HMRC expose new “complex tax avoidance scheme”

HMRC has shared a recent press release with our team and we thought you would find it helpful. Please keep reading to learn more about the new scheme, which is associated with Darren Patrick-Green and involves contractors engaging with a Singapore company, Procorre LLP, to avoid paying Income Tax and National Insurance.

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Official HMRC Press Release – Thursday 29^th February 2024

A complex tax avoidance scheme that moves income offshore has been exposed by HM Revenue and Customs (HMRC) today (29 February 2024), with anyone who has joined the arrangement warned to get out of it as soon as possible.

The scheme – linked to businessman Darren Patrick-Green – involves contractors joining Singapore registered Procorre LLP to avoid paying Income Tax and National Insurance.

These workers and their Personal Service Companies (PSCs) enter into contracts to provide services to their clients as usual.

The PSCs invoice these clients and transfer the money received to Procorre LLP.

Procorre LLP then deducts a fee before returning the rest of the income to the individuals or their PSCs. This money comprises various forms of payments including bank transfers from multiple sources and pre-paid cards.

These payments should be subject to Income Tax and National Insurance Contributions and anyone involved in this scheme should contact HMRC as soon as possible and leave the arrangement.

Darren Patrick-Green (also known as Darren Green) is the Ultimate Beneficial Owner (UBO) of Corre Holdings SA (CHSA), a Swiss-based firm which is the majority owner of Procorre LLP. CHSA is also suspected by HMRC of involvement in further arrangements, potentially including the acquisition of users’ PSCs.

Also named on GOV.UK today for being in control of Procorre LLP is Jason Bougourd and Alizeh Nanji.

Jonathan Smith, HMRC’s Director of Counter Avoidance, said:

“Tax avoidance schemes are cynically marketed as clever ways to pay less tax. The truth is they rarely work in the way the promoters claim and it is the users that can end up with unexpected tax bills.

“We would urge anyone who thinks they have entered these schemes to contact us as soon as possible to get help.”

More detail about this scheme can be found on HMRC’s list of named tax avoidance schemes, promoters, enablers and suppliers on GOV.UK. Two other schemes were also named today.

HMRC urges taxpayers to be vigilant and to stay away from tax avoidance. The Don’t Get Caught Out campaign reveals the consequences of using tax avoidance schemes which could be unexpected tax bills, interest and penalties.

If anyone has used a tax avoidance scheme promoted by any firm HMRC has named, please contact HMRC by emailing: CAGetHelpOutOfTaxAvoidance@hmrc.gov.uk.

Notes to Editors

A further two schemes and one associated individual have been named today on GOV.UK:
1. React Administration Services Limited and Kevin Taylor
2. Abchurch Limited
In addition to the above, HMRC has published the DOTAS Scheme Reference Numbers for two more schemes: Apricot Umbrella Limited and ABC Umbrella Limited.
A new criminal offence now applies to promoters of tax avoidance who fail to comply with a Stop Notice under the Promoters of Tax Avoidance Schemes (POTAS) regime in respect of tax avoidance arrangements. The legislation received Royal Assent on Thursday 22 February 2024 and came into effect immediately. This legislation also introduced a new power to allow HMRC to act more swiftly to disqualify directors of companies involved in promoting tax avoidance.
Follow HMRC’s Press Office on Twitter @HMRCpressoffice.

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Promoters of tax avoidance – factsheet

HMRC also shared a ‘Promoters of tax avoidance’ factsheet. The information is below:

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Tax avoidance involves entering into arrangements to try to gain a tax advantage that Parliament never intended. It usually involves contrived transactions that serve little or no purpose other than to seek to reduce the amount of tax the user owes. Tax avoidance schemes seldom work to achieve the promised tax advantage, and HMRC challenges the promotion and use of tax avoidance to ensure that the correct tax is paid.

The promoter of a tax avoidance scheme is generally the person or people who designs or markets the scheme or is responsible for its organisation. Promoters market schemes that they claim reduce tax – charging fees for their services but leaving their clients with the risk of facing a tax bill when HMRC demonstrates that the scheme does not deliver the promised tax saving.

In the past, avoidance schemes were often marketed to large businesses and wealthy individuals by highly professional firms and banks. Over the last 20 years or so, HMRC action, backed by legislation passed by successive governments and parliaments, has succeeded in pushing professional firms and banks out of the avoidance market.

Today, tax avoidance schemes are largely marketed to workers on middle incomes by a few dozen promoter organisations, often controlled by individuals based offshore. These promoters often act unscrupulously and unprofessionally, caring little for the interests of the people who use their schemes or for complying with the law. They increasingly rely on misleading people, trying to block and delay HMRC’s investigations and “cutting and running”, leaving users unsupported when facing a tax bill from HMRC.

In light of the change in the tax avoidance market in recent years – the nature of both the users caught up in them and the promoters selling them – HMRC’s counter-avoidance strategy has evolved to focus on helping workers to identify when they are being offered a tax avoidance scheme, helping users to get out of tax avoidance and put their tax affairs in order as quickly as possible, and disrupting and tackling the promotion of tax avoidance schemes.

Our work has led to more than 20 organisations promoting tax avoidance leaving the marketplace entirely – and when others start up, we use our powers to move quickly to shut down their schemes too.

Since tough new anti-promoter measures came into force in 2021, our work has stopped more than £500 million of tax going unpaid through avoidance. That’s money that thousands of people would otherwise have faced the stress of having to pay through unexpected tax bills or that would have been lost to the exchequer. But latest published figures show that 31,000 people used tax avoidance schemes in 2020-21 (down from 44,000 in 2017-18), so there is still more work to do.

Since 2021, when new measures came into force, we have:

Publicly named 65 avoidance schemes and 59 companies promoting avoidance: publishing the details online means people can make more informed decisions and steer clear of avoidance schemes and the firms that promote them. Promoters themselves have said in court that this action causes them significant damage and often forces them to stop trading. All of these publications relate to disguised remuneration tax avoidance.
Defeated 14 legal challenges from promoters seeking either to prevent HMRC from publishing details of their schemes or to force HMRC to remove references to their schemes from our publications.
Issued 24 ‘stop notices’ prohibiting the sale of 22 schemes. A stop notice legally requires the promoter organisation to stop selling the specified avoidance scheme, inform those using the scheme that it has been subject to the stop notice, and tell HMRC about all the current and previous users of the scheme.
Issued more than 300 notices to promoter organisations and others we think are enabling tax avoidance, requiring them to provide information about their activities – such as providing us lists of everyone who has used their schemes.
Made more than 20 referrals to the Advertising Standards Authority resulting in more than 30 websites and adverts being taken down or amended, protecting people from misleading marketing.
Had nearly 600,000 views of our online help and scheme disclosure webpages, which enable people to spot avoidance schemes and steer clear.
Written to 42,000 people who we think have newly become involved in an avoidance scheme – warning them and telling them what they need to do to get out of tax avoidance. We contact people within two months of learning that they have started using an avoidance scheme.

We’re ramping up activity: since September 2023, we have issued over £40 million of penalties to organisations promoting tax avoidance who have failed to comply with the requirements of a stop notice.

Criminal investigations and prosecutions

While the promotion of tax avoidance schemes is not in itself a crime under UK law, where an avoidance scheme involves fraud or other criminal offences, we use the full range of criminal investigation powers available to us to tackle those who promote or enable the scheme.

Since 2016, more than 20 individuals have been convicted of offences relating to arrangements which have been promoted as tax avoidance. These criminals have received a total of 100 years of custodial sentences.

Next steps

There is still more work to do: promoters of tax avoidance are constantly changing their methods in attempts to dodge HMRC’s efforts to tackle them. Most companies selling avoidance are short-lived, typically operating for no more than two years before HMRC action forces them to close down.

New rules came into effect in February 2024 making it a criminal offence to promote tax avoidance schemes after we issue a stop notice.

Further information