HMRC sending out warning letters to participants in an avoidance scheme

3rd December 2012

HM Revenue & Customs is sending letters directly to 1,500 people who it believes have signed up to one particular avoidance scheme.

The correspondence is believed to be the first of its kind and appears to be a pre-emptive strike strategy before the scheme’s legality is challenged, according to the report on BBC’s website.

The National Audit Office said in a report issued last week that HMRC was dealing with a backlog of 41,000 cases of aggressive tax avoidance involving individuals and small companies.

HMRC is sending out four versions of the same letter in a pilot scheme, one of which states: “You are in the small minority of people who have made the deliberate choice to avoid tax. We focus our resources on this small minority. The choice that you have made changes the way we view your tax affairs.

“Our specialist investigations unit will be carrying out a full investigation into this scheme and they will open an enquiry into your tax affairs.”

Another extract from the letters stated: “We are committed to challenging aggressive tax avoidance, and we will do so through the courts where appropriate. If we do this then it will lead to years of uncertainty about your tax affairs, and mean considerable additional cost to you. We are already challenging similar schemes and we have a very successful track record in the courts with schemes of this type.

Your decision to use a scheme such as this means that we will treat you as a higher risk customer. Therefore we will monitor more closely your tax affairs.”