According to HMRC, over £2 billion has been collected from users of tax avoidance schemes as a result of new government measures to collect disputed tax upfront.
New Accelerated Payments notices mean that users of tax avoidance schemes pay disputed tax up-front while their tax-affairs are investigated, instead of waiting until they are concluded. Given HMRC wins 80% of cases that go to court, this eliminates the financial advantage that tax avoiders previously enjoyed.
The Financial Secretary to the Treasury, David Gauke, said:
We will not tolerate tax avoidance and Accelerated Payments has been a real game changer.
HMRC already wins the vast majority of cases that go to court and now HMRC has taken more than £2 billion from tax-avoiders who would have otherwise benefitted from that cash while they were being investigated.
It should be absolutely clear to anyone who is tempted by these schemes that tax-avoidance does not pay.
HMRC is now issuing over 3,000 Accelerated Payment Notices a month, and has issued over 41,000 notices since Accelerated Payments were introduced. By the end of 2016, HMRC expects to have completed issuing notices, bringing forward over £5 billion in payments for the Exchequer by March 2020.
Accelerated payments were introduced in the Finance Act 2014 and National Insurance Contributions Act 2015 and they apply where avoidance schemes are subject to the Disclosure of Tax Avoidance Schemes rules or the General Anti-Abuse Rule, or where they are similar to a scheme that’s already been defeated in the courts.
An accelerated payment notice is issued to the taxpayer to collect the outstanding tax. Once they receive the notice, they have 90 days to pay or make representations to HMRC if they consider the notice is incorrect – either if the conditions are not met or the amount is wrong.
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