HMRC has exposed a complex tax avoidance scheme that moves income offshore, and has warned anyone who has joined the arrangement to get out of it as soon as possible.

The scheme – linked to businessman Darren Patrick-Green – involves contractors joining Singapore-registered Procorre LLP to avoid paying income tax and National Insurance.

How does the tax avoidance scheme work?

The workers and their personal service companies (PSCs) enter into contracts to provide services to their clients as usual.

The PSCs invoice these clients and transfer the money received to Procorre LLP.

Procorre LLP then deducts a fee before returning the rest of the income to the individuals or their PSCs. This money comprises various forms of payments including bank transfers from multiple sources and pre-paid cards.

These payments should be subject to income tax and National Insurance contributions (NICs).

Darren Patrick-Green (also known as Darren Green) is the Ultimate Beneficial Owner (UBO) of Corre Holdings SA (CHSA), a Swiss-based firm which is the majority owner of Procorre LLP.

Also named on the GOV.UK website for being in control of Procorre LLP are Jason Bougourd and Alizeh Nanji.

What should someone do if they’re involved in the scheme?

HMRC said anyone involved in the scheme should contact HMRC as soon as possible and leave the arrangement.

Jonathan Smith, HMRC’s Director of Counter Avoidance, said: “Tax avoidance schemes are cynically marketed as clever ways to pay less tax. The truth is they rarely work in the way the promoters claim and it is the users that can end up with unexpected tax bills.

“We would urge anyone who thinks they have entered these schemes to contact us as soon as possible to get help.”

More detail about this scheme can be found on HMRC’s list of named tax avoidance schemes, promoters, enablers and suppliers on GOV.UK.

Other schemes to watch out for

Two more schemes and one associated individual have also been named on GOV.UK:

  • React Administration Services Limited and Kevin Taylor
  • Abchurch Limited

Plus, HMRC has published the DOTAS Scheme Reference Numbers for two more schemes: Apricot Umbrella Limited and ABC Umbrella Limited.

The dangers of tax avoidance

HMRC is urging taxpayers to be vigilant and to stay away from tax avoidance. The tax authority’s ‘Don’t Get Caught Out’ campaign explains how using tax avoidance schemes can result in unexpected tax bills, interest and penalties.

If anyone has used a tax avoidance scheme promoted by any firm HMRC has named, they can contact them by emailing: CAGetHelpOutOfTaxAvoidance@hmrc.gov.uk

A new criminal offence now applies to promoters of tax avoidance who fail to comply with a stop notice under the Promoters of Tax Avoidance Schemes (POTAS) regime. This legislation also introduced a new power to allow HMRC to act more swiftly to disqualify directors of companies involved in promoting tax avoidance.

Our advice for taxpayers on steering clear of tax avoidance

If a tax ‘scheme’ sounds too good to be true, then it probably is.

So, if you’re presented with anything that involves offshore, alarm bells should ring. The offshore tax arena is a minefield because of the amount of anti-avoidance put in place to stop offshore structuring and offshore schemes.

Before you get involved in any type of arrangement, you should take independent advice from someone not involved in the scheme, so you can get an honest, professional opinion.

Trusted tax advice

For honest, professional tax advice, talk to our team on 07813 434195 or email stephanie.churchill@churchilltaxation.co.uk

Steph Churchill

Stephanie Churchill

Managing director & co-owner of Churchill Taxation