Tax avoidance promoters ordered to STOP or face heavy penalties

Two companies have been ordered to stop selling specific avoidance schemes immediately or face an initial penalty of £100,000, HM Revenue and Customs (HMRC) announced today.

HMRC has issued Stop Notices to Peak PAYE Ltd and Saxonside Ltd for promoting disguised remuneration schemes designed to avoid paying National Insurance and Income Tax.

HMRC named the two companies as tax avoidance promoters last year but they have since been issued with Stop Notices requiring them to halt the sale of these schemes. Previously, HMRC could only publish the names of tax avoidance promoters but are now additionally able to publicise the issuing of Stop Notices.

A Stop Notice requires a company to immediately cease promoting an avoidance scheme, notify their clients that a stop notice has been issued and make quarterly compliance declarations to HMRC. Failure to do so can lead to an initial fine of up to £100,000 and unlimited accumulating penalties for other breaches of the Notice of up £5000 per scheme user.

Mary Aiston, HMRC’s Director of Counter Avoidance, said:

“Stop Notices are a powerful way to close down individual schemes and ensure money goes to fund our vital public services. Peak PAYE and Saxonside must stop selling these schemes or face severe penalties.

"Most schemes don’t work and risk taxpayers getting into debt. We've already made great strides in tackling promoters of tax avoidance and we’ll continue to act against those who design and sell schemes.

“Anyone who thinks they may be involved in a tax avoidance scheme, or have been approached by a scheme promoter, should contact us as soon as possible to get help."

The Government launched a consultation on 27 April to introduce a criminal offence for promoters failing to comply with Stop Notices. The consultation seeks responses on the scope of the new criminal offence, its potential impact on taxpayers, and the safeguards and protections in place. The aim is to further strengthen HMRC’s powers to tackle promoters of tax avoidance and drive them out of business. The consultation closes on 22 June 2023.

Suspected breaches of a Stop Notice by a promoter can be reported via https://www.gov.uk/report-tax-fraud

If someone has used a tax avoidance scheme promoted by these companies or any other promoter, HMRC is urging them to make contact by emailing: CAGetHelpOutOfTaxAvoidance@hmrc.gov.uk

HMRC is encouraging taxpayers to be vigilant and to stay out of tax avoidance. As part of its "Don't Get Caught Out" campaign, HMRC is reminding taxpayers that the consequences of using tax avoidance schemes can be severe, including additional taxes, interest, and penalties.

Notes to Editors

1. Further information can be found on HMRC’s list of named tax avoidance schemes, promoters, enablers and suppliers. If a tax avoidance scheme is not shown in the list, this does not mean that the scheme works or is in any way approved by HMRC.
   
2. Further information on Stop Notices can be found on the Promoters of tax avoidance schemes: guidance - GOV.UK (www.gov.uk)
   
3. Information on the proposals for making the failure to comply with a Promoters of Tax Avoidance Schemes (POTAS) Stop Notice a criminal offence can be found here. Tougher consequences for promoters of tax avoidance - GOV.UK (www.gov.uk)
   
4. People can use HMRC’s interactive risk checker to find out if their employment arrangements could involve tax avoidance.
   
5. HMRC’s payslip guidance helps people check their payslips to make sure they are not involved in a tax avoidance scheme, operated by some umbrella companies.
   
6. Follow HMRC’s press office on Twitter @HMRCpressoffice