{"id":9874,"date":"2023-07-03T11:46:33","date_gmt":"2023-07-03T10:46:33","guid":{"rendered":"https:\/\/www.taxpolicy.org.uk\/?p=9874"},"modified":"2023-08-17T21:53:48","modified_gmt":"2023-08-17T20:53:48","slug":"scheme","status":"publish","type":"post","link":"https:\/\/heacham.neidles.com\/2023\/07\/03\/scheme\/","title":{"rendered":"The outrageous \u00a350m tax scheme that was KC-approved. Part 1: The Scheme."},"content":{"rendered":"\n

Many “tax avoidance schemes” are in fact just tax fraud. We have been investigating one in detail, involving a company splitting its business between 10,000 companies, and using social media to hire 10,000 Filipino individuals who it can pretend are the shareholders\/directors. <\/em><\/strong><\/p>\n\n\n\n

The scheme was facilitated by an opinion from a well-known tax KC. He was surely not aware the scheme would end up being a fraud, but his opinion was in our view one that no reasonable tax lawyer should have given.<\/em><\/strong> We will be naming the KC, and publishing his opinion and our analysis, in Part 2 of this report. Part 1 introduces the scheme, how it worked, why it cost the UK at least \u00a350m, and why we believe it should be described as fraud and not tax avoidance.<\/em><\/strong><\/p>\n\n\n

The background<\/h2>\n\n\n

Elements of the scheme have been reported before, but we believe this is the first time the full picture has been put together.<\/p>\n\n\n\n

Back in 2016 and 2017, Simon Goodley<\/a> at the Guardian reported on a tax avoidance scheme involving the Anderson Group.1<\/a><\/sup>Not to be confused with the Anderson Group<\/a> that’s active in construction, or Andersen LLP\/Andersen Tax<\/a> – a well-respected accounting and tax firm<\/span> Simon’s articles are here<\/a>, here<\/a> and here<\/a>, and File on Four later ran a programme<\/a> on the schemes, summarised here<\/a>. The scheme companies later went bust<\/a>, leaving HMRC out of pocket. Our founder, Dan Neidle, said at the time <\/a>that this looked more like criminal tax evasion than tax avoidance, and that is also HMRC’s view of these structures<\/a>.<\/p>\n\n\n\n

Seven years on, we now have much more information on the scheme and the people running it. We know that a director of a company involved faced serious legal consequences<\/a>, and admits the scheme was a fraud. We also have a copy of the scheme opinion from a senior tax barrister\/King’s Counsel (KC) – it’s been described by other KCs as “shocking”, “appalling”, “mind-blowing” and “deeply irresponsible”. But before we go through the KC opinion, we will set out the detail of the scheme:<\/p>\n\n\n

The players<\/h2>\n\n\n

The usual kind of contracting arrangement looked like this:<\/p>\n\n\n\n