The figure is equal to almost 3p on the basic rate of income tax.

In a bid to tackle the issue, the HMRC has set up a special unit that will national insurance uk
such schemes.

But those accused of tax avoidance say they are doing nothing illegal and argue they are merely better at using the tax system than the HMRC is.

BBC Two’s The Money Programme reports that the owner of BHS, Philip Green, and his family saved themselves nearly 300m last year by living partly in Monaco, where residents do not have to pay income tax.

Offshore trusts

The programme also reports that some City firms had cut their National Insurance bill by paying staff bonuses in gold, gems and antiques rather than cash.

For HM Revenue and Customs, the latest wave of tax avoidance schemes was the last straw BBC’s The Money Programme explores tax avoidance schemes

And once the HMRC clamped down on such payments, accountants set up trust funds to cut firms’ tax bills.

Under this type of arrangement salaries and bonuses are paid into an offshore trust.

The trust then lends the cash, often interest-free, to the employee. There is no tax to pay on a loan.

In addition, jackson national life insurance co
firms are selling losses to clients, which are then used to offset against income.

When the employee’s tax return is filed the losses, which are artificial, are used to wipe out real income earned, thereby cutting the amount of tax owed.

The Money Programme reported that these schemes cost the government up to 2.5bn in tax revenue.

“If people are behaving dishonestly here, then an issue can easily slip across from being a matter of legal avoidance, into one of dishonesty and evasion and could become a criminal case for us,” said Dave Hartnett, director-general of the HMRC.

The focus of this programme on exotic tax avoidance schemes is blowing things out of all proportion Chas Roy-Chowdhury, ACCA

New powers

In 2004 HMRC was granted new tax avoidance powers by Chancellor Gordon Brown.

The new powers mean that accountancy firms have to report new tax avoidance schemes to HMRC before ohio national life insurance company them to clients.

According to an accountancy industry body, HMRC watchfulness - combined with improved self regulation - is drawing the curtain on many tax avoidance schemes.

“The focus of this programme on exotic tax avoidance schemes is blowing things out of all proportion,” Chas Roy-Chowdhury, head of taxation at the Association of Certified Chartered American national insurance company
(ACCA), told BBC News.

“The types of schemes described have now largely disappeared and mainstream accountancy firms follow strict regimes and ethical guidelines.”