HMRC has warned taxpayers about tax avoidance schemes marketed to individuals and businesses claiming to be legitimate tax planning.
The schemes are often marketed as wealth management products or described as exciting investment opportunities, HMRC said in an update on tax avoidance schemes.
Some products may initially appear as genuine investment opportunities but they all try to reduce the amount of tax and national insurance contributions due on income through “contrived or artificial transactions that serve little or no commercial purpose” other than to produce a tax advantage, HMRC said.
Promoters marketing these avoidance schemes and arrangements terms may promise that:
- Arrangements fall outside the scope of tax avoidance
- The scheme is not disclosable to HMRC and leading tax counsel (QC) have agreed this
- The scheme has been disclosed and therefore you cannot be penalised
- We have been offering these schemes for years and have not been challenged
- We have won all previous court cases in relation to these arrangements
- HMRC will write you a few letters and then give up and go away
HMRC has advised taxpayers that are sent marketing for avoidance schemes to read its guides on the subject − Tempted by Tax Avoidance and Ten things a promoter of tax avoidance schemes won’t always tell you.