Cycling champion Bradley Wiggins is the latest celebrity to withdraw from a tax management scheme after criticism in the media.
Wiggins, one of the British heroes of the London Olympics 2012 and winner of the gruelling Tour de France has announced he has pulled out of a deal put forward by his financial advisers.
Wiggins had invested in Twofold First Services, reportedly owned by a company based in the Cayman Islands that created ‘abusive and artificial’ farming tax credits, according to the UK Treasury.
“I had a small investment in Twofold, following guidance from my professional advisers,” said Wiggins.
“I had, however, claimed no tax relief of any amount in regard to this investment. Given the concerns raised about it, I have now instructed my advisers to withdraw me from the scheme with immediate effect.”
Tax confusion
Meanwhile, thousands of taxpayers who hid their assets in Swiss bank accounts will not face prosecution, says HM Revenue & Customs.
The French government passed a list of 6,000 British taxpayers with accounts with HSBC Switzerland.
Just one person faced charges and HMRC has pledged to keep the identities of the rest concealed – providing they pay an agreed amount in tax and penalties.
Many taxpayers must be confused over their standing with HMRC, as celebrities investing in tax management schemes are regularly outed, like Bradley Wiggins and TV comic Jimmy Carr, who was castigated for putting money in to a Channel Islands scheme.
Other celebrities and sports stars are also facing similar naming and shaming without any real evidence , while those who are proved to have broken the law, like many of the HSBC customers, are not prosecuted.
Umbrella companies and tax
At the same time, many government departments and councils have colluded with recruitment agencies to avoid their legal obligations as employers by taking on staff from umbrella companies.
HMRC has already closed many of these companies which employ contractors in many sectors who would otherwise be considered as self-employed.
Recruitment companies help employers sidestep their obligations under European and British law because contractors working for umbrella companies have no paid sick leave, holiday leave or maternity/paternity rights and cannot access grievance procedures if they have issues at work.
Working for an umbrella company is not illegal and the companies nor their employees do nothing wrong – but some of the tax and employment rights activities they undertake are morally questionable.
