Tax

Tax avoidance schemes rise by over a third

The number of people using tax avoidance schemes in the UK has risen by 36% in the last five years, from 22,000 to 30,000, according to new research by the HMRC

The rise is reportedly due to promoters increasingly targeting middle income earners, instead of selling to those with high-net-worths.

HMRC estimates that around £600m in tax was lost through individuals using tax avoidance schemes in the last year alone.

In addition, it found that the use of tax avoidance schemes was most prevalent in the 41 to 60 age group, while London “dominated” the usage of such schemes.

Steven Porter, partner at international law firm Pinsent Masons, said: “What is worrying is a seemingly growing trend for tax avoidance schemes to now be targeted at middle income earners. 

“Some middle earners seemingly get trapped in avoidance schemes as they aren’t able to pay back the tax they avoided and come clean with HMRC.”

He added: “If they do get caught, the strain of trying to find that unpaid tax, interest payments and penalties can be ruinous. Those using avoidance schemes would always be best advised to seek professional assistance and consider coming forward to HMRC. 

“A sign that it is everyday people that are now in the sights of the tax avoidance scheme salesmen is that they have been targeting NHS workers returning to the workforce to help fight the Covid-19 pandemic. HMRC is trying to tackle that issue by getting in touch with people they suspect have been sold a tax avoidance schemes as early as possible – before they get in too deep.”

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