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HMRC to tackle Project 2010
HMRC are preparing to take legal action against Project 2010, a tax-dodge scheme that abuses the gift aid system.
The avoidance arrangement is designed to exploit the gift aid rules by using a series of circular payments. It starts with the charity spending a significant figure on an asset – most commonly gilts – that passes through a third party to an individual taxpayer for a very small sum.
The taxpayer is expected to make a sale for the original purchase price and pass the money to the charity. An option ensures the asset will be returned to the charity if it does not receive a cash gift of the original price within one or two days.
The Revenue says it will challenge the use of Project 2010 and litigate where necessary. The department is set to contact the remaining users before taking legal action, inviting them to reconsider their position and let the authorities know if they wish to withdraw their claims.
