Following a tip-off that artificial trading companies were being set up in tax heavens, the Treasury has opted to close a scheme which could have cost the economy in lost tax receipts.
It’s believed that wealthy individuals were planning to use to use a long standing “past-cessation trade relief” – designed for tradesmen and professionals to offset legitimate costs against their income – to artificially reduce their tax bills.
Exchequer Secretary, David Gauke, said the scheme would have put a “significant” amount of money at risk, adding: “It is unacceptable, at a time when we are trying to bring down the deficit, that there are those who try to avoid paying the tax they owe.”
The current scheme could have legitimately been used by a tradesperson or professional who had ceased trading, but later incurred costs from responding to customer requests where they remained liable.
For more information, please contact Glazers, Chartered Accountants London or visit www.glazers.co.uk
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