There have been quite of lot questions recently from people asking about different schemes.
The following is based on my own experience.
First of all, don't go there unless you have your eyes wide open.
OK, so you've read the above and you still want to go ahead. What should you look for in a scheme promoter?
You will notice in the above that I haven't mentioned the often touted Tax Counsel QC Opinion. Of course the scheme should have this but it should not be confused with any form of guarantee. After all, this is only one opinion no matter how qualified the Barrister. Also, remember who paid for this opinion and what they wanted it to say.
IMO, a promoter's previous track record in litigation is far more important than any one-off legal opinion.
If you are still reading this and haven't been put off yet, then I wish you the very best of luck!
The following is based on my own experience.
First of all, don't go there unless you have your eyes wide open.
- Under the new disclosure regime, you are almost 100% certain to be investigated by HMRC. Even if the investigation ultimately goes nowhere you will have to live with the uncertainty.
- Any investigation could drag on for years before it's resolved. There is no time limit under which HMRC have to complete their enquiries. In theory, they could keep your returns open indefinitely.
- The company operating the scheme could go bust, so any assurances they gave of defending the scheme could turn out to be totally worthless. You could find yourself having to pay for your own legal defence. Either that or you just end up throwing in the towel and paying HMRC what they want (+ interest).
OK, so you've read the above and you still want to go ahead. What should you look for in a scheme promoter?
- Pick a firm that has been around a decent length of time. Steer clear of anyone that has only set up shop to run a scheme. They are likely to disappear just as quickly at the first sign of trouble, leaving you holding the baby.
- Try to avoid companies which only operate schemes for contractors. You want someone who is specialised in tax planning, not administering contracts and basic accountancy. Many of the brolly companies have little or no experience in Tax Litigation.
- Choose a promoter that has a broad track record in tax planning and has succesfully fought off challenges from HMRC. Ask to see details of cases that they've won (& lost) at the Special Commissioners/High Court/Court of Appeal/House of Lords.
You will notice in the above that I haven't mentioned the often touted Tax Counsel QC Opinion. Of course the scheme should have this but it should not be confused with any form of guarantee. After all, this is only one opinion no matter how qualified the Barrister. Also, remember who paid for this opinion and what they wanted it to say.
IMO, a promoter's previous track record in litigation is far more important than any one-off legal opinion.
If you are still reading this and haven't been put off yet, then I wish you the very best of luck!
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