TAX RETURNS - 19.07.2007

The ultimate question

Tax avoidance is almost the last section on the personal tax return for 2006/7. You have to consider whether you are party to a disclosable tax avoidance scheme. If so you need to complete boxes 23.5 and 23.6. By way of “help” page 30 of the tax return guide begins: “If you have used a scheme of arrangement to obtain a tax advantage that you are required to disclose…”.

Scheme of arrangement. The Taxman refers you to his website (see The next step) where he provides a summary of the disclosure rules. There is certainly no shortage of material provided by his Anti-Avoidance Group. However, he gives you the impression that the legislation is widely drawn and it is only his discretion that provides an exception for everyday tax advice.

Since August 1. The disclosure regime was limited in scope to tax arrangements concerning employment or certain financial products. This was widened with effect from August 1, 2006 to income tax, Corporation Tax and Capital Gains Tax. So did you sign up for any new schemes between August 1, 2006 and April 5, 2007?

Tip 1. Only if you’ve been issued with a scheme reference number during 2006/7 (between April 6, 2006 to April 5, 2007) do you need to disclose it when completing your 2007 personal tax return. This should have been provided by the promoter of the scheme, i.e. it’s somebody else’s problem if you haven’t been notified.

Tip 2. Disclosing arrangements connected with your employment are the responsibility of your employer. They have to decide about disclosure and notify the Taxman directly using a special form. So nothing for you to worry about on your tax return.

The next step

For a link to the Taxman’s summary of the disclosure rules, visit http://tax.indicator.co.uk (TX 07.20.01).