There are similar things in the UK, and if an avoidance scheme is found to be non-compliant after the fact, you can suddenly find yourself oweing a lot of back

There are similar things in the UK, and if an avoidance scheme is found to be non-compliant after the fact, you can suddenly find yourself oweing a lot of back taxes and penalties. For instance there are rules about how much company turnover needs to be before you have to start collecting VAT. If you start a second company and start funneling transactions through that to avoid this threshold, your little 'hack' is illegal, despite it being perfectly legal to own and run two companies. As a contractor, I had several schemes attempt to woo me to use them, with ludicrous promises like "Keep 92% of your gross earnings!". I always said no thanks. Now I read on contractor forums as people panic that HMRC has evaluated their magic tax avoidance strategy and they want back taxes plus interest and I have no sympathy - they were high earners and they were trying to avoid contributing their share. The worst are the loan schemes - You give all your earnings to an offshore entity, and it gives 95% back as an interest free 'loan' that is never expected to be repaid. No tax! W00t! But now not only are the tax authorities interested in you, but when some of these schemes wind down an external liquidator takes a look at the books and decides "Hey, there's all these loans outstanding, we need to recover these funds for shareholders!". Ruh-roh.