HMRC clocks up another win over NT Advisors

HM Revenue and Customs (HMRC) has secured its eighth tribunal win in a row against tax avoidance schemes run by NT Advisors.

Between them, HMRC’s court successes against NT Advisors have now protected over £750 million in tax, defeating five of the promoter’s schemes. Among them is the Working Wheels scheme, where participants claimed to be second-hand car dealers.

In this latest case, the Upper Tribunal dismissed NT Advisors’ latest appeal that a scheme which used complex financial arrangements involving alleged overseas securities worked. The ruling upholds an earlier First-tier Tribunal judgment in HMRC’s favour.

In total there were 305 users of the scheme and this ruling alone is expected to protect £156 million in tax that would otherwise have been lost. HMRC will now pursue the other users of the scheme to make sure all the taxes that are due are paid.

The Financial Secretary to the Treasury, David Gauke, said:

“While the vast majority of people pay the taxes they owe, this victory shows HMRC’s determination and effectiveness in clamping down on those who seek to avoid their responsibilities.

“Users of NT Advisors schemes, or those considering using their schemes, should know by now that HMRC is very successful at defeating them, and give serious thought to ending their involvement.”

HMRC has a dedicated helpline – 03000 530435 – for those who have engaged in tax avoidance schemes but now want to settle their affairs. Further information can also be found at www.hmrc.gov.uk/avoidance/tempted.htm

HMRC is writing to users of many of NT Advisors’ schemes to make sure they know how successful the department is at beating their schemes in court. In the last two months the department has written to more than 1,000 users, and users of the Bluebox scheme will be contacted shortly.

Notes to Editors 

1. The Upper Tribunal ruling in Andrew Chappell versus The Commissioners for HM Revenue and Customs can be found at http://www.tribunals.gov.uk/financeandtax/Documents/decisions/Chappell-v%20HMRC.pdf
2. This complex scheme devised by NT Advisors used a series of circular and self-cancelling transactions involving alleged overseas securities. These purported to create substantial tax losses where, in reality, no economic loss had been suffered.
3. HMRC will be writing soon to investors in the scheme this decision applies to so they know what action will be taken and what this means for them. HMRC wants to make it easy for those users to settle and will take strong decisive action for those who do not.
4. Details of HMRC’s three most recent tribunal wins over NT Advisors’ schemes:

Bluebox (May 2014) – protected £21 million in tax - https://www.gov.uk/government/news/hmrc-defeats-nt-advisors-again-at-a-tax-tribunal

Working Wheels (February 2014) – protected £290 million https://www.gov.uk/government/news/second-hand-car-dealer-tax-scheme-scrapped

Barnes - Court of Appeal (January 2014) – protected £100 million https://www.gov.uk/government/news/nt-advisors-loses-100m-offshore-tax-avoidance-bid

  5.   HMRC has a number of tools at its disposal to tackle tax avoidance. These include Accelerated Payments powers introduced this month as part of the Finance Act. Under these powers, HMRC is able to seek upfront payments of disputed tax from members of avoidance schemes.

  6.   Follow HMRC Press Office on Twitter @HMRCpressoffice