Tax & Accounting News

Avoidance schemes under scrutiny

19/04/2010

HM Revenue and Customs (HMRC) has issued another warning to high earners who may be attempting to dodge the new 50% tax rate

Dave Hartnett, permanent secretary of tax at HMRC, has warned that there will be ‘very close scrutiny’ of schemes which seek to convert income to capital gains, reported the Financial Times.

“Where such schemes work technically, we will not hesitate to go to our ministers to ask for a change in legislation,” he said.

Other possible strategies include leaving money in the company to draw out later if tax rates fall, or issuing share options that pay out income over a longer period.

Meanwhile, Treasury minister Lord Myners has revealed the government is expecting to make much less from the new tax rate than first estimated.

He said the government had adjusted its figures to take into account a higher degree of avoidance than had at first been expected.