Tax Avoidance

Investors in failed tax mitigation schemes such as Omega Design and Build (part of the Montenegro project), Eclipse 35 and Invicta 43 now suddenly face massive tax demands. Some of those investors were mis-sold or negligently advised about those schemes and others like them.

The media portrayal of these schemes is that they were the preserve of the rich and famous whereas the reality is that those attracted to them were already struggling with their existing tax burden. As a consequence of being mis-sold these schemes, they now face a liability which often exceeds their investment ten-fold, and they have no means of paying it.

Where investors pursue those who mis-sold tax avoidance schemes to them, they normally have to pay for upfront legal fees and expenses. Even where a lawyer is prepared to work on the basis of being paid only on the successful outcome of the claim, there is still often the need to pay for other expenses such as forensic expert’s fees and Court fees for bringing the claim.

We have created a solution – Capital Dispute Finance. If we think you have a good claim, we’ll run it, fund it and cover all of the risks (such as the risk of having to pay your opponent’s costs if the claim is unsuccessful).

Through Capital Dispute Finance, we are able to empower those who are unable or unwilling to bear the costs and risks of bringing claims against their former advisors. We are increasing access to justice for those who are desperate to right a wrong, but have no means of doing so.

If you have received a notification from HMRC and would like to speak to our team please contact either Stephen Meade, Philip Jones or Andrew Brown

FAQs

  • Contact us in the first instance to talk through your scheme and the tax advice you have received.

  • Yes – providing you are open and honest about your financial affairs. However, deliberately concealing information or trying to take advantage of an artificial scheme is evasion and a criminal offence, so you could end up in court if you take part.

  • No. HMRC never approves a tax avoidance scheme. The promoters self-certify they have drafted a scheme and submit the details to the HMRC. The tax man then lists the scheme but doesn’t approve or endorse how it works.

  • It is likely that HMRC’s Counter Avoidance unit would lead investigations into tax returns involving schemes and will ask for information and documentation so that it can assess whether the tax return is correct or not. HMRC will liaise with you or your advisor to obtain the information which HMRC needs and at the end of the investigation HMRC will notify you of its decision and the outcome, which could involve further tax being due.

  • Most tax investigations are launched because HMRC have concerns about the integrity of a tax return and/or accounts submitted by an individual, partnership or business.

    If you receive a notice informing you that an investigation or HMRC compliance check has begun it is safe to assume that HMRC feel that you or your business has underpaid tax.

  • HMRC may seek to charge you penalties and interest on any taxes underpaid from the proper due date up until date of payment.

  • Possibly, but HMRC wins 80% of tax avoidance cases that are argued.

Warning Signs

If you are involved in a current tax scheme, look out for the following warning signs:

  • It sounds too good to be true and therefore cannot have been intended when Parliament made the relevant tax law (for example, some schemes promise to get rid of your tax liability for little or no real cost, and without you having to do much more than pay the promoter and sign some papers)
  • the scheme involves arrangements which seem very complex, given what you want to do
  • the scheme involves artificial or contrived arrangements
  • the scheme involves money going around in a circle, back to where it started
  • the scheme promoter either provides any funding needed to make the scheme work or arranges for it to be made available by another party
  • offshore companies or trusts are involved for no sound commercial reason
  • a tax haven or banking secrecy country is involved
  • the scheme contains exit arrangements designed to side-step tax consequences
  • there are secrecy or confidentiality agreements
  • upfront fees are payable or the arrangement is on a “no win, no fee” basis
  • the scheme has been allocated a Scheme Reference Number (SRN) by HMRC under the Disclosure of Tax Avoidance Schemes (DOTAS) regime.

If any of the above circumstances sound familiar, get in touch now as any delay could see your claim time barred.