If you’ve used an offshore trust before, you may be considering alternatives after hearing about the most recent raids by HMRC.

Raids on offshore trusts will affect a large number of people, causing growing concern that hits a multitude of people, however, those most concerned by the raid will most definitely be those exposed by it.

To the unaffected, those not exposed, the HMRC raid will look like any other offshore scheme being exposed. With the offenders being taken to court over it, and the contractors paying for the bill in the long run.

Some might point out that HMRC has warned for a long time that they intend to crack down on such schemes, but this does not undermine the fact that legal action can be taken against promoters of such schemes. The result of the failure of this scheme, and its variants, therefore can turn those who are ‘unaffected’ into ‘affected’.

Schemes like these could affect those at the top of it, those advising contractors to take part, promoters showing to it to the world, engagers of it… Raids like these that successfully take down such schemes impact everyone taking part.

In addition, while the incentive for former disguised remuneration scheme users to confess has been extended to March 2017, even recruitment agencies aren’t protected and are looking at such risks with much more disdain.

Unfortunately for scheme users though; HMRC won’t necessarily go directly for the advisers/promoters/engagers of the scheme – those who you could consider responsible because their officials will want the maximum return with the minimum effort. This means they’re likely to pursue the scheme itself in the first instance, before targeting contractors among its other users. Whether that then results in a criminal investigation into the scheme is a separate issue and likely to depend on the findings of the initial HMRC enquiry.

The taxman’s take on taxing is that each taxpayer or company is responsible for their own taxes. When investigating one’s taxes, the taxman will look at an offence on the basis that you are responsible for yourself. As even the unsympathetic will admit, the fallout from using this type of scheme is potentially life-changing for contractors, who in some circumstances will have simply fallen foul of bad advice.

If that’s you, then as a scheme user (whether it was an offshore trust and/or loan arrangement) you may have the right of recourse to the promoter/engager who sold you the scheme in the first place. If you have been involved in a dodgy scheme, you may want to seek advice from a solicitor, or an expert on compliance.

Experts will most likely say if you meet all the below conditions:

  • if a contractor has been advised that such a scheme is compliant, AND
  • the advice is documented; AND
  • it can be demonstrated that the contractor has relied on this advice,

then you may have a case for recourse if you could not have reasonably known that their scheme was potentially unlawful.

If you’re affected by a dodgy scheme like this or have received an APN, it’s crucial that you strongly consider professional, bespoke advice as soon as possible. Do not ignore HMRC, or you’ll find yourself in an even worse position.


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