Legal advice on tax avoidance schemes will depend on the background of correspondence between you and HMRC.
For example
- whether you have received a follower notice; and
- whether representations have been provided to HMRC already.
A tax avoidance scheme is not a legal mechanism for managing your affairs, although legal advice is necessary where there is a dispute as to whether your arrangement is a tax avoidance scheme.
In the event you have participated in a tax avoidance scheme which has been disclosed to or investigated by HMRC, you may find yourself
- facing considerably higher costs than would have been borne had you filed a return for tax;
- such costs can often include your tax advisor’s costs, the original tax sum payable, interest, surcharges and penalties.
Can I recover losses from bad advice?
In the event you have received either legal or accounting advice on a tax avoidance scheme, all of these losses may be recoverable either by
- suing the tax advisor who originally advised on the scheme; or
- as an alternative, if you have employed a solicitor to advise on such a tax avoidance scheme then you may have redress against that solicitor for professional negligence. We can help you with these claims.
The above may (but not always) have professional indemnity insurance, which would cover such a claim, but such a claim may also face difficulties if their retainer excluded any claim under consequential legislation or which arose as a result of the interpretation of the scheme by HMRC.
Often it is the case that the tax advisor has disappeared or entered into some sort of insolvency process – where this has occurred their professional indemnity insurance may still cover your losses but it is important to address this urgently before such cover lapses.
At Francis Wilks & Jones we have considerable experience of professional negligence proceedings and commercial litigation. Additionally, should you find yourself subject to enquiries initiated by HMRC, we can assist with all negotiations in respect of accelerated payment notices, personal liability notices, VAT and PAYE security or any other claim – including appeals to tax tribunals or insolvency claims by liquidators and defending director disqualification claim.
