The revenue office has recently won an important court case against people who are avoiding stamp duty. It is estimated that the court case is going to mean that they are able to bring in around £170 million extra in tax every year.
A report in the Financial Times has recently shown that a tribunal has closed a loophole in the system which is going to mean that significant tax avoidance is going to become impossible. One of the main components of the case was a business park which had been purchased for around £7 million, and it managed to relieve itself of stamp duty tax through a clever loophole.
The system is called subscale relief, and it is often used legitimately by intermediaries. This allows them to not pay stamp duty twice over, such as for when they purchase a house, and then immediately sell it on. Some people have been abusing the system however to not pay stamp duty in an illegitimate way.
Simon Yeo is a stamp duty specialist with the major accounting company KPMG and he has stated, “This is certainly a breakthrough case, and it is going to make people think twice about using this loophole in order to avoid the stamp duty tax. What this case proves is that the revenue office is willing to take people to court, and it is clearly able to win.”
The head of business tax for the revenue office is Jim Harra and he has stated, “This is great news for most taxpayers in the UK, who instead of trying to avoid their taxes, pay them honestly. This shows that the courts will support us when we seek people who are avoiding tax, and it is great news that people are no longer going to be able to avoid tax through this sneaky loophole.”