Fine wine tax loophole closing

Inland Revenue gets mean

FINE WINES and other luxury goods are the target of an Inland Revenue crackdown on tax avoidance.

"Big bonuses in the City are sometimes paid in the form of luxury goods, such as fine wines, in an effort to avoid paying the tax or National Insurance that would be due if the bonus had been paid in cash," says Patrick O’Brian at the Inland Revenue.

"This isn’t a new move for us but part of our ongoing business of trying to stop tax avoidance."

Oliver Hartley, sales director at Justerini & Brooks agrees: "We stopped supplying wines to customers for this purpose about three years ago, when our customers came to us and said that the Inland Revenue had told them it must stop. 

Since then we’ve not sold any wine for this purpose, certainly not as far as I’m aware. I don’t think this will have much of an effect on the industry at all."

The Inland Revenue says that there is no defining criteria placed on what it would and wouldn’t consider to be a "fine wine" but that it investigates each case individually.

Of all the cases prosecuted under this legislation so far, the Inland Revenue says it has lost only one.