UT : No immunity from tax for vaccine avoidance scheme

[eazy]

UT : No immunity from tax for vaccine avoidance scheme
https://www.gov.uk/government/news/n...oidance-scheme
Published 4 September 2014

A tax avoidance scheme that abused tax relief for research into life-saving vaccines to claim back £77m in tax, has been rejected again by a tribunal.

Investors in the scheme used a Jersey-registered limited partnership which claimed to be involved in creating and exploiting intellectual property from research into vaccines against diseases such as HIV, flu, Hepatitis A and Hepatitis B.

The Vaccine Research Limited Partnership scheme, promoted by Matrix Structured Finance, tried to exploit a tax relief for spending on research and development by claiming back all the tax due on an alleged investment of £114m and a first-year trading loss of £193 million.

But the upper tribunal has now backed a 2013 ruling by the first-tier tribunal in favour of HMRC, finding that only £14m had been spent on R&D.

David Gauke, Financial Secretary to the Treasury, said it was the latest in a series of HMRC tribunal wins over avoidance schemes whose members try to exploit rules for partnerships.

[Rob79]

UT : No immunity from tax for vaccine avoidance scheme
https://www.gov.uk/government/news/n...oidance-scheme
Published 4 September 2014

A tax avoidance scheme that abused tax relief for research into life-saving vaccines to claim back £77m in tax, has been rejected again by a tribunal.

Investors in the scheme used a Jersey-registered limited partnership which claimed to be involved in creating and exploiting intellectual property from research into vaccines against diseases such as HIV, flu, Hepatitis A and Hepatitis B.

The Vaccine Research Limited Partnership scheme, promoted by Matrix Structured Finance, tried to exploit a tax relief for spending on research and development by claiming back all the tax due on an alleged investment of £114m and a first-year trading loss of £193 million.

But the upper tribunal has now backed a 2013 ruling by the first-tier tribunal in favour of HMRC, finding that only £14m had been spent on R&D.

David Gauke, Financial Secretary to the Treasury, said it was the latest in a series of HMRC tribunal wins over avoidance schemes whose members try to exploit rules for partnerships.

Excellent summary.

I am able to speak to this one as it reflects a lot of the elements I see every day.

The position is (as you might expect) a bit more complex than it seems but it is a good example of how something packaged as helping the human race is actually a tax avoidance device. We call them tax shaggers.

Matrix have also gone pop since so the members are up that creek using their hands.

[BlasterBates]

From what I understand anything that has a justfiable commercial reason will generally be accepted.

So when Starbucks pay no tax this video gves a great explanation as to how they can legitimately do this

https://www.youtube.com/watch?v=Th4fxMFRIt0

In the long distant past I did get a professional accountancy qualification and this is exactly how tax avoidance was taught, i.e. you have leeway as how you structure profits, BUT, and this is important it has to be justified according to standard accounting principles (e.g. generally acceptable methods of calculating depreciation) and commercially viable, i.e. you can't simply charge silly interest rates from the head office or silly transfer prices, and this has to be agreed with HMRC. In other words expect your P&L to be scrutinised by HMRC and that you need to defend your decisions, and expect HMRC to challenge it.

Unfortunately the accountancy and legal profession is undermined by sharks who knowingly push the barriers way beyond this.