In many insolvency cases H M Revenue & Customs (“HMRC”) are often one of the largest, if not the largest creditor. With the vast proportion of insolvencies not resulting in a return to creditors, HMRC are forced to write off a substantial sum each year in bad debts.
This is a large contributing factor towards HMRC securing a secondary preferential status in insolvency (to be implement in December 2020) and new powers enabling HMRC to hold directors joint and severally liable for a company’s tax debts (click here see our recent blog article on this for further detail).
It is therefore with immense pride that following an investigation which was commenced by our management team whilst at Cranfield Business Recovery Limited, and concluded through its succession at Ballard Business Recovery Limited, a dividend of in excess of £1m has been achieved for HMRC representing a return of over 75 pence in the pound.
Our investigation surrounded the use of various schemes utilised by the company over a number of years that were subsequently labelled by HMRC as ‘tax avoidance schemes’. It has been widely publicised over recent years that HMRC had intended to crack down on companies and directors who had benefited from such schemes. This has been followed by several high profile tax cases and the issuing of Reg 80 determinations and Advanced Payment Notices (“APNs”).
Having worked closely with solicitors and HMRC officials, we were successfully able to negotiate a tripartite settlement between the company, its directors and HMRC. This has not only demonstrated the capabilities of our team to HMRC but has also brought a conclusion for the directors who have faced years of uncertainty as to what personal exposure they may or may not have as a result of the use of the schemes.
Do you have any clients who have used tax avoidance schemes?
As has been demonstrated by this case, HMRC are prepared to enter into settlement agreements that will bring an end to their investigations as regards the use of tax avoidance schemes. Despite various settlement opportunities, many companies and/or directors are unable to provide the required payments to HMRC.
If you have any clients who are technically insolvent as a result of being unable to settle Reg 80 determinations or APNs, please contact us. We will work with you to negotiate a settlement with HMRC.