HMRC has powers introduced in the Finance Act 2022 to name tax avoidance schemes and their promoters. Under this legislation HMRC can name avoidance scheme promoters, publish details of the way they promote tax avoidance schemes and name the schemes they promote.
This allows HMRC to warn users and potential users of these schemes at the earliest possible stage, of the risks associated with use of the scheme, and to help those already involved to leave these avoidance arrangements. The latest list was published on 19 January 2023 and includes details of five further tax avoidance schemes.
Three of the schemes make use of complex company structures and directors’ loan accounts to extract profit, providing directors with income where Corporation Tax, Income Tax and National Insurance contributions were not correctly paid. The other two schemes make one payment to users that is close to National Minimum Wage and then another disguised payment, which the promoters claim is non-taxable and Income Tax and National Insurance are not correctly deducted.
HMRC will continue to regularly update this list by publishing the details of other tax avoidance schemes and their promoters. It is important to note that there are other schemes and the fact that a scheme is not included in HMRC’s list does not mean that the scheme works or is in any way approved by HMRC.