HMRC’s different approach to avoidance schemes

The tax avoidance industry has been through a remarkable transformation over the past decade. Ten years ago there were only two tax avoidance schemes that were sold to individuals in any volume: sideways loss relief schemes and disguised remuneration schemes. According to HMRC figures in the 2013-2014 tax year 35% of all users of tax avoidance schemes – 8 500 people – were members of sideways loss relief schemes. Today that figure is zero.

Over the same period disguised remuneration has flourished. There were 13 200 people involved in disguised remuneration in 2013-14 but this has risen to 28 000 in 2019-20 the latest year when figures are available.

Why is it that HMRC has been so comprehensively successful at combating one form of tax avoidance while demonstrably failing to deal with another?

Respectable end of the avoidance market

In an appearance before the...