The barrister’s ‘legal opinion’ behind the tax dodge was forged
claims to be able to save a buyer of a £1m second home £43,328 in stamp duty. Mr Connolly insisted the strategies deployed by Fiducia Wealth & Tax were entirely legal. He said: “Touch wood, our barristers and accountants are as good as it gets.”
In another ongoing case that went to a tax tribunal, the papers of which were published last month, four connected companies offering stamp duty avoidance services went into liquidation when their schemes failed, leaving 3,000 customers out of pocket and at risk of fines.
Inventive Tax Strategies, Professional Advice Bureau, Sterling Tax Strategies and Bell Strategies had promised to refund customers’ fees if their taxbusting strategies failed, but were unable to do so.
Two insurance policies taken out with a company based in Belize also failed to pay out. In a further twist, court papers show the companies made applications to HMRC for VAT refunds in order to pay their creditors – leading the taxman to make payments totalling more than £3m. HMRC later realised its mistake and blocked further requests for a sum of £2.1m.
ITS Action Group now represents a number of the four companies’ customers, who have been made creditors by the administrators.
A spokesman for HMRC said: “Most avoidance schemes simply do not work, and the people who get involved can end up paying more than they were trying to avoid in their misguided attempts to save money.”
He added that a “scheme reference number” – a reference for HMRC – does not mean it has been cleared by the taxman. Schemes must always be disclosed.
Paul Emery, a partner at PwC, the accountancy firm, said new rules requiring anyone using a scheme to mitigate tax to disclose details to HMRC were curtailing these sorts of cases, noting: “HMRC is also using Land Registry data and matching this up with tax returns.”
He added: “It can be difficult to discern legitimate planning from something the courts are likely to find against. If it does sound too good to be true, get a second opinion from a professional.”
The Fiducia mentioned here is in no way connected with Colchesterbased Fiducia Wealth Management