What are Tax Avoidance Schemes?
Tax avoidance schemes are complex mechanisms set up by businesses as a means of avoiding having to pay all or some taxes due. Tax schemes are complex and highly risky, with investors often unable to determine the extent of their liability at the outset, so they could be exposed to financial risk.
Tax avoidance schemes are the product of aggressive tax planning intended to reduce an individual’s tax liability. Tax avoidance is a legal means to maximise the tax efficiency of your earnings. Not all tax avoidance schemes are created equally, and many are invested into before it is clear whether the scheme qualifies for the tax benefit with H M Revenue & Customs investigation HMRC.
Investors will pay the tax provider a fee for entry into the scheme.
As HMRC aims to investigate each scheme, investigations can take years. In the event an investigation is decided in favour of HMRC, the participants will have to pay the tax due, plus penalties and interest. This is in addition to the initial costs of entry into the scheme and defending the HMRC investigation.
Below are some of the tax avoidance schemes investors are currently being warned about. These are just some of the schemes to look out for as you should always be wary of others that may sound too good to be true.
Tax Avoidance Schemes in the Spotlight:
- Film Schemes
- Gold Bullion Schemes
- Employee Bonus Schemes – Growth Securities Ownership Plan
- Interest Relief
- Contractor loan schemes
- Stamp Duty Land Tax avoidance
- Employment Allowance
- Employee Bonuses – Restricted Securities
- VAT contrived non-profit-making bodies scheme
- Business Premises Renovation Allowances schemes
- Gift Aid with no real gift
- Stripped Bond scheme
- Employment Benefit Schemes using fettered payments
- Plan Green
- Share Loss relief
- Property Business loss relief
- Taxing the rewards for work carried out for a UK based employee
- Avoiding income tax
How can a tax avoidance scheme be mis-sold?
Many tax schemes have been mis-sold to investors by advisors, as they are unsuitable for their particular needs and requirements, and therefore it is imperative that you seek compensation if you have been the victim of deliberate mis-selling in order to recoup the losses you have incurred.
Many schemes are set-up and promoted as great opportunities which result in £millions being invested even before HMRC reviews and verifies that they are legitimate tax avoidance strategies.
Tax avoidance currently costs the taxpayer £4 billion a year, according to the latest statistics recorded by HMRC. This total is very nearly as much as illegal tax evasion, which costs £5.1 billion. Together, they account for around a quarter of the £35 billion which is lost to the Treasury every calendar year, otherwise known as the “tax gap”. In normal instances, those involved in tax avoidance schemes will pay others to help minimise the cost of their tax bills. In some cases, avoidance can soon turn into evasion, and this is where the problem lies.
If you conceal certain information or lie about certain facts then you may be judged to be breaking the law. This could then result in a fine or even prosecution.
In order to help taxpayers, there are some warning signs which people need to look out for if they do not want to become involved in the saga revolving around tax avoidance schemes:
- The tax returns or benefits are out of proportion to any real economic activity, investment risk or expense.
- The scheme involves arrangements which seem very complex and long-winded, given what you want to do.
- The arrangement is on a “no win, no fee” basis or upfront fees are payable.
- The scheme involves money going around in a circle, back to where it started.
- The scheme involves contrived or artificial arrangements.
- Offshore trusts or companies are involved for no sound commercial reason.
- The scheme promoter either provides any funding needed to make the scheme work or arranges for it to be made available by another party.
- There are confidentiality or secrecy agreements.
- The scheme contains exit arrangements designed to side-step tax consequences.
- The scheme has been allocated a Scheme Reference Number (SRN) by HMRC under the Disclosure of Tax Avoidance Schemes (DOTAS) regime.
- A banking secrecy country or tax haven is involved.
- these arrangements fall outside the scope of tax avoidance
- the scheme is not disclosable toHMRC and leading Tax Counsel (QC) have agreed this
- the scheme has been disclosed and therefore you cannot be penalised
- we have been offering these schemes for years and have not been challenged
- you can receive tax-free payments that are compliant with tax law
- we have won all previous court cases in relation to these arrangements
- HMRC will write you a few letters and then give up and go away
- the arrangements are recognised by HMRC as not an avoidance scheme
- we have a successful track record of implementation
- leading Tax Counsel have advised that the arrangements are legal and work
- penalties can’t be applied as you have relied on advice of Tax Counsel
- you can earn more and mitigate tax and do so using tax efficient structures fully compliant with the law
- the product is low risk
- you’re fully insured against any defeat
- HMRC has approved the scheme – they’ve given it a reference number
Why Choose Cooper Stern?
- No-Obligation Review of your claim
- No Win No Fee if you decide to go ahead
- No hidden charges
- An easy 3 step process
- A team with over 30 years of experience
- Specialist advisors from the legal, financial, investment and banking sectors
- Friendly and accessible
- Comprehensive approach made simple for Investors like you!
Here at Cooper Stern we are always on hand to provide useful and valuable guidance if you have become involved in tax schemes and want to find out more about how you can go about recouping your losses under a potential claim for the mis-selling of the scheme.
Can I make a claim?
- Were all the options explained to you in a way that you were able to understand?
- Were you guaranteed the tax benefit?
- Were you aware that the tax benefit was yet to be approved by HMRC?
- Did you borrow all or a percentage of the investment funds from a Bank?
- Have you been issued with an accelerated payment notice?
Calculating your losses
- You may be entitled to compensation proportionate to the tax owed, set off against any tax benefit realised.
What do I need to do?
- Contact us today using this form or call us on 01204 328 287 to discuss the details of your complaint and to start the initial-no obligation review.
- Provide us with any evidence you may have from the time or allow us to submit a routine information request to your provider on your behalf to begin the no-obligation review.
- If you’re happy to proceed, we agree terms of our engagement. We draft and submit your letter of complaint, liaise with your provider throughout the process, manage and conduct the settlement process and advise you of potential alternative routes to redress.
We will manage the complaint from beginning to end, keeping you updated throughout, until a conclusion is reached and where redress is offered we help to ensure payment is received in a timely manner and that any final queries or consequential losses are dealt with before your case is closed.
What are the fees?
Your claim is conducted on a no-win no-fee basis, where your fee is calculated as a percentage only in event we secure a successful outcome for you. Our standard contingency fee is 20%.
For some claims, depending on the size and information request requirements, there may be disbursements or fixed fees which could arise prior to the commencement of your claim, but you will be made aware of these well in advance of any work that is commenced and will only become payable with your prior consent and agreement.
Here at Cooper Stern, we are one of the UK’s leading advisors on a range of mis-sold investment and financial products, and have specialists in tax avoidance schemes. We are able to provide advice on a range of schemes, including film schemes, property schemes, and loss relief schemes.
Our team of expert advisors are able to assess and evaluate the suitability of your product and can calculate your losses. This is the total amount which we would seek to claim on your behalf. We are regarded as an established authority when it comes to handling claims relating to mis-sold tax avoidance schemes and it is our aim to help you to achieve the redress you deserve.