The ‘tax scheme hit list’ published yesterday by HMRC has reinforced the need for individuals involved in tax planning schemes to seek independent advice and not make decisions based on information from HMRC or scheme promoters, warns UHY Hacker Young, the national accountancy group.
Michael Avient, Partner specialising in tax investigations at UHY Hacker Young, explains: “Many scheme users will be studying the hit list and will be worried if their scheme appears. However, this doesn’t mean that the scheme will be ruled unlawful and individuals should seek independent advice to ensure that they fully understand their situation before taking their next step. Neither the scheme promoter nor HMRC is likely to have the individual taxpayer’s best interests at heart.
“HMRC will obviously advise everyone to settle immediately, while some scheme promoters have decided they can no longer advise on chances of successfully avoiding penalties. A number of new firms, unregulated by any of the accountancy bodies or the law society have also sprung up, and individuals should make sure advice is obtained from suitably qualified and insured professional advisors.
“If individuals involved in tax planning schemes receive a notice from HMRC advice should be sought immediately. It may be necessary to make the payment but whether or not to pursue the tax relief should be considered carefully. Deciding to settle with HMRC before a final decision is made either by HMRC or the courts could prevent individuals making a future professional negligence claim against the scheme promoters.”
UHY Hacker Young says the introduction of up to £1million fines for tax scheme promoters may have increased the amount of schemes registering for Disclosure of Tax Avoidance Scheme (DOTAS) numbers, even though some may not have been required to do so.
Michael Avient continues: “Some ‘vanilla’ tax planning schemes will have been scared into registering for a DOTAS number because of the threat of up to £1m fines for the promoters. Just because the scheme’s DOTAS number is in the list doesn’t mean that penalties are inevitable, and only an expert can give individuals affected the advice they need on their next step.”