HMRC has created new teams to make compliance checks into SME direct tax avoidance schemes.

Following recommendations by Government HMRC has created four specialist teams to handle compliance checks into direct tax avoidance schemes used by small and medium enterprises (SMEs).

The teams are located in:
Central - Stoke
East - various locations
South East - Bournemouth
London and Anglia - Luton

HMRC is currently transferring approximately 1,850 ongoing SME compliance checks to these four teams and aims to complete this by the end of January 2012. HMRC customers and their authorised tax agents and advisers (if appropriate) will be advised (in writing) of a change to both case officer and office dealing with the check.

From 1 December 2011, the teams will deal with all SME compliance checks which involve direct tax avoidance risks.

Cases within the current HMRC Employee Benefit Trust (EBT) Settlement Strategy are excluded from these arrangements.

Editorial comment

The tax avoidance industry appears to have passed its peek in for the SME sector and the recent introduction of legislation designed to tackle disguised remuneration has reduced the use of third party trusts.

HMRC can sometimes have an uphill battle tackling tax schemes often because the anti-avoidance legislation available to it is so complex. The first step is often considering the DOTAS rules to whether a scheme has been implemented as previously disclosed. There is also the possibility that many schemes do not do what they say on the wrapper, or they have just failed to be implemented correctly and so fail on that basis.