HMRC Defeats Film Partnership Schemes

HMRC has announced new plans to clampdown on the promoters of tax avoidance schemes by widening the scope of DOTAS (disclosure of tax avoidance schemes) to all indirect taxes and VAT.

The plans were confirmed in the Finance Bill 2017 and will take effect from 1st September 2017.

Under The Indirect Taxes Regulations 2017 HMRC will be able to apply to the Tax Tribunal for an order against the promoters of such tax avoidance schemes relating to the reduction of indirect taxes and VAT.

Once HMRC has been granted with an order it will determine what information should be passed over for investigation. The information relating to the tax scheme must be provided within 31 days.

If those involved in the tax avoidance scheme fail to provide the information within 31 days they could face a daily penalty of £600, rising to £5,000.

HMRC has recently won a £26m tax avoidance case against a film partnership scheme in the Court of Appeal.

The schemes defeated by HMRC were the Proteus Film Partnership and the Samarkand Film Partnership which were linked to movies such as The Queen, starring Helen Mirren, and the remake of Oliver Twist.

The ruling upheld previous judgment that the schemes were not trading and therefore no tax relief was due as no losses were incurred by the investors. HMRC believe that the judgement could have an impact on cases worth up to £286 million.

Forths tax investigations and voluntary disclosures team assist individuals in bringing their tax affairs up to date with HMRC. We would always advise you contact us directly to discuss your circumstances in complete confidence rather than approaching HMRC directly.

If you have utilised a tax avoidance scheme, or believe you have unpaid tax liabilities, you can call us on 0113 387 5670 to discuss your circumstances in confidence. Alternatively, email us at enquiries@forthsonline.co.uk or fill out an Enquiry Form and we will contact you directly.