Andrew Swan
Andrew Swan

HMRC’s continuing fight against tax avoidance schemes

The Coalition Government have sent out very clear warnings over the last year or so that they will take a tough stance on so-called ‘tax avoidance schemes’. They describe tax avoidance as a means of reducing tax liabilities by using the tax law to get an advantage that Parliament never intended.

Last year the Treasury stated: “We are committed to creating the right tax environment for business and individuals, which encourages enterprise and minimises red tape. In return we expect everyone to pay their fair share. And where we see tax avoidance, we will crack down on it.

It seems they were not wrong.

We have seen significant growth in the HMRC criminal investigation teams, particularly here in the North East, with substantial recruitment and high prosecution targets.

There has also been a significant number of recent court victories for HMRC in respect of tax avoidance schemes, some of which were heavily marketed and used by ordinary members of the public. Last month alone saw three substantial successes in the tax tribunals and Court of Appeal. The three schemes alone would have diverted over £200 million from the Exchequer.

Exchequer Secretary to the Treasury David Gauke said: “The Government is committed to tackling aggressive tax avoidance schemes and HMRC will pursue their users through the courts where necessary. These three HMRC wins are very welcome, demonstrating that if an avoidance scheme promises results that seem too good to be true, they probably are.”

Andrew Swan, financial crime Partner at Short Richardson & Forth LLP commented: “Tax evasion is being prosecuted more than I have seen before. It is quite apparent that HMRC are taking a much tougher stance on tax avoidance. I anticipate a lot of these cases making their way to the criminal courts. I would echo the words of Mr Gauke, if a scheme seems too good to be true, then it probably is.”

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