A NEWSPAPER-BASED tax avoidance scheme worth £5.6m has been blocked in a tribunal by HM Revenue & Customs, clawing back £104m for the public purse through similar cases.
The scheme functioned by licencing newspaper mastheads to avoid tax, but the tribunal ruled subsidiaries of Iliffe News and Media were not entitled to tax deductions on payments made to its parent company for their use.
Between 2003 and 2005, various trading subsidiaries of Iliffe assigned the mastheads to the parent company and then licensed them back for a fixed term in return for a lump sum payment.
HMRC said the legislation was changed in 2005 in order to scupper schemes such as Iliffe's.
Jim Harra, HMRC director-general for business tax, said: "This is an important ruling against a marketed avoidance scheme and the latest in a series of successful HMRC challenges to such schemes. We will continue to challenge artificial arrangements such as this in the interests of the vast majority of businesses and people who choose to play by the rules."
Sign up for Financial Director email alerts
Please enter your email below to receive your profile link
Search by job title, salary, or location - we only list senior financial roles
Accountancy Age has partnered with Home Learning College to offer you and your trainees a personalised learning experience with an all inclusive package
Join Financial Director and Infor to discover how migrating your ERP resource to the cloud can have a beneficial impact on your company’s profitability
Send to a friend