HMRC has been cracking down on tax avoidance schemes and introduced measures in 2017 to claw back unpaid taxes from people who have used so-called ‘disguised remuneration schemes’.
HMRC has already contacted 40,000 people with loan charge demands and it expects to raise an extraordinary total of £3.2 billion in tax. Some individuals who have been involved in such schemes are now facing six figure tax bills.
One family wrote to the Guardian, stating they had received a bill for £400,000. The individual was a 56 year old who had worked in the IT sector for years and is now potentially facing bankruptcy with no other option. Another contractor is facing a tax bill of £200,000 and losing her home, despite insisting she made no money from the scheme.
These demands for payment enrage the people who argue that they often had little or no choice when they were working as a contractor but to enter into these schemes.
An IT worker who is currently earning £50,000 a year received a bill for £300,000. He had been involved in a tax avoidance scheme 10 to 20 years ago and he claimed “all he did was follow advice”.
Often individuals were misinformed and sold these schemes by tax advisers and accountants who they trusted and whose advice they relied upon.
It’s not just the contractors in the IT field who have been affected. Many workers in the health sector employed via recruitment agencies have been attracted by promises to increase their take-home pay. A leading British medical recruitment agency, aware of the scheme and the implications, recently wrote to 30,000 locum doctors, nurses and NHS clerical staff on its books, warning that if they were enrolled in tax-avoidance schemes they will be getting a large bill from the taxman.
HMRC state: “We’ve always been clear that these schemes do not work, warning against the use of tax avoidance schemes in the media and in publications such as our Spotlight series on gov.uk as early as 2009. HMRC have opened tens of thousands of inquiries into these schemes starting before 1999, making users and their representatives aware that their tax return was under investigation.”
I have received a tax bill from HMRC
If you have entered into a disguised remuneration scheme (or any other tax avoidance scheme) or you have now received a tax bill from HMRC, it is important you seek legal advice as soon as possible.
Whether you are an employer, employee or contractor, our expert tax solicitors and barristers can assist you in managing HMRC’s investigation and entering into negotiations by providing comprehensive legal advice and robust responses to the investigators. Our tailored team which also comprises of specialist forensic accountants can calculate what you owe and make representations on your behalf to HMRC.
If you feel you have been negligently advised by tax advisers or accountants in relation to a tax avoidance scheme, our professional negligence team can assist.
If you are unable to pay the debt or are facing a bankruptcy petition, our insolvency solicitors can advise you on your options.