Tax avoidance – Spotlights

01 Sep Tax avoidance – Spotlights

HMRC Spotlights identify specific tax avoidance schemes of which HMRC has become aware and that they consider are not likely to have the legal effect desired by those thinking of using them. According to HMRC, the Spotlights series is designed to be helpful to taxpayers to help them avoid unwittingly entering into arrangements that HMRC are likely to see as tax avoidance.

In the Spotlights series HMRC:

  • Provides some advice on tax planning to be wary of, listing some indicators that HMRC sees as suggesting that a scheme may involve tax avoidance and which it is likely to investigate.
  • Identifies specific schemes which, in HMRC's view, are not likely to deliver the tax savings advertised. Where HMRC sees such schemes being used, subject to the particular facts, they will make a challenge and seek to ensure full payment of the right tax with the right due date.

HMRC has recently added a new Spotlight to its growing list. Spotlight 31 targets those trying to take advantage of the date change for the withdrawal of transitional relief on investment growth. The withdrawal of the relief was announced as part of the Budget measures earlier this year. The transitional relief was intended to work alongside the EBT settlement opportunity, which closed on 31 March 2015.

The government wants to ensure all users of disguised remuneration schemes have the opportunity to settle with HMRC before the transitional relief is withdrawn. An amendment to Finance Bill 2016 has been tabled to extend the date for the withdrawal to 31 March 2017. HMRC is encouraging any taxpayers considering settling their tax affairs relating to this matter to ensure they do so before 31 March 2017.

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