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HMRC spikes £5.6m newspaper tax avoidance scheme
by William Robins on Nov 14, 2012 at 12:36
A newspaper-based tax avoidance scheme that could have saved members £104 million has been blocked by HM Revenue & Customs.
The scheme which claimed to license newspaper mastheads to avoid tax has been successfully challenged by HMRC in court.
The scheme sought to avoid £5.6 million in taxes, but HMRC said the tax tribunal court ruling would apply to a potential £104 million in similar cases.
The tribunal ruled that subsidiaries of Iliffe News and Media Limited were not entitled to a tax deduction for payments they had made to their parent company to use their own mastheads.
Between 2003 and 2005 various trading subsidiaries of the Iliffe News and Media group assigned unregistered trade marks (mastheads) to the parent company and then licensed them back for a fixed term in return for a lump sum payment.
The group claimed the lump sum fee was within the capital gains regime and claimed that so-called no gain, no loss provisions applied.
HMRC said legislation was changed in December 2005 to prevent this type of scheme operating.
Jim Harra, HMRC’s director general for business tax said: “This is an important ruling against a marketed avoidance scheme and the latest in a series of successful HMRC challenges to such schemes. We will continue to challenge artificial arrangements such as this in the interests of the vast majority of businesses and people who choose to play by the rules.'
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by William Robins on Apr 17, 2014 at 12:21