Tax avoidance schemes

HMRC has powers, introduced in the Finance Act 2022, to name tax avoidance schemes and their promoters. Under this legislation HMRC can name promoters, publish details of the way they promote tax avoidance schemes and name the schemes they promote.

This allows HMRC to warn users and potential users of these schemes at the earliest possible stage of the risks and to help those already involved to leave these avoidance arrangements. The latest list was published on 2 March 2023 and includes details of one further tax avoidance scheme.

Certain schemes make use of complex company structures and directors’ loan accounts to extract profit, providing directors with income where Corporation Tax, Income Tax and National Insurance contributions were not correctly paid. Other schemes make payments to users that are close to National Minimum Wage rates and then another disguised payment, which the promoters claim is non-taxable, and from which Income Tax and National Insurance are not correctly deducted.

HMRC will continue to update this list by publishing the details of other tax avoidance schemes and their promoters. It is important to note that there are other schemes and the fact that a scheme is not included in HMRC’s list does not mean that the scheme works or is in any way approved by HMRC.