The issue

HMRC view tax planning schemes as contributing to the “tax gap” every bit as much as evasion. It is therefore increasingly important to monitor properly the risks surrounding the tax function, and any planning schemes which may have been implemented within the company, to ensure that they may not be deemed “abusive”.

Action required

Our team can identify a documentary trail, interpreting significant documents and other evidence, and analyse communications created internally by the client in respect of planning arrangements in the light of current interpretation by the courts. This process:

• Provides a Bible of documents which accurately reflects and analyses the process delivering the tax benefits not just at the planning stage, but through implementation and outcomes.
• Minimizes the inherent risks of challenge by HMRC, by ensuring that all documentation which relates to the planning scheme is available in a suitable form in the event of a challenge based on the economic reality of the scheme.

Example

A client had been advised by a leading firm of accountants to implement an offshore VAT planning scheme in respect of supplies to a financial services company. Guidance and follow-up review of the proper operation of the scheme had not been given by the original advisers. We were able to identify contentious area and advise on corrective action, thus minimising potential under-declarations of VAT in the region of £75,000.