Tax avoidance is a commonly misunderstood term. Our brilliant team can explain exactly what it means and how it differs to tax evasion.
Tax Avoidance is the operation of a policy, scheme or arrangement which seeks, directly or indirectly, to avoid the payment of tax by re-describing income or earnings as something that would not ordinarily be chargeable to tax (for example a loan or gift) which in turn will eliminate or reduce the sum chargeable to tax.
Tax avoidance is illegal within the UK under various overlapping pieces of tax legislation which can potentially leave the taxpayer with more than one tax obligation. Please see our website here which describes the difference between Tax Planning and Tax Avoidance.
In more recent years tax avoidance has become more complex to tackle as HMRC have sought to clamp down on such activities as part of its anti-avoidance strategy.
As a result, tax avoidance schemes have arisen to enable loans (which would not ordinarily be taxable) to be made via contractor loan schemes or to Employee Benefit Trusts which lend it on to the individual (avoiding the requirement to pay income tax).
These tax avoidance schemes are now largely illegal and from 5 April 2019 the employee may be at risk of a far more severe penalty in the even such loans remain outstanding, potentially going back up to 20 years – read more about these loan charges.
At Francis Wilks & Jones we have considerable experience of tax disputes and defending claims by HMRC or claims by liquidators appointed over companies which face such difficulties. We can assist you with any negotiations with HMRC, including accelerated payment notices, any disguised remuneration scheme issues, personal liability notices, VAT and PAYE security or any other claim by HMRC, including appeals to tax tribunals or insolvency claims.