Sunday, January 17, 2010

Tax and financial advisers in court again re 'failed' tax scheme

Tomorrow, January 18th is the date on which Blackfriars Crown Court will pay host to pleas and a case management hearing re an apparent prosecution about which I have written on this blog before (see below).

Two tax advisers, their wives and a financial adviser are allegedly being prosecuted for cheating the public revenue through their involvement in connection with a tax scheme, “which took advantage of the legislation providing tax relief on the donations of share to charities". They were first interviewed by HMRC in 2006 in relation to the scheme which was being promoted as recently as 2004.

Reports of the case suggest that:
  • Roy Faichney and David Perrin, two tax advisers, (who were not qualified accountants but who ran the tax practice at Vantis accountants) are accused of setting up a sophisticated scheme which involved hundreds of clients.
  • Vikash Kulkar, a financial adviser, helped attract people to the scheme.
  • The tax advisers' wives are also accused of involvement in their husbands' dealings at the accountancy firm.
Despite the reports, setting up such schemes is not illegal and, as I have said before, I'm sure that senior tax Counsel had endorsed the scheme in question before it was promoted to, apparently, "an Oscar winning film executive, a celebrity psychiatrist, senior City bankers, top barristers and company directors." As such the advisers were doing nothing different to many other promoters of aggressive tax planning schemes. And was the financial adviser any different to other such advisers who actively promote tax schemes to their clients?

I have explained my views about this case before (see below) and remain confused as to what really prompted what seems to me to be a very heavy handed approach by HMRC. And I say that as someone who is no fan of structured avoidance schemes. But equally I am no fan of discriminatory persecution of professional advisers.

Previous relevant posts:


  1. IIRC, David Perrin is indeed a chartered accountant.

    And, for the sake of transparency, let's not overlook that he worked at the same firm as you, Mark (though not, for the avoidance of doubt, Vantis, where all the present chicanery took place in a clearly far more tolerant control enviornment).

  2. My understanding is that there is more to this case than whether the tax legislation allowed it.

    Given that five individuals are undergoing criminal prosecution at present and the extent that their futures will be determined by the outcome of this case is this sort of debate fair to them at this time?

  3. Thanks to both Anonymous commentators.

    1 - I don't know what IIRC means. David is NOT a Chartered Accountant, nor, so far as I can recall, does he have any formal accountancy qualification - although this isn't really relevant. I referenced my knowledge of both tax advisers in an earlier post referenced above.

    2 - I agree that there ought to be more to this case than whether the tax legislation allowed it. Again, I commented on this in an earlier post referenced above.

  4. I think IIRC means "if I remember correctly". According to his LinkedIn profile David is a Chartered Tax Adviser and member of STEP.

    Like Mark, I am puzzled by this case, and for the benefit of the first Anonymous, yes, I knew both Roy and David in a former life.

  5. Acting as devil's advocate, is not the argument that using a series of transaction to increase and then reduce the value of the gifted assets is fraud? If I did the same to a friend (selling an asset at an inflated value and then, before they could dispose of it, arranging for that asset to be worthless) would that be fraud? I think yes and doing the same to the Exchequer seems worryingly short of morality if nothing else.

  6. We don't know what the argument is that HMRC are running here.

    I have since learned that the hearing to which those listed in my blog were "summoned to appear" has now been postponed until March. It also seems that, contrary to press reports, they have NOT been arrested or prosecuted.

    When the hearing eventually takes place I understand that they will each either be charged or the case against them will be dismissed.

  7. When I am wrong, I admit it.
    A postscript to the above post, in the light of the successful prosecution of Messrs Perrin and Faichney: