Have you been faced with a massive bill after being advised to utilise a tax avoidance scheme?
In recent years HMRC have been particularly active in looking to recover lost revenue it feels individuals have failed to pay as a result of the use of tax avoidance schemes.
Many people who were advised to utilise one or more of these schemes by their advisers may now be faced with massive bills from HMRC, way in excess of the tax they would have actually paid.
This is because HMRC are entitled to recover what the amount of tax would have been, had a tax avoidance scheme not been used, interest on that amount from the date the tax was due and they can also charge penalty payments. On top of this, the individual is faced with having lost the amount which they originally invested in the scheme.
Tax avoidance schemes have taken many forms over the years, but often involve the following:
- Creating artificial losses which are used to reduce tax, such as investing in film productions;
- Offshore companies or trusts;
- Complex arrangements involving the person’s own money being ‘loaned’ to them;
- Employee benefit trusts.
While many people went into such schemes fully understanding the risks, many people did not as their advisers simply portrayed these schemes as risk free, totally legal ways of reducing their tax bill. Often the advice was totally unsuitable for the individual as they could have reduced their tax liability using legitimate, government approved, tax reliefs.
Nevertheless, often these schemes paid large commissions to advisers who referred their clients to them and as a result some advisers may have failed to explain the risks to the clients.
If you have now been contacted by HMRC regarding use of a tax avoidance scheme or are concerned you may be, it may be that our expert financial mis-selling team can assist in recovering your losses.