Next big mis-selling scam: Tax schemes

The sale of complex investments in tax schemes could be the next big mis-selling scam around the corner, according to Martin Taylor, head of client relationships at Rebus Group.

Taylor said claims for mis-sold investments are happening more and more frequently. In just in the last year his own firm, Rebus, has seen its claim book increase by 500%.

This follows the payment protection insurance (PPI) and interest rate hedging products (IRHPs) scandals, which have so far yielded more than £13.6bn and £1.05bn in compensation respectively.

In the case of tax schemes the amounts claimed are likely to be significantly higher.

“We’ve got a success rate of over 90%,” he said. “We charge £1,500 per scheme but that’s needed to do the proper research and review the paperwork as this is often very complicated. We also charge a success fee, but only out of an award”

He added that unlike the PPI compensation market...

Continued...

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Comments

Congratulations to Mr Taylor    3 thanks

Markhamfc1 | | Permalink

Didn't this Martin Taylor use to work for Scion selling these very scheme's? so he got huge commissions on selling such products and now that the market is dead (good) he now jumps sides and takes a large slice for the mis-selling. Hilarious but you have to take your hat off to him.

BananaMan's picture

"Go wrong"...?    2 thanks

BananaMan | | Permalink

robertlovell wrote:

Taylor explained that when tax schemes go wrong HMRC takes them to tribunal and demands the tax back. As a result of the new legislation introduced in the Budget and included in the draft Finance Act, where anyone in receipt of tax relief from a tax scheme will be required to repay it later this year, Rebus anticipates an increase in claims.

 

"When tax schemes 'go wrong' " - Surely they don't go wrong, they were either above board and compliant with the legislation in place at the time of the transaction, or they weren't.

We would expect that the judgement of the courts would reflect this - however only time will tell.

 

Is this an article or an Advert??    9 thanks

mccleary | | Permalink

This is an excellent bit of self promotion from the Rebus Group. I hope AccountingWeb charged for it?

bookmarklee's picture

Two years ago    1 thanks

bookmarklee | | Permalink

In June 2012 I recall supporting the views of the then President of the CIOT, Patrick Stevens, when he suggested there may be a need to consider toughening up financial services mis-selling rules to attack the promoters and sellers of tax schemes that have no real prospect of working.

 

As regular readers will recall I have frequently written on the subject here (and on my blogs) partly to counter the views of those commentators who sought to encourage all accountants to promote tax schemes. And who implied that the accountants might be at risk of professional negligence if they failed to do so. This was never a reality - as now evidenced by the outcome of the Mehjoo v Harben Barker case.

 

Mark

tim@charlesaccountancy.com's picture

risk of professional negligence    3 thanks

tim@charlesacco... | | Permalink

Yes some regular contributors on accounting web did far more than imply, they made the out right statement (I'm not sure if actually on aw but certainly during their live talks) that if accountant's do not offer clients the aggressive/advance tax planning solutions then the accountant could be at risk of professional negligence   

bookmarklee's picture

"Go wrong..."

bookmarklee | | Permalink

BananaMan wrote:

"When tax schemes 'go wrong' " - Surely they don't go wrong, they were either above board and compliant with the legislation in place at the time of the transaction, or they weren't.

I think a better distinction is between those that are successfully challenged and those that are not. The former are the schemes to which Taylor was referring.

Most of the schemes promoted via accountants were thought to be compliant with "the legislation in place at the time of the transaction". The originators will have sought to convince the accountants that this was the case, otherwise the accountants would not have mentioned them to clients. But the Courts increasingly do not accept the original analysis and so reach a different conclusion to the promoters of the schemes.

Mark

Mis selling    3 thanks

AmandaE | | Permalink

I want to start by saying I don't necessarily agree or disagree with tax schemes - each has to be judged on its own merits.

But where in this is the client's responsibility to make sound informed judgements about their own tax affairs. How many clients come and say they want to save tax  and do we know of a way that can do that. After that they seem to loose sight of reality and many have signed up to schemes without fully understanding what the risks are and exactly what they are signing up to.

Whilst it should be beholden to the seller of the scheme to ensure anyone purchasing the product understands what they are buying, many clients were historically happy to sign on the basis that they were told the scheme saved them money without fully understanding how. Perhaps they should share some of the blame for subscribing to ideas they didn't fully understand - if they had spoken to their regular accountant I am they would have had the   risks explained in context - I know that is how I have always approached the issue with my clients.

I think if we look carefully at the context of scheme selling it is very different to the mis- selling of particularly PPI.

Above all Caveat Emptor.

 

 

Mis-sold?    2 thanks

HBTax | | Permalink

I have seen a few cases where clients have come to me with tax schemes and letters from Rebus about mis-selling. I am yet to meet any client that has been mis-sold a tax scheme and many have been "serial" avoiders over the years so can hardly plead ignorance when the whole thing comes crashing down.

Tax avoidance schemes have had their day for the time being which I think is a positive thing on the whole, but I absolutely hate these firms who crawl out of the woodwork to try and make money off the back of clients greed.

 

MARTIN TAYLOR-REBUS    3 thanks

jonnyd | | Permalink

The hypocrisy of Taylor takes my breath away. The same man who led Scion's sales force pushing their Film Partnerships and presenting fairy-tale performance figures now wants to sue the poor Advisers who believed him! You couldn't make it up!

[Moderated comments removed - Ed]

bookmarklee's picture

Mis-selling and greedy buying

bookmarklee | | Permalink

Even I (!) would accept that there is a world of difference between:

a) finding the latest scheme to satisfy a serial tax avoider's appetite;  and

b) informing clients and/or encouraging clients to take advantage of tax avoidance schemes.

The latter activity may be subject to claims of mis-selling by the accountant if a scheme on which they advised is subsequently found to be ineffective and, at the time the client entered into the scheme their attention was not drawn to the risk of this happening (along with the other risks, disadvantages and downsides). 

In my experience few clients (beyond the seral tax avoiders) were interested in such schemes once the risks, downsides and disadvantages were spelled out objectively. This is why it did not make sense previously (and makes even less sense now) for accountants to devote time and effort to understanding new tax schemes sufficiently to be able to explain them to clients. And equally why there was never any serious prospect of accountants being negligent if they failed to advocate complex tax schemes.

Mark

 

TAX EFFICIENT INVESTMENT SCHEMES

RobertG | | Permalink

The only ones we are involved with are those that are approved by statute and in turn HMRC such as SEIS and EIS or a hybrid of the two.  These schemes we use for British film investment. If the right project is selected with the right people with the real purpose of producing a film with a route to market it can be a definite alternative form of investment.  The SEIS scheme used on a fully financed film can guarantee almost 70% of the capital coupled with  the UK film tax credit.  It is a model that can produce very high returns for investors. As long as the film production company remains compliant for 3 years it avoids the risk of any challenge and all gains are completely free of CGT

www.graham-assoc.co.uk

 

Scammers

LeaRute | | Permalink

Banking system and taxation are the most attractive places for scammers’ activity. It is very difficult to create such security and legislative systems so nobody could use it to fiddle. But technologies are developing and BritainLoan suggests the highest level of safety and responsibility.

BananaMan's picture

safety....

BananaMan | | Permalink

LeaRute wrote:

BritainLoan suggests the highest level of safety and responsibility.

 

It also offers a website without https security