HMRC has updated its list of named tax avoidance schemes with the addition of two offshore companies registered in Belize.

Minerva Services Ltd and Buckingham Wealth Ltd were promoting and marketing a tax avoidance scheme, known as the Umbrella Remuneration Trust (URT). It used complicated, offshore financial arrangements so income tax and National Insurance contributions weren’t paid correctly. Both companies share the same official business address in Belmopan, the capital of Belize.

The URT received contributions from the scheme users, UK companies and self-employed people who claimed the contribution as a deductible income tax or corporation tax expense. When the money was transferred back to the user, no taxes were paid.

HMRC warns taxpayers to ‘steer clear’ of tax avoidance schemes

Mary Aiston, HMRC’s Director of Counter Avoidance, said: “These cynically marketed tax avoidance schemes don’t work in the way the promoters claim and users can end up with big tax bills.

“We will continue to take strong action against those who promote and market tax avoidance schemes and remain committed to supporting taxpayers to steer clear of or exit tax avoidance.”

HMRC has published a newsletter that was circulated by Minerva Services Ltd and Buckingham Wealth Ltd to their clients. It encouraged URT users to start making replacement contributions to a newly founded scheme called the Nova Trust. The newsletter wrongly claimed changing schemes would end HMRC’s investigations. This isn’t the case, and HMRC is continuing to challenge these arrangements.

As part of its ‘Don’t Get Caught Out’ campaign, HMRC is reminding taxpayers the consequences of using tax avoidance schemes can be severe. You could face extra tax payments, interest, and penalties, as well as damage to your reputation.

Our advice for taxpayers

It’s vital you carry out due diligence on any investment or product that claims to ‘solve’ a tax problem.

Despite HMRC’s best efforts, there are still a lot of advisers out there who sell products that claim to take tax liabilities away. Always remember to tell yourself: ‘If it appears too good to be true – it probably is!’

If you get caught, you may end up paying the tax, interest and high penalties (potentially up to 200% of the tax due if there’s an offshore element).

Trusted tax advice

Our team of UK-based tax specialists are experienced at working with offshore structures, non-domiciled individuals, and non-resident people and companies.

Call us on 07813 434195 or email: stephanie.churchill@churchilltaxation.co.uk

Steph Churchill

Stephanie Churchill

Managing director & co-owner of Churchill Taxation