HMRC Spotlights identify specific tax avoidance schemes of which HMRC has become aware and that they consider are not likely to have the legal effect desired by those thinking of using them. According to HMRC, the Spotlights series is designed to help taxpayers avoid unwittingly entering into arrangements that HMRC are likely to treat as tax avoidance.
In the Spotlights series HMRC:
- Provides some advice on tax planning to be wary of, listing some indicators that HMRC sees as suggesting that a scheme may involve tax avoidance and which it is likely to investigate.
- Identifies specific schemes which, in HMRC’s view, are not likely to deliver the tax savings advertised. Where HMRC sees such schemes being used, subject to the particular facts, they will make a challenge and seek to ensure full payment of the correct tax payable on the due date.
HMRC has recently added a new Spotlight to its growing list. Spotlight 31 concerns the government’s plan to change the date for the withdrawal of transitional relief on investment growth. The withdrawal of this relief is part of the government’s plans to tackle the use of disguised remuneration avoidance schemes such as Employee Benefit Trusts (EBTs) and contractor loans.
The withdrawal of the relief is to be delayed to give taxpayers more time to reach a settlement with HMRC. In order to give this extension the proper legal footing, an amendment to Finance Bill 2016 will extend the date for the withdrawal of transitional relief from 30 November 2016 to 31 March 2017.