Two companies face £100k fine over tax avoidance schemes

Two companies have been ordered to stop selling specific tax avoidance schemes immediately or else face an initial penalty of £100,000, HMRC has warned.

The authority said it has issued Stop Notices to Peak PAYE Ltd and Saxonside Ltd for promoting disguised remuneration schemes designed to avoid paying National Insurance and Income Tax.

The two companies were named by HMRC as tax avoidance promoters last year but they have since been issued with Stop Notices requiring them to halt the sale of these schemes. 

Previously, HMRC could only publish the names of tax avoidance promoters but are now additionally able to publicise the issuing of Stop Notices.

A Stop Notice requires a company to immediately cease promoting an avoidance scheme, notify their clients that a stop notice has been issued and make quarterly compliance declarations to HMRC. 

The failure to do so can lead to an initial fine of up to £100,000 and unlimited accumulating penalties for other breaches of the Notice of up to £5,000 per scheme user.

Mary Aiston, HMRC’s director of Counter Avoidance, said: “Stop Notices are a powerful way to close down individual schemes and ensure money goes to fund our vital public services. Peak PAYE and Saxonside must stop selling these schemes or face severe penalties.

“Most schemes don’t work and risk taxpayers getting into debt. We’ve already made great strides in tackling promoters of tax avoidance and we’ll continue to act against those who design and sell schemes. Anyone who thinks they may be involved in a tax avoidance scheme, or have been approached by a scheme promoter, should contact us as soon as possible to get help.”

The government launched a consultation on 27 April to introduce a criminal offence for promoters failing to comply with Stop Notices. The consultation seeks responses on the scope of the new criminal offence, its potential impact on taxpayers, and the safeguards and protections in place. The consultation closes on 22 June 2023.