HMRC’s attitude towards tax planning arrangements is well known by most employers. However, employers may well be less familiar with the “Spotlights” section on HMRC’s website.
Spotlights focuses on tax planning arrangements that HMRC contend do not work. It pays particular attention to planning arrangements that it considers will be widely used and which therefore potentially give rise to a greater loss to the Exchequer.
Spotlights also publishes details of planning arrangements where taxpayers have conceded that the tax they have sought to avoid is due, presumably to discourage others from entering into such arrangements. HMRC may well be prepared to publish details of planning arrangements that are tax effective though to date the Spotlights section does not give any examples.
Spotlights claims that it “has a ‘consumer protection’ role” and that it is there to help taxpayers. It is also HMRC’s vehicle to encourage taxpayers and tax agents to provide them with information about people or companies who may be promoting the type of arrangements that HMRC find unacceptable.
While some tax professionals and taxpayers may view the claim of a consumer protection role with some scepticism, there may be more concern about the encouragement to “inform”.
This “Watchdog meets Crimewatch” approach is an unusual step for HMRC but it obviously feels that this is a useful one to take. However, we are doubtful that it will be as successful as HMRC would like.