HMRC Is Shite

HMRC Is Shite
Dedicated to the taxpayers of Britain, and the employees of Her Majesty's Revenue and Customs (HMRC), who have to endure the monumental shambles that is HMRC.

Friday, 25 January 2013

HMRC Offers Relief For Tax Avoidance Schemes

The FT Adviser has published an article under the misleading headline of "HMRC Settlement To Offer Tax Evaders Relief On Losses" (avoidance, not evasion, as far as I can see) wrt HMRC's offer of 40% tax relief to investors who deliberately make a loss on investment.

HMRC has said investors in tax avoidance schemes designed to make a loss to offset tax liabilities will be offered the chance to claim relief the money they have physically invested in return for payment of tax against other invested capital, as part of a new settlement.

Investors will be able to recoup the equivalent of their contributions to such schemes, minus anything spent on “unallowable fees” including tax advice or “circular funding arrangements”.

Sole trader schemes are schemes which have sought to make a loss through a self-employed trade that would involve substantial expenditure said to be incurred in the trade, or a write-off of expenditure or the value of rights or assets through “generally accepted accounting practice”.

Under the new policy, the investor can claim relief on whatever amount they have invested and not anything invested via a loan or other means. Relief will be 40% of the amount invested personally by the trader.

HMRC said:
Whilst not of general applicability to sole trader schemes, within the specific terms of this settlement opportunity HMRC is prepared to settle with individual sole traders, irrespective of whether or not the promoter or the other participants in the scheme continue to disagree with HMRC’s view.”
This new handling strategy will not apply to cases already adopted for criminal investigation.

Tax does have to be taxing.

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