings.

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