Spotlight 68. HMRC’s tax avoidance Spotlight 68 focuses on a tax scheme being marketed as a means for directors and others to extract tax and NI-free income from their companies (see Further information ). HMRC says it will challenge any employer using the scheme.
What to watch for. Broadly, the scheme involves the issue of credit cards which directors or employees use to purchase marketing services provided indirectly by the card company. Loyalty points, which aren’t taxable, worth up to around 80% of the money spent are awarded and are then converted to a cash value which the director, employee or someone else can use to buy goods and services for themselves.
Watch out for tax avoidance schemes which involve the issue of credit cards that award disproportionately generous loyalty points for specified purchases. HMRC will investigate any company using the scheme.
Further information
This article has been reproduced by kind permission of Indicator – FL Memo Ltd. For details of their tax-saving products please visit www.indicator-flm.co.uk or call 01233 653500.