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HMRC sends major tax avoidance scheme packing

In a bit of news that may actually end up being refreshing proof that the taxman is actually on our side, HMRC just shut down a major tax avoidance scheme.

HM Revenue & Customs has shuttered the doors on a tax avoidance scheme cooked up between Land Securities and Morgan Stanley. The investment bank was caught buying shares of the FTSE 100 business through a subsidiary in the Cayman Islands, only to inflate the share value of Land Securities by pouring cash into the Morgan Stanley subsidiary – resulting in a massive £60 million in revenue that oh-so-conveniently escaped taxation.

The best part about the whole tax avoidance scheme – or the worst, if you’re any executive of either Land Securities or Morgan Stanley – is that Land Securities then purchased back the shares at the inflated price in order to claim that the “£200 million loss” as a tax deduction under an anti-avoidance rule currently in existence. Of course, when the case was examined at tribunal, the scheme was laid bare in that both firms involved in the dirty business were more or less completely full of it, and were just trying to pull the wool over the eyes of the UK taxpayer to the tune of £60 million.

You know it’s bad enough when multinationals pull this kind of behaviour, especially when they move in to the UK but then send their profits elsewhere in order to avoid paying their fair share, but it’s absolutely even more insulting when an FTSE 100 firm sends its profits overseas and then funnels them back home. If you ask me it’s effectively money laundering, and it makes me incredibly mad that these greedy bastards thought they were going to get away with the whole business.

I’m absolutely thrilled that HMRC caught both Land Securities and Morgan Stanley in the act, and has completely dismantled the tax avoidance scheme to prevent them (or anyone else) from benefiting from it in the future. Let this be a lesson to large firms either based in the UK or operating within its borders: you can only hide your ill-gotten gains for so long before the taxman finds your little bolt-hole and drags you out by your hair, screaming, into the light of day – and when they do I’ll be there pointing and laughing.

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