excellent

sbnca

Comedian Jimmy Carr has woken up this morning to discover details of his tax affairs splashed across the front pages of the national press. He is a leading player among the users of a tax avoidance scheme (“K2”) marketed by Peak Performance Accountants (“PPA”). This is a scheme designed on a fairly well-known basis, marketed by other tax boutiques as well as PPA, whereby income is routed into a trust (in the case of K2 based in Jersey), which lends the money back to the taxpayer. Because this loan is technically repayable, it is not taxed as income in the hands of the taxpayer.

The quotes from Roy Lyness of PPA are particularly instructive, and illustrate both the difficulty that HMRC has in keeping up with abusive tax avoidance and the reason why we urgently need the General Anti-Abuse Rule (“GAAR”) on which HMRC is currently consulting.

HMRC has previously pinned its anti-tax avoidance strategy on the…

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