Six arrested in connection with scheme to dodge tax avoidance crackdown

Sam Meadows
HMRC raised properties across the country as part of its investigation - PA
HMRC raised properties across the country as part of its investigation - PA

Six people have been arrested in connection with a scheme promising to sidestep a controversial tax avoidance crackdown.

Telegraph Money has previously warned against dubious arrangements promising to sidestep the loan charge, which has been levied on contractors who used so-called disguised remuneration schemes dating back 20 years.

The 50,000 affected people face huge bills for unpaid tax, in some cases well over £100,000, and a number of schemes have sprung up promising to avoid the charge – often by artificially repaying any outstanding loans. Experts have warned that use of such schemes could lead to further penalties.

Fifty officers from HM Revenue & Customs swooped in two raids in the past week and searched premises in London, Guildford, Stevenage, Stratford-upon-Avon and Kent. Six people have been arrested on suspicion of cheating the public revenue and committing fraud by false representation.

The loan charge has become a controversial matter. An influential House of Lords committee described it as “retrospective” and an assault on “access to justice”. Campaigners say some people are facing bankruptcy as a result and at least one person facing the charge has committed suicide.

HMRC has said the schemes used were “contrived tax avoidance” and the loan charge simply recoups the unpaid tax.

A spokesman said: “We strongly encourage people not to use loan-busting schemes and methods. They clearly don’t work and people run the risk of losing more money and being involved in fraud. As we always say – if it looks too good to be true, then it undoubtedly is.”

The six arrested were a man from Guildford, 54, a man from Stevenage, 58, a man from Stratford, 50, a man from south London, 78, a woman from Tonbridge, 45, and a 50-year-old man from Sevenoaks in Kent. All have been released pending further investigation.

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