When it comes to taxes, even a slight mistake can cost you a whole lot of money. This is why you need to very careful when dealing with taxes to avoid errors as much as possible.

If you want to minimise your tax bill in a legal manner, you can go ahead and use tax avoidance schemes. Basically, they are legal arrangements that help to mitigate tax charges.

Alternatively, if you deliberately conceal your income from HMRC, you will be considered evading tax, which is a crime and even face conviction. And, if HMRC disagrees with how you’ve reduced your tax bill, they will demand you pay back the extra tax along with the interest and penalties.

Moreover, you should keep in mind that HMRC always enquire an individual or company who has invested in a tax avoidance scheme.

In the recent years, few celebrities have also been in the tax avoidance news mainly due to their scheme failures. As a result, they had to pay back the huge amount of tax. So, here’s the thing, most of the schemes don’t work which almost all the tax promoters won’t tell you.

This has only caused HMRC to make their rules more harsher and have proposed that taxpayers must pay any disputed tax up front. In any cases of successful schemes after investigation, refund will be available for you.

Tax avoidance schemes are also complex, which can give rise to additional complex tax consequences. In addition, the disruption caused by dealing with HMRC enquiries and uncertainty over the outcome is another problem that surrounds this scheme.

Anyone tempted to use this scheme, it is important you know all these facts and consult a professional adviser before you commit yourself to it.

For more information about tax planning services, contact one of our tax accountants today.