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HRMC sending out letters to tax avoidance schemers

Her Majesty’s Revenue & Customs says it will be sending out letters to anyone who used a tax avoidance scheme this year, whether they are a large company or not.

Whether you’re a massive multi-national corporation, a small business, or a simple contractor or freelancer, if you’ve been using a tax avoidance scheme you’ve got a letter coming to you in the post from the taxman. HMRC says that they’re offering amnesty to any tax avoidance schemers, provided they settle up any outstanding tax owed; the letters are scheduled to be written by 31 January.

The terms of the tax amnesty will see participants given the ability to settle with HMRC without the danger of being prosecuted or brought before a tribunal. However, the taxman said that it will reserve the right to rely on any argument, including any that would end up denying any litigation relief completely.

However, concerns have already been raised about the language HMRC used in the amnesty overview, which says thast it will apply to any who sought to create tax relief in a substantial amount higher than their actual economic costs. This has led to fears that the opportunity to settle any outstanding tax debt could end up having a detrimental effect on any providers that may not have complied with expense tax rules.

Despite these concerns, there are only three tax avoidance schemes so far that have been flagged by the taxman, which include those which attempt to create losses in partnerships, those who look to access the film relief rules, and those that attempt to use Generally Accepting Accounting Practices in order to create losses through written off assets or expenditures.

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