Readers' forum : Ignorance is not bliss

I have a client who was involved in one of those contractor tax planning schemes and HMRC is now asking for income tax and National Insurance of £30 000 with interest. When entering this scheme my client was under the impression that there was no problem because he was assured that it would withstand HMRC scrutiny.

From what I understand of this arrangement the individual was a member of a partnership which contracted his services to a recruitment agency or an end-client. The partnership raised invoices and was responsible for debt collection and payment. The benefits of this arrangement were that the client would retain a substantial proportion of the earnings but without having to operate a limited company.

The tax planning company has agreed to help to fight the case but who knows how long it will be around for. If this company ceases...