HMRC takes on tax scheme promoters

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There has been a spate of professional negligence claims against the promoters of tax avoidance schemes after a clampdown on "aggressive" avoidance by HMRC, according to legal and accountancy experts.

According to law firm RPC, the claims are made by individuals that took part in tax avoidance schemes that date from 2005 to 2007, when a lot of schemes were set up that are now being challenged by HMRC. Those being sued include "boutique" tax advisory firms, accountancy firms and financial advisers, RPC said.

Bluefin recently highlighted a RPC blog which said...

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About Nick Huber

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I’m a specialist business journalist and have a particular interest in tax and technology. 


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10th May 2013 12:51

Selling tax schemes

I have come across people who probably have been mis-sold these schemes and not been warned of the risks, although it should be pretty obvious there are no cast iron guarantees. When I talk to clients about potential schemes I ensure they are fully aware of the risks involved before they sign up. I also get them to sign a document that confirms this in writing so this argument can't be used down the track. In my experience most tax providers are pretty honest with the client about the risks involved but I have heard a fair few horror stories too. The fact is you need to have a certain mindset if you are going to get involved in these schemes and clients who are going to worry constantly about the potential failure of a scheme should not be getting involved in the first place.

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10th May 2013 14:16

Absolutely 100% spot on Mr Philpott

Actually couldnt agree more...

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10th May 2013 14:57

First of all

you have to look at the scheme and legalities.

If it's legal then you have to look at whether it's artificial.

When I start hearing about "risky schemes" and "clients should be aware of a potential failure" I tend to think "are these people really Accountants" or are they just greasy sales people. We've got enough of them in the banking industry.

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10th May 2013 16:06


I wish I had the nous to work out whether its legal there all artificial !

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17th Mar 2015 15:52


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13th May 2013 13:04

The word “Scheme”, itself, gives away that there's a fundamental

issue but they won’t tackle the real problem….being excessive taxation in certain countries.


Nothing will stop, and why should it, a multi-jurisdictional legal entity fulfilling its duty to maximise shareholder value through good tax planning.


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13th May 2013 17:52

HMRC takes on tax scheme promoters

The word 'scheme' itself should be enough to warn those planning to employ it that it is not entirely legal. Among the definitions of this word are PLAN, PLOT, CONSPIRACY.

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13th May 2013 18:07

Too much ....

.... to claim that a scheme is illegal (by virtue, under basic logic, of your claim that such isn't entirely legal). Some schemes work and are legal.

Do you work for HMRC?

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14th May 2013 09:37

The schemes are

legal otherwise HMRC would be able to claim "tax evasion" rather than agressive "avoidance". No doubt some bright spark will think of an RTI system of sales tax so that it wouldn't matter where a company is based.

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14th May 2013 10:46

Agree with Mr Philpot

I agree with Mr Philpot entirely.

Also, if a client decides to sue the promotor / accountant rather than allow the promotor to pursue the litigation through the Courts (ie: before the technical outcome of the planning is confirmed and litigation has run its course) isn't the promotor's defence that it wasn't given the opportunity to mitigate the loss - often appeals against a decison in the FTT in HMRC's favour are overturned in the higher Courts. (This assumes the costs of ongoing litigation are pre-funded and the client isn't being asked to make an additional cost contribution towards ongoing litigation). 




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14th May 2013 11:09

What are the damages?

The tax that could have been saved by using a different avoidance method?

The penalty for taking reasonable care? 0%

The costs of the client not reading the contract? Contributory negligence?

The costs of the client voluntarily surrendering the tax? Isn't that deliberately engineering a claim = no damages / insurance fraud.

The costs of a low interest loan?

Can't see it.

Expect a hike in your P.I. cover on the back of this bullshit though?


I should add I am not keen on these schemes but they are low risk and a low interest loan. Why wouldn't an unrepresented client just stick to their guns and let the tribunal sort it out rather than just pay up!


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