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A tax avoidance promoter has been charged with an almost-maximum penalty of £1 million after a legal challenge by HMRC.

HMRC now have the power to name tax avoidance schemes for the first time as part of its campaign to warn the public against getting involved with such organisations

The promoter, Hyrax Resourcing Ltd, was hit with the fine due to failing to disclose an avoidance scheme to HMRC as legally required.

The scheme paid users the National Minimum Wage, with the remainder of their earnings paid as loans, which were transferred to an offshore trust in Jersey. These loans were not declared as income on the scheme users’ tax returns, meaning they didn’t pay tax on all of their earnings.

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Mary Aiston, HMRC’s Director of Counter-Avoidance, commented, “This £1 million fine should serve as a stark warning to tax avoidance promoters. Those who ignore their legal duty will face serious consequences.

“We actively tackle promoters of tax avoidance schemes and are determined to drive them out of business. We continue to use the full force of the law to challenge tax avoidance scheme promoters.”

HMRC will regularly update the list by publishing the details of other tax avoidance schemes and their promoters. It’s worth noting that if a tax avoidance scheme is not shown in the list, this does not mean that the scheme works or is in any way approved by HMRC.

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