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HMRC Warns On Avoidance Schemes

By Amanda Banks,, London

13 August 2013

HM Revenue and Customs has issued a warning about tax avoidance schemes, advising that tax arrangements that seem too good to be true may lead to "years" of reputation-damaging litigation and reminding company directors of their personal liability for debts and costs that may arise from adopting "risky" tax avoidance strategies.

The warning also makes clear that just because a promoter may have told HM Revenue and Customs about a particular scheme under Disclosure of Tax Avoidance Schemes (DOTAS) and has been given a Scheme Reference Number (SRN), that does not mean that it has been approved. Rather, the allocation of an SRN should be seen as a warning sign.

HMRC urges those considering such schemes to take independent legal advice, and for those who may have become involved already to contact HMRC's Anti-Avoidance Group.

The warning comes as the Government issues a consultation on proposed legislation to curb the activities of "high risk" tax promoters. Under the plans, such promoters will have to share information with HMRC, and users will have to indicate they have used a high-risk product on their tax returns. Further, in situations where a scheme fails in court, users of similar schemes will have to adjust their tax returns along similar lines or risk a penalty.

TAGS: court | tax | tax avoidance | United Kingdom | enforcement | HM Revenue and Customs (HMRC) | HM Revenue and Customs (HMRC)

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