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Isle of Man-based firm fined £150k by HMRC in UK tax investigation

28/03/2022

A UK tribunal fines an Isle of Man-based firm AML Tax (UK) Limited £150,000 for failing to hand over records needed to calculate its tax bills for 2014 and 2015.

BBC NEWS

HM Revenue and Customs (HMRC) said the firm had carried out a "sustained campaign of non-compliance".

It said the firm's bill for the period was estimated to be more than £3m.

The company is one of a number of associated companies which share an office at the same address on Finch Road in Douglas, and is part of the Knox Group of companies owned by billionaire businessman and island resident Doug Barrowman.

'Obstructive conduct'

HMRC has been investigating the firm's tax returns for the period, and has already imposed £9,000 of penalties on the firm for not providing the information needed.

In its judgement, the Upper Tribunal in the UK's Tax and Chancery Chamber said the firm was "involved in providing services in connection with various tax avoidance structures to UK resident taxpayers".

Judges said AML director Arthur Lancaster had been "evasive" in his evidence to the tribunal, which included statements that were "confused, lacking in candour, in some respects incorrect and littered with inconsistencies".

HMRC counter avoidance director Mary Aiston said she was "delighted their obstructive conduct has been penalised" after a "series of tactics were used" to frustrate the investigation.

UK tax authorities were "determined to drive promoters of tax avoidance out of business", she added.

https://www.bbc.co.uk/news/world-europe-isle-of-man-60874341

HMRC TRIBUNAL

HM Revenue & Customs (“HMRC”) pursuant to paragraph 50 Schedule 36 Finance Act 2008 (“Schedule 36”) for an additional penalty to be imposed on AML Tax (UK) Limited (“AML”). HMRC allege that AML has failed to comply with an information notice under Schedule 36 issued to AML and that the conditions for the imposition of an additional penalty are satisfied.

AML is a UK limited company which was incorporated on 9 December 2009. The director is Mr Arthur Lancaster, a chartered accountant and chartered tax adviser specialising in trusts and private client matters. An issue arises as to the activities of AML.

At this stage we shall simply say that it has acted in relation to certain tax avoidance schemes utilised by UK contractors and sub-contractors. It is part of an informal group of companies based in the Isle of Man known as the Knox Group.

HMRC have opened enquiries into the company tax returns of AML for accounting periods ending 31 December 2014 and 31 December 2015 pursuant to paragraph 24(1)

Schedule 18 Finance Act 1998 (“FA 1998”). Mr James Preston was the HMRC officer with conduct of the enquiries until his retirement in September 2020.

The enquiry into the 2015 return commenced on 5 December 2017 and included a request for AML to provide certain company records.

AML did not produce those records and on 28 February 2018 HMRC issued an information notice under Schedule 36 requiring production of the records (“the Information Notice”). Again, AML failed to produce the records.

https://assets.publishing.service.gov.uk/media/622f6fa8e90e070ed5aaedf2/HMRC_v_AML_Tax__UK__Limited_UT_2019_0045_Decision.pdf

TAX FINES UNITED KINGDOM