Press release: Getting to the root of tax avoidance

The victory over scheme promoter, Root2, came after they failed to report a mass-marketed tax avoidance scheme, known as Alchemy, to the tax authority.

The scheme aimed to extract profits from owner-managed companies in the form of winnings from betting on the stock market, which the scheme aimed to ensure would be tax free, rather than in the form of taxable employment income.

HMRC brought the case against Root2 under the Disclosure of Tax Avoidance Scheme (DOTAS) rules, which requires promoters to tell HMRC about tax avoidance schemes they design and sell.

The First-tier Tribunal agreed with HMRC that the promoter did not abide by the DOTAS rules.

Penny Ciniewicz, Director General of HMRC’s Customer Compliance Group, said:

This is a great victory that sends a clear message to tax avoidance scheme promoters that we will pursue you if you don’t play by the rules.

Most tax avoidance schemes don’t work. The DOTAS rules ensure that HMRC is notified of schemes so that we can investigate and challenge them.

Designers and promoters of avoidance schemes should come forward now if they haven’t already disclosed a scheme to us. We will take action and nobody should think they can get away with not disclosing their avoidance schemes and misleading users about the need to report them.

HMRC will seek to impose a substantial penalty on the promoter for failure to disclose the scheme.

Notes for Editors

  • There is no right of appeal against the Tribunal decision.
  • HMRC does not approve tax avoidance schemes. Under DOTAS, promoters must notify HMRC of schemes that contain various hallmarks of tax avoidance. If a scheme has been notified under DOTAS, it does not in any way signify that it has been approved by HMRC.
  • HMRC regularly investigates tax avoidance schemes and where it finds rules have been broken, will always take action.
  • DOTAS was introduced in 2004 and has been strengthened and broadened since its introduction to keep pace with the ever-changing avoidance landscape.
  • DOTAS covers tax avoidance involving: Income Tax, Capital Gains Tax, Corporation Tax, National Insurance contributions, Stamp Duty Land Tax, Inheritance Tax and the Annual Tax on Enveloped Dwellings.
  • DOTAS relies on ‘hallmarks’ to describe what has to be disclosed, not on whether something fits a description of ‘avoidance’. HMRC keeps these ‘hallmarks’ under review and has updated and strengthened them regularly since DOTAS was introduced.
  • DOTAS is a self-assessment regime – the promoter must consider the scheme it is developing and disclose it to HMRC if it meets any of the hallmarks.
  • How DOTAS works:
    • Promoter discloses scheme to HMRC
    • A Scheme Reference Number (SRN) is issued by HMRC which the promoter must provide to users.
    • Promoters must report details of their users to HMRC on quarterly client lists.
    • Users must report their use of a scheme to HMRC annually.
    • HMRC have various information powers to tackle non-compliance with the regime and promoters face penalties of up to £1m or more if they fail to disclose a scheme.
    • Disclosure under DOTAS is one of the three triggers to enable HMRC to issue a notice to a taxpayer under the 2014 Accelerated Payments regime.
  • DOTAS guidance can be found here
  • Audio version of statement can be found here
  • A picture of Penny Ciniewicz can be found here

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Email: Adrian.hallchurch@hmrc.gsi.gov.uk

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Link: Press release: Getting to the root of tax avoidance
Source: Gov Press Releases

Press release: Home Office announces package of measures to tackle violent crime

The measures include a new offence of possession of a corrosive substance in public without a good or lawful reason.

It would place the onus on the individual caught in possession to explain why they are carrying it, rather than on the police to prove that it was intended to cause injury.

Those convicted of this offence for a second time would face a mandatory minimum sentence in line with existing knife possession laws.

The proposals are part of the ‘Consultation on new legislation on offensive and dangerous weapons’, which sets out legislative measures to reduce violent crime; respond to recent rises in police-recorded knife and firearm offences; and the emergence of attacks using acids and corrosive substances.

Home Secretary, Amber Rudd said:

All forms of violent crime are totally unacceptable, which is why we are taking action to restrict access to offensive weapons and crack down on those who carry acids with the intent to do harm.

Acid attacks can devastate lives and leave victims with both emotional and physical scars.

By banning the sale of the most harmful corrosive substances to under 18s and introducing minimum custodial sentences to those who repeatedly carry corrosive substances to cause harm, we are sending a message that the cowards who use these as weapons will not escape the full force of the law.

Other measures on which the government will consult are new offences on the sale of acids and the most harmful corrosive substances to people aged under 18, possession of a corrosive substance in public and restricting online sales of knives so they cannot be delivered to a private residential address and must instead be collected at a place where age ID can be checked.

Other measures included in the consultation include:

  • amendments to threatening with a knife or offensive weapon offence to lower the evidential requirement for prosecutors
  • allowing police to seize offensive weapons which are already banned in public places from private properties
  • prohibiting knives (currently banned on school premises) from other educational institutions such as colleges
  • updating the current legislation on the definition of flick knives (to reflect new designs)
  • moving two firearms (.50 calibre and certain rapid firing rifles) from the general licensing arrangements to the stricter provisions of section 5 of the Firearms Act 1968

Members of the public are encouraged to submit their opinions on the consultation which will be open until 9 December.

The Home Office will also review the Poisons Act and include sulphuric acid, meaning it would only be available to purchase with a licence above a certain concentration.

Sarah Newton, the Minister for Crime, Safeguarding and Vulnerability, also today announced the launch of the £500,000 Community Fund for local projects aimed at tackling knife crime and more than £280,000 of successful bids for community work aimed at ending gang violence and exploitation.

Sarah Newton said:

We know these crimes cannot be ended with legislation alone. We need wide-ranging action, including supporting communities to take action. Which is why I’m pleased to announce that we are awarding just over £280,000 funding to projects across the country to help people avoid and escape a life of gangs and violence.

We are also inviting bids for a new £500,000 Community Fund to help grassroots organisations tackle the scourge of knife crime.

Link: Press release: Home Office announces package of measures to tackle violent crime
Source: Gov Press Releases

Press release: Foreign Secretary to visit Moscow

Updated: Added translation

The Foreign Secretary will visit Moscow towards the end of the year following an invitation from Russian Foreign Minister Lavrov, as the UK continues its robust engagement with Russia.

Boris Johnson and Sergei Lavrov last met at the UN General Assembly in September, and now is an important time for both countries to be talking about international security. As permanent members of the UN Security Council, shared concerns include reducing the risk from North Korea’s nuclear and missile programmes.

The visit will be an important opportunity to cover the Iran nuclear deal and other issues of shared interest, including regional stability in the Middle East, and containing threats to international peace. It will also enable us to discuss security co-operation ahead of next summer’s World Cup, on which the UK and Russia are constructively working together.

The UK has deep differences with Russia, in particular over Syria and Ukraine, including the Russian Government’s illegal annexation of Crimea. That’s why we cannot return to ‘business as usual’ but it is vital to continue dialogue on matters of UK national interest.

The visit comes as part of the UK’s sustained, robust engagement with the Russian government. The Prime Minister also made it clear to President Putin at the G20 that it is in both sides’ interests to continue these channels of communication.

The Foreign Secretary Boris Johnson said:

Russia is a fellow permanent member of the UN Security Council and there are global security issues we need to discuss from Iran to North Korea. Of course we will continue to challenge Russia’s approach where we disagree, whether that is Russia’s actions in Syria or its aggression towards Ukraine. My visit will provide an opportunity to talk about these issues and more, face-to-face.

Our relationship with Russia is not straightforward. That is all the more reason to be talking to Russia – to manage our differences and co-operate where possible for the security of both our nations and the international community.

I am looking forward to visiting Moscow, to engaging with the Russian government and a wider range of Russian people including civil society and the all important next generation.

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Link: Press release: Foreign Secretary to visit Moscow
Source: Gov Press Releases

Press release: Disgraced dentist and bankrupt doctor disqualified as directors

A former dentist who was struck off for dishonesty and poor clinical care and who was also bankrupt, together with a bankrupt GP from Harrow, have been disqualified from acting as directors after making false representations to a financial institution in their application for funding totalling £1.3 million.

The pair alleged they intended to use the funding for the purchase of shares in Weymouth Medical Ltd, a dental training company, with Jagdev Wasu acting as company director despite his bankruptcy order barring him from doing so legally. Following the collapse of Weymouth Medical Ltd, the bank was left with a shortfall of over £650,000.

Jagdev Wasu acted as a director of Weymouth whilst prohibited from doing so, having been declared bankrupt on 18 October 2013.

Commenting on the disqualification, Robert Clarke, Investigations Group Leader at the Insolvency Service said:

Company directors should be under no illusion that it is a serious offence for a person to act as company director whilst undischarged from bankruptcy.

In this case, the breach was exacerbated by providing false information to secure funding for the company, the failure to disclose the true position, causing substantial monetary loss.

The Secretary of State for Business, Energy and Industrial Strategy accepted undertakings from Jagdev Wasu and Paramit Wasu that they would each not act as directors for 11 years on 16 August 2017. The disqualifications came into effect on 6 September 2017.

Notes to editors

Weymouth (CRN 09092402) was placed into Administration on 17 September 2015 with a deficiency as regards creditors of £497,036.

The company, which was incorporated on 19 June 2014, traded as a holding company for a medical centre and dental training company. Weymouth’s registered office was 97 Windsor Road, Gerrards Cross, Buckinghamshire, SL9 7NW.

Jagdev Wasu’s date of birth is November 1975. Paramit Wasu’s date of birth is March 1948.

A disqualification order has the effect that without specific permission of a court, a person with a disqualification cannot:

  • act as a director of a company
  • take part, directly or indirectly, in the promotion, formation or management of a company or limited liability partnership
  • be a receiver of a company’s property

Disqualification undertakings are the administrative equivalent of a disqualification order but do not involve court proceedings.
Persons subject to a disqualification order are bound by a range of other restrictions.

The Insolvency Service, an executive agency sponsored by the Department for Business, Energy and Industrial Strategy (BEIS), administers the insolvency regime, and aims to deliver and promote a range of investigation and enforcement activities both civil and criminal in nature, to support fair and open markets. We do this by effectively enforcing the statutory company and insolvency regimes, maintaining public confidence in those regimes and reducing the harm caused to victims of fraudulent activity and to the business community, including dealing with the disqualification of directors in corporate failures.

Contact Press Office

Press Office

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SW1P 2HT

This service is for journalists only. For any other queries, please contact the Insolvency Enquiry line on 0300 678 0015.

For all media enquiries outside normal working hours, please contact the Department for Business, Energy and Industrial Strategy Press Office on 020 7215 1000.

You can also follow the Insolvency Service on:

Link: Press release: Disgraced dentist and bankrupt doctor disqualified as directors
Source: Gov Press Releases

Press release: International Charter space data to support Red Cross and Red Crescent disaster relief efforts

The world’s largest humanitarian network of 190 national societies will now have access to disaster mapping services based on satellite data supplied by the International Charter members.

Sune Bülow, Team Leader, Emergency Operations and Information Management at IFRC said:

Having immediate access to data and derived analysis for disaster prevention, response and recovery, is of vital importance to the IFRC. Both in the first hours of a sudden-onset event and throughout response to protracted crises, the Red Cross and Red Crescent National Societies are often among the first disaster responders, and access to the International Charter will only improve the already formidable partnership with UNOSAT and ensure that we are also among the first to receive and analyse information.

Since 2000 the International Charter ‘Space and Major Disasters’ has been using space data to provide help to those affected by disasters.

The Charter, a group of space agencies, works to mitigate the effects on human life and property by providing rapid access to satellite data to assist rescue authorities in the event of a natural or manmade disaster.

Einar Bjorgo, Manager of the United Nations Institute for Training and Research stated:

We need to ensure maximum impact from Earth Observation data during disasters. Being able to support the International Federation of the Red Cross and Red Crescent Societies, and their national members, with satellite image analysis derived from Charter data will greatly contribute to this goal.

Chris Lee, Head of International Policy at the UK Space Agency and outgoing Chair of the Disasters Charter noted:

We are proud to have agreed this new relationship with the International Federation of Red Cross and Red Crescent Societies. This is a fantastic opportunity for the Charter to make a real difference to communities and disaster management efforts on the ground, made possible through our work with the United Nations.

Recent activations

Requests for Charter support for emergencies have included Hurricane Irma, which hit the United States and parts of the Caribbean in early September and Hurricane Maria, a devastating storm that affected the Caribbean just a couple of weeks later.

Hurricane Irma, a Category 5 storm, ploughed through the Caribbean on 6 and 7 September 2017. In the Caribbean the storm left at least 44 dead and thousands of people were made homeless. In the United States at least 80 people were killed and the storm left flooding and damage to infrastructure in its wake.

The Charter was involved in the planning and coordination of the emergency response operation by providing satellite-derived analysis of building damage, flooding and mapping.

Hurricane Maria followed in the wake of Hurricane Irma and affected some of the same countries, with devastating results to some of the islands. Maria made landfall in Dominica on 19 September with the giant storm totally engulfing the island. It left 15 dead and devastated the island.

It then caused flooding and landslides in the Dominican Republic where at least two people were killed and 10,000 people were forced to evacuate their homes. In Puerto Rico 15 people were killed and the entire island was left without power. In the U.S. Virgin Islands one person was killed, while two people were killed in Guadeloupe. Again, the Charter helped by providing damage assessment and information on flooding and damage assessment.

Link: Press release: International Charter space data to support Red Cross and Red Crescent disaster relief efforts
Source: Gov Press Releases

Press release: Change of Her Majesty’s Ambassador to Finland

Mr Tom Dodd has been appointed Her Majesty’s Ambassador to the Republic of Finland in succession to Ms Sarah Price who will be transferring to another Diplomatic Service appointment. Mr Dodd will take up his appointment during January 2018.

Full name: Thomas Erik Dodd

CURRICULUM VITAE

2016 – present FCO, Head, Counter Terrorism Department
2013 – 2015 FCO, Head, South East Asia Department
2011 – 2012 Cabinet Office, Deputy Chief Assessments Staff, Joint Intelligence Organisation
2009 – 2010 Kabul, Deputy Ambassador
2007 – 2008 Home Office, Head of Border & Visa Policy, UK Border Agency
2006 – 2007 Home Office, International Delivery Director & Europe Director, Immigration and Nationality Directorate
2005 Home Office, Deputy Director, European Policy, Immigration and Nationality Directorate
2005 Cabinet Office, Desk Officer, Civil Contingencies Secretariat
2004 Basra, Deputy Consul General
2001 – 2003 Cabinet Office, Desk Officer (Asia & Middle East), Overseas and Defence Secretariat
1998 – 2001 Cabinet Office, Desk Officer (Asia), Joint Intelligence Organisation
1991 – 1998 House of Commons Research Service, Assistant and later Senior Clerk, International Affairs and Defence Section

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Link: Press release: Change of Her Majesty’s Ambassador to Finland
Source: Gov Press Releases

Press release: Increased sentences for 2 Nottingham child sex offenders

Two men, convicted of serious sexual offences against children, have had their jail terms increased by the Court of Appeal.

Derrick Dobson, 80 and John Smith, 71 were sentenced in August at Nottingham Crown Court. Dobson was convicted on 5 counts of indecent assault and was originally given a 6 month jail sentence. Smith, pleaded guilty to committing sexual assaults including rape, and was given a 5 ½ year prison sentence.

The 2 offenders were also made the subject of a Sexual Harm Prevention Order for 10 years and will be prevented from working with vulnerable groups, including children.

The Solicitor General Robert Buckland QC MP welcomed the extension of these sentences from 6 months to 4 years 6 months for Dobson and 12 years instead of the original sentence of 5 ½ years for Smith.

Speaking after the hearing the Solicitor General said:

“I am pleased the Court of Appeal has recognised that the original sentences handed down were unduly lenient. The 2 offenders attacked their victims over a number of years and this abuse led to long-lasting devastating impacts. The increased jail terms now really reflect the severity of the offences.”

Link: Press release: Increased sentences for 2 Nottingham child sex offenders
Source: Gov Press Releases

The Sections 106B, 106C and 106D of the Taxes Management Act 1970 (Specified Threshold Amount) Regulations 2017

A taxpayer will be guilty of an offence under sections 106B, 106C or 106D of the Taxes Management Act 1970 (c. 9) (“TMA 1970”) in respect of certain failures to comply with sections 7 or 8 of the TMA 1970 for the year of assessment commencing on 6th April 2017 or a subsequent year where, as a result of the failure, the taxpayer does not tell the Commissioners for Her Majesty’s Revenue and Customs (“HMRC”) that the taxpayer is liable to pay an amount of income tax or capital gains tax chargeable on or by reference to offshore income, assets or liabilities (“relevant tax”). There is no offence under those provisions if the total of the relevant tax unreported to HMRC for the year of assessment in question does not exceed the “threshold amount”. Regulation 3 specifies the threshold amount as £25,000. Regulations 4 to 9 set out the means of determining whether the threshold amount has been exceeded.
Link: The Sections 106B, 106C and 106D of the Taxes Management Act 1970 (Specified Threshold Amount) Regulations 2017
Source: Legislation .gov.uk