HMRC wins legal case over tax avoidance scheme promoter
(2 minutes to read)
HMRC has won a legal case over tax avoidance scheme promoter Hyrax Resourcing Ltd, which will result in the tax body being able to collect over £40 million in unpaid taxes.
Hyrax Resourcing Ltd will now need to release details of their tax avoidance scheme to HMRC, as well as names and addresses of the 1,180 high earners who used it – if they refuse, they could face a penalty of nearly £6 million, as well as £5,000 per day for not fully disclosing the scheme.
Promoted by Hyrax, it was a disguised remuneration avoidance scheme which worked by paying scheme users in loans so they could avoid paying Income Tax and National Insurance on their earnings.
Scheme users were paid just enough to comply with the National Minimum Wage and the rest of their income was made up in loans which were transferred to an offshore trust in Jersey. The amounts received under loan agreements were not declared as income on the scheme users tax return, meaning they didn’t pay tax on all their earnings.
Mel Stride, Financial Secretary to the Treasury, commented, “HMRC is cracking down on the unscrupulous promoters who sell these highly contrived tax avoidance loan schemes.
“Promoters need to take note of this decision and make sure they contact HMRC urgently about schemes they haven’t yet disclosed.”
Got a burning question to ask on umbrella employment? Give us a call on 01206 591 000 or email firstname.lastname@example.org.