PITY THE STRUGGLING TAX AVOIDERS

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PITY THE STRUGGLING TAX AVOIDERS

  

An article in the Sunday Telegraph caught my eye recently.  It was an interview with former footballer Louis Saha.  What I noticed read:

“I know more than anybody that some footballers struggle because they invest in a scheme to pay their tax bill.  Then the Revenue changes its mind and suddenly they find they’ve got £600,000 to pay next month”.

The interview also mentioned that Mr Saha’s worst financial move was when he invested in a scheme with a bank and lost around six figures.  “It was an investment scheme where you could recover tax when investing in technology companies”.

I was intrigued by the claim that HMRC changed its mind.  I know nothing about Mr Saha’s tax affairs, but I suspect that he means that he entered into a tax avoidance scheme hoping to avoid having to pay £600,000 of tax and HMRC have issued him with an advance payment notice demanding the tax.  If so, I have no sympathy for him.  £600,000 is of course tax on £1.2million (if it was tax at 50%) or possibly £1.5million (if it was tax at 40%).  I suspect a lot of people would like to “struggle” on £1.5million!

But it is the thought that HMRC changed its mind that intrigues me.  Does Mr Saha really believe that at some stage HMRC welcomed taxpayers using tax avoidance schemes?  That they hate collecting tax and rolled out the red carpet at 100 Parliament Street to congratulate those struggling footballers who felt that 40% tax was too much and that they were entitled to choose a much lower effective tax rate to pay?

I don’t know if this tax avoidance scheme is the same “investment” for which he is going to sue his bank.  If so, he seems bound to lose because the bank could not have foreseen that HMRC would change its mind.  Surely he should be suing HMRC!  If they first encouraged avoidance and when “struggling” footballers did as HMRC wanted them to do to avoid tax changed their mind.  It is clearly unreasonable for HMRC to have lured them into a trap and then changed its mind and decided that it no longer approves of tax avoidance.

ROBERT MAAS