Claim tax bills wiped out by clever advice
THE chancellor may be on the warpath, but business owners can still wipe out their tax bill using clever advice, according to the sponsors of a seminar in Edinburgh this week.
“I am aware of a number of business owners, generating profits in excess of £200,000, who have already been able to reduce their corporate and personal tax to zero by implementing strategies”, says the invitation from Chris Thomas, a director at Edinburgh-based One Accounting, a firm of chartered management accountants.
“This s e s s i on i s by invitation only, places are strictly limited, I have to say this is the first time in many years I have been so excited by tax planning opportunities,” Mr Thomas writes.
Coincidentally, in a letter advertising a similar event in Newcastle in March 2010, Stephen Brownlee of SDB Accountants wrote exactly the same thing.
Asked whether t he anti-avoidance crackdown by George Osborne and HM Revenue & Customs had limited the scope for such strategies, Mr Thomas referred The Herald to Kirkcaldy-based Peak Performance, which provides the speaker for the event as it has done for similar events around the country for quite some time.
Nobody was available for comment at Peak Performance. But advisers contacted by The Herald suggested that the magic £200,000 tax saving might be related to pensions.
One said: “If people haven’t made any pension contributions in the last three years, they can pay in £50,000 for each year and £50,000 for this year, tax-free and Ni-free.”
The pension fund buys the business owner’s property, the business rents it back, the owner lowers his profits.
In the cat-and-mouse game between tax advisers and HMRC, it pays to be upfront, says Mi k e Mccusker, tax partner at Pricewaterhousecoopers in Glasgow.
“There are distinct channels of reporting which have now been agreed with the profession, where we have to disclose what we are doing with clients.
“Opportunities have been limited, but there is an awful lot of tax planning you can do legitimately which can have a massive impact.”
Mr Mccusker points to employee benefit trusts and other ingenious, but legitimate structures used to convert high-fliers’ bonuses