{"id":7426,"date":"2023-07-04T10:58:28","date_gmt":"2023-07-04T09:58:28","guid":{"rendered":"https:\/\/www.taxpolicy.org.uk\/?p=7426"},"modified":"2023-08-15T22:28:29","modified_gmt":"2023-08-15T21:28:29","slug":"kc","status":"publish","type":"post","link":"https:\/\/heacham.neidles.com\/2023\/07\/04\/kc\/","title":{"rendered":"The outrageous \u00a350m tax scheme that was KC-approved. Part 2: The Opinion."},"content":{"rendered":"\n

Our report yesterday revealed the scheme<\/a>: it used 10,000 UK companies, supposedly owned by 10,000 Philippine individuals, to claim at least \u00a350m in tax incentives. A central player admits the scheme was fraudulent<\/a>. Today we identify the KC who gave the scheme the green light, publish his opinion, and explain why we regard it as improper. <\/em><\/strong><\/p>\n\n\n\n

The KCs issuing these opinions do so knowing they face no downside, and no accountability – that has to change.<\/em><\/strong> <\/p>\n\n\n

The opinion<\/h2>\n\n\n

The scheme was enabled and facilitated by an opinion from Giles Goodfellow KC<\/a>, a well-known tax KC. We are publishing the opinion in full, with our commentary, here.<\/a><\/p>\n\n\n\n

Our view is that the opinion was clearly wrong as a technical matter – no court would realistically have thought it succeeded in claiming the intended tax benefits. More seriously, the opinion ignored “red flags” that suggested those involved were not merely engaged in tax avoidance, but that criminal tax evasion\/fraud was a likely outcome.<\/p>\n\n\n\n

If you haven’t read Part 1 of our report, please do <\/a>– but to recap: one business was split into 10,000 “mini umbrella companies” (MUCs), with 10,000 Filipino individuals recruited using social media to act as “directors” and “shareholders”. Those behind the scheme then claimed the 10,000 companies were independent, and each one claimed small business incentives – amounting to at least \u00a350m in total. But, behind the scenes, the Filipino individuals were just clicking buttons on a web portal – they weren’t independent at all. The whole thing was a fraud.<\/p>\n\n\n\n

We have no reason to believe Mr Goodfellow knew the implementation of the transaction would be fraudulent (and possibly was already fraudulent at the time of the implementation). But why didn’t he spot the obvious red flags? Why did his analysis fail to take into account any relevant caselaw? How did he conclude that the scheme worked, when almost every tax avoidance scheme the courts saw in the last twenty years had failed? And when this was perhaps more egregious than any scheme that had come before a court?<\/p>\n\n\n\n

We are calling for the Bar Standards Board to investigate.<\/p>\n\n\n

Why we believe the opinion was improper<\/h2>\n\n\n

We provide a detailed analysis in our commentary to the opinion<\/a>. But, in short, our view is that:<\/p>\n\n\n\n