Member Article

HMRC announce settlement opportunities for tax avoiders

The Government announced on December 3, 2012 that additional investment is being provided to HMRC to tackle tax avoidance and evasion. Following this, HMRC have stated that they are inviting some participants in certain schemes to settle their tax liabilities by agreement, without the need for litigation.

They believe that the offer is the best way forward for both the taxpayers and HMRC to resolve these disputes in a way which is cost-effective and consistent with the law.

However, HMRC have also warned that where people decline the settlement opportunity, they will increase the pace of their investigations and accelerate disputes into litigation.

It is understood that those who are eligible for the offer will be contacted by HMRC by the end of January 2013.

HMRC state: “The settlement opportunity is made in accordance with HMRC’s Litigation and Settlement Strategy. HMRC will advance all available arguments if disputes are litigated. As well as continued uncertainty, delay in resolution, additional costs and potential reputational damage, taxpayers who choose the litigation route may end up with a worse tax result than they would obtain under the settlement opportunity.”

They have confirmed that the settlement opportunity will be offered to participants in the following schemes:

• schemes which seek to use Generally Accepted Accounting Practice (GAAP) to write off expenditure or the value of assets to create losses either for sole traders, or individuals or companies in partnership;
• schemes seeking to access the film relief legislation for production expenditure;
• schemes seeking to create losses in partnerships through reliefs such as first year allowance, payments made for restrictive covenants, specific capital allowances.

Solicitor Andrew Swan, financial crime partner at Short Richardson and Forth LLP commented: “These offers do look attractive in terms of avoiding potentially damaging litigation. However, anyone that is contacted by HMRC should take early independent legal advice, so that they are fully informed before making their decision. My firm is available to assist.”

This was posted in Bdaily's Members' News section by Tom Keighley .