I have worked on a freelance basis for over 13 years. For various reasons—to do with employment law and VAT mainly—I operate through a limited company. This means that I am actually an employee of a company, albeit a company which is 100% owned by me. This means that I operate a payroll system (I use the Xero online accounting system and I recommend it to anyone running a small business) which means that I get regular (at least one a week) emails from HMRC about payroll matters.
Earlier this week I received an email about ‘disguised remuneration loan charges’. I am not an expert in this but I believe some organisations with employees on high salaries use devices where they ‘lend’ money to the employee rather than pay their salary in order to avoid the tax, presumably for both the employer and the employee. Rangers Football Club lost a case at the Supreme Court in 2017 about the use of employee benefit trusts to channel payments to players and management in the form of loans.
None of that is relevant to me but I did notice the following paragraph in the email.
Tax avoidance doesn’t pay. Most arrangements simply don’t work and people can end up paying more than they were trying to avoid. Users may have a long-term requirement to deal with the cost, commercial and tax fallout from these transactions with no support from the promoter of the original arrangement.
I think perhaps this warning (the first four words, at least) should be prominently displayed on all HMRC communications and wherever wealthy people gather so that they recognise how risky the schemes they sign up with, for large fees, really are.