HMRC has today (7th April 2022) named promoters of tax avoidance schemes for the very first time and warned users of these schemes that they could face large tax bills.
This is the first time HMRC has used new powers to name tax avoidance schemes and their promoters as part of a campaign to warn the public not to get caught up in tax avoidance.
Mary Aiston, HMRC’s Director of Counter Avoidance, said:
These schemes are cynically marketed as clever ways to pay less tax. The truth is they rarely work in the way the promoters claim and it’s the users that end up with big tax bills.
New legal powers allow us to name promoters and the schemes they peddle much faster, and this announcement is just the first step. But we need the public to be vigilant, and that’s why we’re also helping people identify, and steer clear, of these schemes through our Tax Avoidance – Don’t Get Caught Out campaign.
The two named schemes are:
- Absolute Outsourcing, of Foerster Chambers, Todd Street, Bury, Greater Manchester
- Equity Participation Scheme (EPS), promoted by Purple Pay Limited (PPL), of Gracechurch Street, London.
Both schemes involve individuals agreeing an employment contract and working as a contractor. The schemes pay contractors the National Minimum Wage with the remainder of their wage paid through a loan to try to avoid National Insurance and Income Tax.
By releasing the details of these schemes, HMRC is letting taxpayers know as early as possible so they can steer clear of them or exit them. HMRC will also regularly update the list by publishing the details of other tax avoidance schemes and their promoters. If a tax avoidance scheme is not shown in the list, this does not mean that the scheme works or is in any way approved by HMRC.
FCSA comment: If HMRC can identify scheme operators, then the next logical step is surely for HMRC to simply close them down and recover any lost tax revenue from them.