Need Tax Avoidance Scheme Help?
Reliable tax avoidance scheme help can be hard to find. This article will give you a useful over view of HMRC’s view of tax avoidance schemes. If you require specific help regarding your situation then please get in touch.
Although there are many different types of Tax Avoidance Scheme, one of the most common is the ‘Contractor Loan Scheme’. This is when the person who has entered into the scheme receives ‘loans’ via the scheme operator. In theory, as the amounts received are loans and not remuneration then this is not income and is therefore not taxable.
In reality, because these loans are never actually repaid, HMRC classes them as ‘disguised remuneration’ and are therefore liable to tax.
Two Common Myths Regarding Tax Avoidance and Contractor Loan Schemes
‘My Scheme Was HMRC Approved’
This is incorrect. Although you may have been led to believe otherwise when you chose to enter the scheme, HMRC has never approved any tax avoidance scheme to date. It’s simply not in their best interest to do so.
‘I Was Told That I Didn’t Have To Declare My Scheme’
Again, this is incorrect. All Contractor Loan Schemes are must be declared to HMRC. When a scheme is declared it is given a scheme reference number. The promoter of the scheme must provide this number to anyone who uses it.
Help From The Tax Avoidance Scheme Provider
Unfortunately, many of the companies that provided the tax avoidance schemes to users are no longer around to pick up the pieces. Some have simply shut up shop, whilst others have entered bankruptcy or voluntary liquidation. This is of little help to the user of the scheme, who’s left to deal with HMRC alone.
HMRC has recently highlighted 30th September 2018 as a deadline for notification. If users of Tax Avoidance Schemes don’t provide the necessary details to HMRC by this deadline then there are likely to be in a much less favourable position.
HMRC has indicated that it intends to ‘punish’ users whom don’t declare their involvement by incorporating all years for which the scheme was in place into a single tax year. Therefore, this could leave many users with massive tax liabilities.
Once a tax avoidance scheme fails i.e. a court rules that the scheme represents disguised remuneration, HMRC may then issue a ‘Follower Notice’ the anyone whom has entered into a similar scheme. This is essentially HMRC requesting that you rectify your tax affairs.
Failure to comply with the follower notice is likely to result in a penalty of 50% of the tax due.
If you need advice concerning a Tax Avoidance Scheme and wish to speak to an expert, please get in touch. You can do this by clicking the clicking the ‘Contact Us’ link at the top of our website – www.tmsterling.co.uk