In a bid to support the government's plan to close the tax gap, HMRC have issued their first Stop Notice to an individual. Paul Baxendale-Walker, a struck-off solicitor best known for his involvement in the Rangers Football Club tax avoidance case, is the first individual to be issued with a Stop Notice.
HMRC's Stop Notices are generally issued to companies that HMRC suspect of promoting tax avoidance schemes. Paul Baxendale-Walker (PBW) is the first individual to be ordered by HMRC to cease promotion of two tax avoidance schemes.
A Stop Notice, once issued, requires the person or company to whom it was issued to stop promoting tax avoidance with immediate effect. Other persons associated with the recipient of the notice may also be subject to the notice.
Failure to comply with the notice can have serious consequences.
- Continuing to promote tax avoidance after being issued with a notice may be a criminal offence.
- Failing to provide a copy to any associated person subject to the notice may also be a criminal offence.
HMRC define promotion as:
- Being responsible for the design of the tax avoidance arrangement.
- Approaching persons with a view to making the tax avoidance arrangement available to that person.
- Are involved to any extent with the design, organisation or management of the tax avoidance arrangements.
- Make the tax avoidance arrangements available for other persons to implement.
PBW is well known in the industry for his promotion of tax avoidance schemes, particularly those involving Employee Benefit Trusts.
Jonathan Smith, Director of HMRC's Counter Avoidance department, said, "The courts have already concluded that Mr Baxendale-Walker designed and sold multiple tax avoidance schemes that don't work as claimed and now these Stop Notices send a clear message that we'll use every tool at our disposal to protect public finances from tax avoidance."
PBW, also known as Paul Chaplin, has responded to the Stop Notices in a piece entitled 'First they burn the books, then they burn the people'.
Useful guides on this topic
Promoters of Tax Avoidance Schemes (POTAS)
Who is a Promoter? What are the Promoters of Tax Avoidance Scheme rules? What does this mean for promoters, intermediaries and clients?
DOTAS: Disclosure of Tax Avoidance Schemes
What are the Disclosure of Tax Avoidance Schemes (DOTAS) rules? When should you disclose your use of a tax avoidance scheme? What are the consequences of non-disclosure? How are penalties calculated?
Tax avoidance schemes
How do you spot tax avoidance schemes? What are the types of schemes available that should be avoided? What disclosure requirements are there? When are tax clearances needed?
Penalties: Serial tax avoidance
The Serial Tax Avoidance (STA) legislation was introduced by Finance Act 2016.
General Anti-Abuse Rule (GAAR) (Subscriber Version)
What is the General Anti-Abuse Rule (GAAR)? When does it apply?
Supreme Court dismisses Rangers EBT appeal
The Supreme Court has issued its judgement in RFC 2012 Plc (in liquidation) (formerly The Rangers Football Club Plc) v Advocate General for Scotland [2017] UKSC 45 and has agreed with HMRC that loans made to employees under the club's EBT loan scheme were in fact remuneration and so subject to tax and NIC.
External
HMRC Announcement: Tax avoidance promoter ordered to stop schemes