The practice of issuing 'forward contracts' - whereby super-wealthy UK domiciled individuals are permitted to pay a set sum to the Inland Revenue and leave undeclared the remainder of their earnings - is coming under increased scrutiny, according to a recent report.
The issue came under the spotlight earlier this year, when Scotland's most senior judge, Lord Gill ruled that the tax authority had been wrong to agree a £240,000 annual payment with Harrods boss, Mohammed Al Fayed. UK Paymaster General, Dawn Primarolo has already announced that no new agreements of this kind will be reached.
However, speaking to the Financial Director news service this week, an Inland Revenue spokesman revealed that the 16 or so arrangements currently thought to exist are now under increased scrutiny as a result of Lord Gill's decision.
'On agreements still in existence, there is taxpayer confidentiality, but as a general point we will be looking at existing agreements in relation to the ruling made in the Al Fayed case,' he explained, confirming that: 'We won't be making any more.'
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