The warning was made by DSH Chartered Accountants & Business Advisors after HM Revenue & Customs won a major tax avoidance scheme victory that could boost the public purse by £135 million.
The First-Tier Tax Tribunal ruled that a group called Project Blue had used a complex purchase structure to avoid paying Stamp Duty Land Tax (SDLT) on a major property transaction.
The Tribunal found that £50 million SDLT was due. Worryingly for the purchaser in this case, the SDLT bill has been found to be some £12 million greater than would have been the case had the complex purchase structure not been adopted.
As a result of the Court’s decision, a significant number of other commercial and residential property transactions that were structured to avoid SDLT are now also affected, and some £85million in unpaid tax will be pursued by HMRC.
Martin Dane, Head of VAT and Indirect Taxes at DSH, said: “For many years SDLT has been a relatively low key tax, with a number of planning schemes being marketed to businesses and private buyers. It has become increasingly clear that HMRC will challenge what they see as abusive avoidance, both through new legislation and the Courts.
“Following this decision, those who have used planning schemes will need to consider their position and those considering entering into a planning scheme should most definitely seek independent advice.”
DSH Chartered Accountants & Business Advisors has offices in Maidstone, Kent, and Rickmansworth, Hertfordshire. For more information visit www.dsh.co.uk or call 01622 690666.