Falling Foul on Tax Avoidance; PERSONAL FINANCE

Article excerpt

The way in which the Government is stoking the debate on what George Osborne has called "morally repugnant" aggressive tax avoidance is changing the attitude of many wealthy individuals, but it has not stopped the promoters of high-risk tax avoidance from pushing their wares, chartered tax adviser Eamonn Daly is warning.

Mr Daly, a partner at Lodders Solicitors, said: "When asked, we advise clients that while heavily marketed highrisk tax avoidance schemes could technically work, they might be viewed by HMRC as aggressive, particularly where they rely on specific statutory exemptions and reliefs purely to avoid tax rather than the purposes which the legislation that introduced the exemptions and reliefs was intended to promote."

And he pointed out that whereas they might work according to the precise wording of the relevant law there was a risk that they could fall foul of general anti-tax avoidance provisions.

"Some scheme providers make additional charges to provide a fund for defending their schemes in the courts should they ever be challenged but of course there is no guarantee of success," he stressed.

HMRC launched a new consultation document in August entitled "Raising the stakes on tax avoidance". The closing date for comments was October 4, 2013.

Mr Daly said "The consultation follows two main threads. Firstly, a new regime for high risk promoters with implications for intermediaries and clients, and secondly a proposal targeting taxpayers who fail to settle with HMRC when HMRC considers that the legal issues in their appeal have been resolved by the courts.

"Put simply, the objective of the new proposals is to make it significantly harder to market avoidance in the first place. …