Businesses tempted to sign up to complex schemes to reduce their tax bills could find themselves substantially out of pocket unless they take independent advice, says DSH Chartered Accountants & Business Advisors.
The warning follows an announcement from HM Revenue & Customs (HMRC) that it will be cracking down hard on organisations that promote tax avoidance schemes and companies that take advantage of them.
HMRC has also published a list of 10 things businesses thinking of signing up to such schemes should think about before doing so. These include the likelihood of high fees being charged by a scheme’s promoter; little comeback if things go wrong; hefty legal fees if HMRC challenges the scheme in the courts; possible criminal conviction; tax penalties and surcharges; and the likelihood of HMRC taking a close interest in all your future financial affairs as a result of marking you out as a high risk taxpayer.
“The Government has made it very clear that it is going to continue to clamp down on people who try to pay less tax than is their due,” said Steve Carpenter, Director of Taxation at DSH’s Maidstone office.
“While there are perfectly legitimate ways of reducing your tax bills by making best use of all allowances, there are others which can fly close to the wind. On the surface some schemes may look a clever answer to cutting tax liabilities but they are often too good to be true.
“It may seem a little harsh that HMRC will punish people for taking advantage of what they thought to be legitimate – albeit borderline – tax avoidance measures, but unless they take independent, impartial advice beforehand they are putting themselves at risk of being penalised.”
To find out how DSH Chartered Accountants and Business Advisors could help your company, visit www.dsh.co.uk or call 01622 690666.