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News - 21 November 2012

The Treasury is missing out on millions due to Aggressive Tax Avoidance.

A new report from the National Audit Office (NAO) has revealed that HM Revenue and Customs (HMRC) have a backlog of 41,000 cases worth £10.2bn in tax revenue.

They relate to schemes aimed at small businesses and individuals in what has been described by MPs as "eye-watering" potential avoidance.

HMRC believes most of the schemes are not valid and would be "defeated" if tested in court but closing them down can take years of legal wrangling.

Margaret Hodge, the chair of the Commons Public Accounts Committee says:
"People who pay their taxes promptly and in full will be dismayed to discover that the enormous level of tax avoidance taking place is overwhelming HMRC's efforts to combat it.

Experts who design and sell such schemes have to notify HMRC under a regime known as Disclosure of Tax Avoidance Schemes (Dotas).

Between 2004 and 2011, around 2,300 avoidance schemes were disclosed to HMRC, with over 100 new schemes emerging in each of the past four years. However, since April 2010, litigation has been opened in 110 avoidance cases. Of the 60 cases where judgments have been reached, HMRC was successful in 51.

Stuart Coleman, Manager of the Tax Department of ABDS comments:
"As tax avoidance schemes evolve so must the approach of The Government, which is building on the disclosure of tax avoidance schemes to give HMRC stronger powers to obtain information.”

If you need any help and advice for your Tax and the implications of the HMRC initiatives, contact Lavinia Newman, Stuart Coleman or Tonmoy Kumar to discuss how ABDS can help

ABDS Chartered Certified Accountants of Southampton.
Tel: 023 8083 6900  E-mail: abds@netaccountants.net

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