What are HMRC Spotlights?

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The following gives a brief summary of something that most people, including many accountants and tax advisors, will know very little about: HMRC “Spotlights”!

Spotlights have been around for some time and are all about tax avoidance. According to HMRC “it has a ‘consumer protection’ role in helping you to avoid unwittingly entering into arrangements that HM Revenue & Customs (HMRC) are likely to see as tax avoidance”.

Spotlights identify the types of arrangements which HMRC are likely to challenge and they aim to do this by helping taxpayers to understand how they distinguish between artificial avoidance schemes and ordinary sensible tax planning. There is, however, no explanation by HMRC as to what they mean by “ordinary” tax planning.