HMRC Wins £88 Million in Avoidance Case
A recent tax tribunal case has awarded the HMRC after a scheme that aimed to avoid tax on loan note profits was brought down. A judgement claimed that the Treasury could near nearly £88 million.
The scheme in question involved a company known as Vocalspruce, which was promoted by PricewaterhouseCoopers, and involved the using of loan notes by Vocalspruce, which was then owned by Brixton plc.
The profits on these loan notes are eligible for tax, however, this schemed was designed to make them non-taxable through exploiting a loophole. The HMRC claim that they were attempting to use an alleged loophole in the Finance Act of 1996.
The positive result for HMRC could see another 43 similar cases being ruled in HMRC’s favour, which could potentially protect a further £87 million which is rightfully owed in tax.
David Gauke, the Exchequer Secretary to the Treasury said that ‘These are complex, intricate schemes and without the technical skills, resources and sheer commitment of HMRC’s specialists they would go unchallenged, costing the country billions of pounds every year’.