HMRC wins in court have protected over 拢1 billion
The total amount of tax protected by tackling corporate tax avoidance schemes has passed 拢1 billion in the first six months of 2013.
Announcing the figure at the first annual HM Revenue and Customs (HMRC) Stakeholder Conference, David Gauke, Exchequer Secretary to the Treasury, said:
Today I can announce that HMRC has topped 拢1 billion this year in court wins against corporate tax avoidance, following a judgment worth almost 拢88 million, involving a company called Vocalspruce and a scheme promoted by Price Waterhouse Coopers.
Vocalspruce, at the time part of a FTSE-listed group, lost its bid to convince a tax tribunal that the avoidance scheme worked as intended.
This case has delivered over 拢62 million to the UK鈥檚 coffers, as other users of the failed scheme settled up. It also has major implications for 43 similar cases, protecting over 拢87 million.
Welcoming the Tribunal decision, Mr Gauke said:
These are complex, intricate schemes and without the technical skills, resources and sheer commitment of HMRC鈥檚 specialists they would go unchallenged, costing the country billions of pounds every year.
The message coming out of these cases is clear 鈥� entering into a tax avoidance scheme can be complex, expensive and self defeating, and the taxpayer can even end up paying more than the original bill.
The Government has invested nearly 拢1 billion in HMRC to come down hard on avoidance, evasion and fraud and they will continue to challenge abuses like this wherever they find them.
Details of the large corporate avoidance tackled through the courts in 2013, and the tax protected, are as follows:
| Item | Tax protected |
|---|---|
| Land Securities | 拢60 million |
| Bristol and West | 拢30 million |
| WHA | 拢600 million |
| P&O | 拢154 million |
| AbbeyLand | 拢50 million |
| Vocalspruce | 拢88 million |
| Tax settled in advance of Vocalspruce judgment | 拢63 million |
| Project Blue Ltd | 拢135 million |
| TOTAL | 拢1,180 million |
Notes: The Vocalspruce case revolved around the use of loan notes by Vocalspruce鈥檚 then parent, Brixton plc. Profits on loan notes are taxable, but this scheme aimed to make them non-taxable by exploiting what it claimed was a loophole in Finance Act 1996. Both the Lower and Upper Tribunal ruled against this interpretation. The Upper Tribunal appeal was conducted under Rule 18, which is used when there are other cases with common or related issues of fact or law at stake. Vocalspruce was the lead case, having 43 followers, with 拢87.7 million of tax at stake. See the .