Latest news with #taxavoidance
Sky News
6 days ago
- Business
- Sky News
Tax, interest rates and water
Sky News can exclusively reveal that accountants advising people who entered into a tax avoidance scheme, which was later found to be illegal by HMRC, were being paid a commission. Gareth Barlow speaks to a tax specialist about this. We also hear about new data on water firm pollution incidents, interest rates and streaming giant Netflix's revenue forecast.
Sky News
6 days ago
- Business
- Sky News
Accountants were paid to place clients into loan charge schemes targeted by HMRC
Victims of the loan charge received advice from professional accountants who were being paid to place them into tax avoidance schemes. Sky News has seen evidence of chartered accountants advising their clients to enter loan arrangements, run by companies that were paying them a commission. These schemes were later targeted by HMRC, and workers were hit with giant tax bills, sometimes hundreds of thousands of pounds. In some cases, the tax demands have been crippling. It's a campaign that has driven people to the brink of bankruptcy, devastated families and has been linked to 10 suicides. MPs are now calling for a public investigation into the role of accountants and other professional bodies in the proliferation of these schemes. An independent review of the loan charge is currently under way, but it is limited in its scope. What is the loan charge scandal? It is the latest revelation in a scandal that has caused untold misery for tens of thousands of people, who were enrolled into tax avoidance schemes, often against their knowledge. They included contractors who were urged to avoid setting up limited companies and to instead receive payment through the schemes, which were meant to handle their pay and taxes. 1:42 They worked by paying workers what were technically loans, instead of a salary. This allowed them to circumvent paying income tax. What many assumed were tax deductions on their payslips were, in fact, fees going towards the promoters of the schemes. Tax avoidance is not illegal, but HMRC has successfully challenged tax avoidance schemes in the courts, and workers have subsequently been asked to pay the missing tax. There is no suggestion that these accountants broke the law. Richard's story For Richard Clancey, HMRC's handling of the loan charge feels like "state-sponsored bullying". After being offered a contract role in 2010, Mr Clancey, now a retired computer services professional, contacted a chartered accountant in Kent to help him set up a limited company. The accountant encouraged him to enrol in a payment scheme instead. "He gave us an hour's presentation on the benefits of the scheme and how it worked," Mr Clancey said. "This included how they would handle all administration, pay all tax that was due, was IR35 and tax law compliant, had a lower risk than using a limited company, had been approved by a tax QC and was currently used by several people who were working for HMRC. "The presentation was very elaborate and complicated and I cannot claim that I understood it all, but I wanted to ensure I was legal and compliant, so I trusted the advice of a chartered accountant that use of this scheme was the right thing to do." The accountant told him that he was receiving an introductory fee, but not that he would receive ongoing payment. In 2014, Mr Clancey received an email from his accountant outlining that the previous year he had received £257 in commission. However, he did not receive statements for the previous two years. "Although you were notified of this commission before, we are also required to declare the amount of commission to you according to the guidance of the Institute of Chartered Accountants of England and Wales," the email read. "This commission has not cost you anything," it added. The company's former website page clearly stated that it offered accountants commission, boasting that the rates had been raised. At this point, Mr Clancey was already on the radar of HMRC. In 2012, tax authorities wrote to him to explain that he had been in a tax avoidance scheme that "HMRC believes does not work". He was subsequently asked to pay more than £100,000. "Over the next seven years, I received multiple penalties and threats from HMRC who said I had been a tax avoider who should settle their debts now or face worse consequences later," he said. "There hasn't been a single day when I haven't been consumed by the frustration and anger of my situation and how it arose... Since my involvement with [the scheme] and the subsequent hounding from HMRC and government, a lot of that has changed. This state-sponsored bullying has caused me to suffer some mental health issues. "My personal stress levels were through the roof. I dreaded the next brown envelope coming through the post box with outrageous, unsubstantiated demands. My poor wife would apologise and burst into tears as she brought these to me." HMRC said it takes the wellbeing of all taxpayers seriously. "We are committed to identifying and supporting customers who need extra help with their tax affairs and have made significant improvements to this service over the last few years." Like others in his position, Mr Clancey is frustrated by the blunt approach of the tax authority and the lack of accountability from other parties. "I have been increasingly concerned that my chartered accountant led me into the hands of a scam organisation," he said. "HMRC continues to persecute victims." Government reaction The government has now launched an independent review into the loan charge, and HMRC is pausing its activity until that review is complete - but its focus is on helping people to reach a settlement. The review will not look at the historical role of accountants, promoters and recruitment agencies, even though they propped up the schemes. Politicians and campaigners have called for a broader investigation. Greg Smith, MP and co-chair of the Loan Charge and Taxpayer Fairness APPG, said: "It's clear that many chartered accountants were directly involved in the promotion of loan schemes. "People trusted accountants and had the right to rely on this advice, and yet, instead, are facing life-ruining bills. There needs to be a proper investigation into this as part of an independent inquiry into the loan charge scandal," he said. "Either HMRC warned accountants not to recommend these schemes, in which case the accountants were giving reckless and potentially fraudulent advice; or HMRC didn't tell accountants not to do this, in which case HMRC themselves were seriously at fault. "Either way, it is quite wrong that the current government continues to only pursue those who took and followed professional advice and not those who gave it, whilst profiting from doing so." The experience has damaged Mr Clancey's faith in the sector. "I will never again trust professional financial advice," he said. "If the advice of a chartered accountant can cause this much damage without culpability, then there is something very wrong. It is a failure on the part of the entire tax industry that accredited professionals can, through their advice, destroy the lives of the individuals that they advise." A spokesperson for the Institute of Chartered Accountants in England and Wales, an industry body, said: "We expect chartered accountants to adhere to the highest standards in all of their work, including tax. "Robust rules for members performing tax work are contained in standards which have been developed and strengthened to prevent the involvement of members in aggressive tax avoidance." The organisation strengthened its standards in 2017, after the loan charge legislation was announced, adding that "members must not create, encourage or promote tax planning arrangements or structures that set out to achieve results that are contrary to the clear intention of parliament in enacting relevant legislation and/or are highly artificial or highly contrived and seek to exploit shortcomings within the relevant legislation".
New York Times
14-07-2025
- Business
- New York Times
He Helped Big Companies Dodge Taxes. Now He's Writing the Rules.
In January 2022, the Internal Revenue Service was cracking down on a tax dodge from the agency's 'dirty dozen' list of abusive shelters. To fight back, promoters of the scheme turned to the lobbyist Ken Kies. In a conference call with lawyers and financial advisers, Mr. Kies outlined plans to fight the I.R.S., including by capitalizing on his close relationship with a top agency official, according to a recording of the call obtained by The New York Times. Now Mr. Kies has become the Treasury Department's top tax policy official. The former veteran lobbyist, who has worked for some of America's biggest companies, was confirmed by the Senate last month to serve as Treasury's assistant secretary for tax policy. It is not uncommon in President Trump's Washington for lobbyists or other interested parties to get high-level positions at agencies where they once sought access on behalf of corporate clients. But Mr. Kies is not just any lobbyist. For decades, he has played an instrumental role in enabling some of the most lucrative and most important tax avoidance strategies used by multinational companies and the wealthiest Americans. When the Clinton administration sought to stem the tide of companies shifting trillions of dollars of profits into offshore havens, Mr. Kies led the effort on behalf of a coalition of businesses to kill the regulation. In the George W. Bush administration, Mr. Kies successfully pushed for legislation to make such offshore tax dodges even easier to execute. During the Obama administration, he fended off another attempted crackdown on those strategies. In 2017, as part of a sweeping package of tax cuts signed by Mr. Trump, Mr. Kies lobbied for a new tax break that provides a 20 percent deduction to certain businesses, which overwhelmingly benefits the richest Americans. And most recently, he advised the Trump Organization on a dispute with the I.R.S. Want all of The Times? Subscribe.
The Sun
03-07-2025
- Business
- The Sun
Sheep farmer's ex-wife LOSES battle over £80MILLION ‘gift' he gave her for kids… after she divorced him & kept cash
A SHEEP farmer's ex-wife has lost a five-year legal battle to keep half of a £80million sum he gave her as part of a tax avoidance scheme. Clive Standish, 72, transferred the multi-million pound gift to his former partner Anna in 2017, with the intention of eventually placing the money in an offshore trust for their children. 5 Clive, a former chief financial officer at UBS, made the decision to move the funds over to his Australian wife to exploit her non-dom status and avoid a crippling 40% inheritance-tax rate. The former banker believed he would face a bill of about £32 million if he died with the money in his name. But the pair's 15 year marriage later hit the rocks and divorce proceedings began in 2020 with the assets still in her name. It was initially decided by the High Court in 2023 that Anna, 57, should receive half of the funds in the settlement. But last year, the Court of Appeal ruled that her share should be reduced from half to £25million. The amount was judged to fairly represent her contribution to raising the children and looking after their home. And despite Anna's recent attempts to overturn the decision, the ruling was upheld by the Supreme Court yesterday. Five judges argued that the sum was not a marital asset because it had not been shared by the couple and Mr Standish had intended it for their children. The ruling said: 'Tax planning schemes to save tax, involving transfers of assets from one spouse to another, are commonplace. 'The problem for the wife is that there is nothing to show that, over time, the parties were treating the 2017 assets as shared between them. 'Rather, the transfer was in pursuance of a scheme to negate inheritance tax and it was for the benefit exclusively of the children. 'The parties' intention was that the £80 million should not be retained by the wife.' Fresh twist in Eamonn Holmes & Ruth Langsford's divorce as celeb pair battle over £3.6m home His wife never established two offshore trusts as he had expected, so Clive was judged to be the sole owner of those assets when divorce proceedings began. Lord Faulks, representing Anna, tried to argue that the money had become shared property after the initial transfer, adding that she had contributed by accepting the gift. Mr Standish moved to Australia in 1976 and married Anna in December 2005, before the pair moved to the UK five years later. The couple lived together at Moundsmere Manor, an 18-bedroom mansion near Preston Candover, Hampshire. Clive's laywer, Tim Bishop KC, explained that in June 2004 his client was worth £57.3 million, while Anna had 'no significant pre-marital wealth'. The marital assets at the time of the split amounted to £132million, almost all of which had come from Clive's initial fortune. Mr Bishop added: "The husband made the transfers in March 2017, but the wife failed to transfer the assets into trust by the time the marriage ran into problems in 2019 and then broke down finally in 2020". Delivering the Supreme Court ruling, Lord Burrows and Lord Stephens agreed with the Court of Appeal's verdict. 5 They said: "There was no matrimonialisation of the 2017 assets because the transfer was to save tax and it was for the benefit of the children not the wife. "The 2017 assets were not, therefore, being treated by the husband and wife for any period of time as an asset that was shared between them. "Transfers of capital assets with the intention of saving tax do not, without some further compelling evidence, establish that the parties are treating the capital asset as shared between them. "The 2017 assets comprise the husband's pre-marital assets and earnings that the husband made in the years 2004-2007, to which the wife contributed by being the home-maker and child carer during those years. "In relation to a scheme designed to save tax, under which one spouse transfers an asset to the other spouse, the parties' dealings with the asset do not normally show that the asset is being treated as shared between them. "Rather, the intention is simply to save tax."
Yahoo
23-06-2025
- Business
- Yahoo
17% rise in tax evasion and avoidance among wealthy individuals
The UK's tax authority, HMRC, has observed a significant increase in tax evasion and avoidance by wealthy individuals, with figures rising from £1.9bn ($2.5bn) to £2.1bn over the last year, according to UK accountancy group UHY Hacker Young. UHY Hacker Young has reported a concerning trend of growing tax evasion and avoidance among affluent taxpayers in the UK. The national accountancy group's data indicates that the amount of underpaid tax by this demographic has surged by an average of 17% annually over the past three years. UHY Hacker Young partner Neela Chauhan stated: "These numbers tell you where we can expect HMRC to launch its crackdown - against wealthy people, where unpaid tax is rising and against small businesses where the tax gap has jumped to £28bn from £25.9bn." The UK Chancellor, Rachel Reeves, has allocated 'substantial new resources' to HMRC to intensify tax investigations, Chauhan further noted. According to Chauhan, this is likely to result in "unannounced visits by the taxman and more aggressive mailshots from HMRC to individuals it suspects of underpaying tax." There is a persistent issue of underreporting income and capital gains by wealthy individuals. This ranges from undeclared income from buy-to-let properties to funds concealed in offshore accounts or trusts. With the latter becoming more detectable, there has been a rise in the use of cryptocurrency exchanges and wallets to hide assets from HMRC. Chauhan added: "There are plenty of ways for the wealthy to legally reduce their tax bill. Pensions delivered £29bn in tax benefits in the last year and ISAs £9.4bn, and EIS and VCT schemes are aimed mainly at the wealthy. Sensible tax planning can also reduce IHT bills that would otherwise be fairly damaging to family wealth." HMRC is taking a firm stance against tax evasion by the wealthy. Chauhan warned: "HMRC takes any action by wealthy taxpayers to evade tax very seriously. They could be subject to substantial fines or even face prosecution. HMRC will pursue custodial sentences if the evasion is particularly egregious." "17% rise in tax evasion and avoidance among wealthy individuals" was originally created and published by International Accounting Bulletin, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
