HMRC has published Spotlight 57 highlighting tax avoidance schemes where a business enters into an agreement with a revenue service trust with offshore trustees. Under the agreement, the trust becomes entitled to a percentage of the business’s future revenue, which the business will pay to the revenue service trust. It is then claimed that the business does not have to disclose the transfer of funds in its accounts. As the business no longer holds this revenue, it is not included as part of the business’s taxable profit and so, no tax is paid on it. HMRC’s view is that this and similar arrangements do not work and they will be challenged.
HMRC has published Spotlight 57 highlighting tax avoidance schemes where a business enters into an agreement with a revenue service trust with offshore trustees. Under the agreement, the trust becomes entitled to a percentage of the business’s future revenue, which the business will pay to the revenue service trust. It is then claimed that the business does not have to disclose the transfer of funds in its accounts. As the business no longer holds this revenue, it is not included as part of the business’s taxable profit and so, no tax is paid on it. HMRC’s view is that this and similar arrangements do not work and they will be challenged.
