Offshore tax avoidance schemes ‘still being touted to contractors’
Offshore tax avoidance schemes are still being peddled to try to entice UK contractors who are fed up with continental Europe’s generally higher tax liability, a payroll firm is warning.
Similar to their variants in the UK, the scheme providers targeting contractors on assignment in Europe claim to have approval from tax authorities, said the firm, Access Financial (AF).
But despite numerous reminders that HMRC does not approve schemes, and tax authorities’ “numerous crackdowns”, UK contractors are still finding the schemes “tempting”.
“Schemes are still being touted….to contractors operating in continental European markets, where the tax burden can be significantly higher than the UK,” AF’s Kevin Austin also said.
Reflecting recently on the firm’s overseas contracting guides, a contractor said the ContractorUK series showed that, “with the exception of IR35,” the UK tax system was on the more “sensible” side.
However, Mr Austin has reminded that, regardless of the level of liability, HMRC has the power to compel taxpayers to pay up-front, instead of having to pursue them through the court system.
He was speaking after his firm uncovered official figures showing that in the 2018/19 financial year, HMRC netted £560million after probing Britons with undeclared offshore assets.
The data means that thanks to 827 investigations yielding about £677,000 per taxpayer, HMRC’s Offshore, Corporate and Wealthy unit (part of its Fraud Investigation Service), has increased its tax haul from £490m in 2017/18, and from £325m in 2016/17.