HMRC arrests five over loan charge fraud

Four men and one woman have been arrested on suspicion of fraud in connection with promoting arrangements designed to avoid paying the loan charge

More than 100 HMRC officers searched business premises in Birmingham and further addresses in Coventry, Worcestershire, Northumberland, Buckinghamshire and Northern Ireland.

Officers seized computers, other digital devices, as well as business and personal records.

All five people arrested will be interviewed under caution by HMRC officers.

A sixth person, a 39-year-old woman from Birmingham, will attend a voluntary interview under caution.

Officers are investigating a number of alleged offences, including conspiracy to cheat the public revenue; conspiracy to evade income tax and national insurance contributions (NICs); fraud by abuse of position and conspiracy to transfer, disguise and/or convert criminal property.

The interventions are the latest in a series where HMRC is investigating fraud offences related to disguised remuneration tax avoidance schemes.

Disguised remuneration schemes are contrived arrangements that pay loans in place of an ordinary remuneration, usually through an offshore trust, with the purpose of avoiding income tax and NICs. The loans are provided on terms that mean they are not repaid in practice, HMRC said.

No further informationis available at this time as investigations are ongoing.

A spokesperson from HMRC’s fraud investigation service said: ‘Those that enable, promote or facilitate tax fraud are firmly in our sights and we currently have more than 200 such suspected enablers under criminal investigation.

‘We are keen to protect the public from those who devise and market fraudulent schemes which at best do not work and at worse mean that people could end up being involved in fraud.

‘People need to think extremely carefully before they enter into any scheme that claims to significantly lower your tax bill. If something looks too good to be true, then it almost certainly is. HMRC’s advice is firmly to steer clear.’

Loan charge rules

In January, the government backed down on the original time frame for loan charge compliance giving taxpayers who signed up to schemes approved by HMRC before 2015 greater leniency and offering five-year time to pay arrangements.

Following the review of disguised remuneration avoidance schemes by Sir Amyas Morse, the government agreed that the loan charge would only apply to outstanding balances of disguised remuneration loans made between 9 December 2010 and 5 April 2019 inclusive.

The final deadline for settling loan charge bills, where a repayment agreement has not been negotiated, is 30 September 2020.

By Sara White

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