HMRC wins latest battle against adviser's £916m tax-dodging scams

Added 26th September 2016

The UK tax office has won its tenth legal case against a serial tax avoidance promoter, NT Advisors, after it was found guilty of circulating payments for no other reason other than to generate tax deductions.

HMRC wins latest battle against adviser's £916m tax-dodging scams

Previous victories included closing down the 'Working Wheels' scheme in February 2014, used by British celebrities and fund managers such as Radio 1 DJ Chris Moyles and former Liontrust fund manager Eoghan Flanagan, who claimed to be second-hand car dealers in their spare time.

Meanwhile, another scheme, which operated in 2005 and was known as Project Corbiere, involved transferring millions of pounds of UK government bonds, known as gilts, backwards and forwards to the British Virgin Islands to create an unwarranted tax deduction of £1.2m ($1.5m, €1.38m).

'Chappell' scam

The Court of Appeal has ruled that NT Advisors’ latest scheme, known as the ‘Chappell’, consists of a series of circular and self-cancelling transactions involving alleged overseas securities designed to create tax deductions which in reality did not exist.

The latest ruling covers 304 users who attempted to avoid £143m in UK tax, said the HM Revenue and Customs (HMRC) in statement on Monday.

The UK tax authority added that overall, by shutting down NT Advisors various scams, it has saved Treasury coffers over £916m in tax that would have otherwise been avoided.

Jennie Granger, HMRC’s director general of enforcement and compliance, said: “HMRC has a 100% success record against NT Advisors in the courts. If you are currently using one of their schemes, or any other avoidance scheme, we will help you get out if you get in touch with us.” 

‘Bluebox’ scheme

In May 2014, the HMRC's first-tier tribunal rejected a claim for £200,000 of tax relief from the company for its “Bluebox” scheme, which involved participants making a £500,000 gift to charity which was then used to channel money tax free to a Jersey trust. 

At the time, HMRC said the scheme was of “virtually no benefit” to charity and 60 participants are now expected to pay the taxes due.

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