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Consultation to tackle abuse of the insolvency regime.
HMRC has published a consultation document covering proposals to tackle avoidance and evasion through abuse of the insolvency regime by using companies or similar structures including phoenixism.
The department states it is not targeting companies of any particular size. Those in genuine difficulty should be clear that their rights will continue to be protected.
The paper focuses on businesses that:
- exploit insolvency procedures to avoid or evade taxes;
- attempt to protect or hide the gains of tax avoidance or evasion; and
- repeatedly accumulate tax debts without paying them by setting up a series of corporate entities.
Possible solutions outlined in the document are:
- to extend the power to transfer liability for tax debts to the persons responsible for the avoidance evasion or repeated non-payment of taxes when there is a risk the funds...
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