Three UK advisers arrested in £132m tax-dodging fraud

Added 21st July 2016

Three UK tax advisers have been arrested as part of a HM Revenue & Customs (HMRC) investigation into a suspected £132m ($173m, €157m) fraud involving offshore trusts.

Three UK advisers arrested in £132m tax-dodging fraud

The advisers, who have yet to be named for legal reasons, were arrested on Wednesday following an investigation by the taxman, include a 56-year-old from Greater Manchester, another man aged 67 in Derbyshire and a man aged 59 from Warwickshire.

All three are suspected of involvement in a scheme that used Jersey-based offshore trusts to allow individuals to avoid around £132m in income tax.

In a statement on Thursday, HMRC said the trusts were used by “professional financial advisers” to help clients avoid paying tax.

Paul Maybury, assistant director of HMRC’s fraud investigation service, said the arrests show UK tax office is “determined” to crackdown on tax avoidance and the professionals that facilitate it.

“These arrests show that we are determined to tackle not only those suspected of tax fraud, but also the professionals who we believe abuse their position of trust to help them do it.

"The vast majority of taxpayers pay the tax they owe, but for those who don’t we will not hesitate to use our full range of powers to ensure that nobody is beyond our reach," he said.

New tax evasion law

In April, then UK prime minister David Cameron announced a new law making firms criminally liable for staff who facilitate tax evasion amid mounting controversy following the Panama Papers scandal.

The exposé, which involved the leak of more 11 million documents from Panamanian law firm Mossack Fonseca, detailed the dubious tax arrangements of the rich and powerful around the world, often using offshore shell companies to avoid paying tax in their home countries. 

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Bluring the lines between avoidance and evasion

Perhaps the Assistant Director of HMRC's fraud team should learn the difference between Avoidance and Evasion and not blur the lines. One can look at IRC v Duke of Westminster (1936) to see that the ability to arrange ones affairs in such a manner as attracts the least amount of tax possible is ones right. I believe he is trying to refer to illegal avoidance schemes that result in evasion and not tax avoidance but he should be careful with the legal terms, especially being one of the people appointed to investigate and assist with prosecution.

Posted by: Daniel, 21 Jul 2016

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Monira Matin

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Monira joined International Adviser in March 2016 from Informa Global Markets where she worked as a eurobond reporter for over two years, covering fixed income markets. She has previously held a number of editorial positions covering politics, insurance and technology. Monira has a degree in Journalism and Economics from City University.


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