Down 42 oer cent in a year
Just 330 businesses informed HMRC they were using corporation tax planning schemes last year, down 42 per cent in a year and 88 per cent from a peak of 2,860 just four years ago, shows new research from UHY Hacker Young, the national accountancy group.
UHY Hacker Young says that the statistics show that a series of Government crackdowns over recent years have virtually eradicated aggressive corporation tax planning.
The powers HMRC has gained in recent times to tackle tax avoidance include:
· controversial Accelerated Payment Notices (APNs), which allow HMRC to demand payment of tax within 30 days, with no right of appeal, if a business has used a tax planning scheme that falls under its Disclosure of Tax Avoidance Schemes (DOTAS) regulations
· new criminal penalties for ‘Enablers of Tax Avoidance’, targeting tax advisers and accountants whose clients use tax schemes
· the General Anti-Abuse Rule (GAAR), which is often used to ‘sweep up’ tax planning which is not subject to a specific regulation
UHY Hacker Young says that the fall in use of corporation tax planning schemes calls into question the need for HMRC to continue to expand its powers, when so little aggressive tax planning is now taking place.
Clive Gawthorpe, Partner at UHY Hacker Young, comments: “The corporation tax planning scheme is now virtually dead – HMRC can legitimately claim to have won the war on aggressive tax planning by businesses.”
“Once-commonplace schemes like Employee Benefit Trusts have now almost completely died out, with only a very small number remaining. Many of those businesses are likely to be in the process of settling or litigating with HMRC over them.”
“Even though the war is won, HMRC continues to add to its weaponry. These figures really raise the question of why that is necessary.”