A tribunal has ruled against another tax avoidance scheme promoted by boutique tax adviser NI Advisors, which involved celebrities, fund managers and other high earners claiming that they were second-hand car dealers in their spare time.
According to HMRC, this firm is a well-known promoter of highly artificial tax avoidance schemes.
NT Advisors sold the ‘Working Wheels’ scheme to 450 fund managers, celebrities and other high earners between 2006 and 2008.
The First Tier Tribunal heard that former Radio One Breakfast show host Chris Moyles, Eoghan Flanagan and Alan Stennett tried to claim that they were in the second-hand car trade. The tribunal found the scheme to be “highly artificial”.
The tribunal said a realistic view of the facts showed that the appellants’ aim was to make it appear, “as though by magic”, that they had incurred vast fees in order to borrow modest amounts of money they did not need in order to invest it in a “trade” they had no desire to pursue.
David Gauke, Exchequer secretary, said: “This case is another example of why taxpayers should not fall for the promises of promoters selling schemes that are all too often too good to be true.
“Not only will the taxpayer waste money on the fees for these failed schemes, they will still have to pay all the tax, interest and penalties that are due.
“This government has provided HMRC with the resources to tackle these avoidance schemes and HMRC will now pursue the other users of the scheme to make sure all the taxes that are due are paid.”
The latest HMRC victory comes after last month an offshore tax avoidance scheme suffered a third court defeat landing underlying investors with a tax bill of £80m after its appeal against two earlier tribunal rulings was rejected by the Court of Appeal.
According to a statement published by HM Revenue & Customs, Matthew Jenner of NT Advisors pitched a complex scheme branded Project Corbiere to wealthy clients, which involved transferring UK government bonds backwards and forwards to the British Virgin Islands.