Major Tax Avoidance Scheme Closed Down

[Bookworm]

Taken from HMRC website


A major tax avoidance scheme has been closed down today in a legislative move announced by the Paymaster General today.

The scheme which was disclosed to HM Revenue & Customs (HMRC) under the disclosure regime in Finance Act 2004 and would have sought to artificially generate losses by buying and selling the right to dividends on shares.

Paymaster General, Dawn Primarolo said:

"The use of avoidance schemes such as this which get around the intention of Parliament is unacceptable and unfair to the majority of taxpayers who pay their fair share.

The disclosure regime has enabled HMRC to make real progress in understanding how these complex schemes work and to close the loopholes upon which they depend at the earliest opportunity.

If necessary we will not hesitate to move against similar schemes in the future."


Anyone know who this is?

[ChimpMaster]

OK so they closed it down, and only because it was disclosed to them in the first place.

Were any of the "clients" of this scheme affected by the "back tax" threats?!

[Bookworm]

No idea, but it certainly indicates to me that I am safer being in my own Ltd Co than messing about with some of these schemes... or could I be so bold as to say I am not so greedy as others.

[Fleetwood]

Note use of the NL expression "fair".

[Mailman]

"The use of avoidance schemes such as this which get around the intention of Parliament is unacceptable and unfair to the majority of taxpayers who pay their fair share.

Since when has tax been about paying your fair share? BWAAAAHAHAHAHAHA!

Mailman

[expat]

Note use of the NL expression "fair".

I note rather the expression "The use of avoidance schemes such as this which get around the intention of Parliament is unacceptable". i.e. it's not enough to obey the law, you must obey what the government had in mind at the time!

[Mailman]

The thing that gets me is that parliament can, and does, make tax law retrospective YET they told all those families affected by the underground bombings that there is nothing they can do because the legislation required to make payments faster would come too late and wouldnt apply to them!

Mailman

[malvolio]

Pay attention. Tax law is not retrospective. Application of the regulations is. The budget does not set laws, it set regulations and parameters to existing law. Hence the apparent disconnect between tax law and compensation.

Also hence the row over S660. Hector tried to apply an existing regulation to a different set of circumstances. What he should have done (and what the High Court told him to do) was to raise new legisatlion through Parliament.

[Mailman]

Pay attention. Tax law is not retrospective.

Aye? The Government has gone out of its way to make its tax legislation retrospective in regards to tax avoidance schemes they have closed down in the last few years.

Mailman

[malvolio]

No, they have changed the scope of the regulations, which are based on existing tax law. For example, tax avoidance - minimising the amount of tax you pay by legal means - is legal, despite what Gordie wishes. He would need an Act of Parliament to amend the existing statute to make it illegal. He can deem various schemes and interpretations to be outside the scope of the current legislation (EBTs for example), make additional qualifications (e.g. IR35) and reapply old laws in a new way (as in S660a - whoops...). What he can't do is outlaw the practice itself without presenting a bill to Parliament.