HMRC settlement opportunity for Eclipse Film Partnership members
The Eclipse Film Partners (numbers 1 to 40) Limited Liability Partnerships (Eclipse LLPs) were complex financial arrangements and a form of tax avoidance. Through their “investment”, taxpayers aimed to generate large interest payments on bank borrowings, presented as contributions to the capital of the Eclipse Film Partnership, so they could buy film rights. HMRC did not accept the borrowings for the “investment” were real.
Offshore does not mean off HMRC’s radar
The fact a taxpayer has an offshore bank account or an offshore trust or offshore anything can raise or add to the concerns of HMRC. Not so much as “what is there to hide” but more the fact that its not so transparent compared to being on the mainland UK.
Is HMRC challenging you?
HMRC holds a wealth of information on all taxpayers. Not surprisingly though, from time to time HMRC can come across information on a taxpayer that they did not expect. You may think that you have disclosed everything but now HMRC is challenging you and want to investigate your tax affairs.
By failing to prepare, you are preparing to fail
Some of you may recognise this as a quote from Benjamin Franklin. In my world it is a very true statement and I take time to explain its importance to others particularly in relation to failing to prepare for meetings with HMRC.
Who is in charge of your tax investigation or is it meandering out of control?
So many times I hear the answer back “HMRC is in charge of course!” Perhaps the question is more “Who should be in charge of your tax investigation”. Either way, the answer should be firstly the adviser is in charge and secondly the taxpayer. Otherwise your tax investigation can meander out of control.
GSOPs and CFDs – HMRC offer an opportunity to reach a Settlement
GSOPs and CFDs were mechanisms designed to reward Directors and key employees in return for achieving specific targets. The promoters argue that any payments out to an individual under a GSOP or CDF were subject to Capital Gains Tax (CGT).
Is confusion and misunderstanding the same as tax fraud?
Running a business is not always easy no matter how many staff you employ or what procedures you have in place. When there is too much to be done in the time and within the resources available, confusion and misunderstandings can easily occur. The result is inevitably mistakes. Or was it deliberate? Is it tax fraud?
The legacies of tax avoidance schemes
As the passage of time has shown, participating in tax avoidance schemes is not for the faint hearted. “I wish I had never done that” I hear regularly. Some taxpayers may only participated perhaps once or twice in whatever scheme it is but they have been in a nightmare ever since. And that goes for the advisers too!
Having invested in the company, you then discover tax fraud
Unfortunately, this nightmare scenario is not uncommon. No matter how much due diligence is undertaken, a fraud can be very sophisticated and may only surface after certain people have left. Often the fraud includes the Managing Director and other key employees, all of whom have now left.
Is HMRC stopping you from passing on your business?
The family has worked hard all their lives to create the family business it is today. Retirement may beckon in sunnier climes but all that is being prevented by HMRC. Why – because some years ago the company chose to reward its key employees by participating in a tax avoidance scheme.