HMRC Clampdown on Tax Avoidance

Following an announcement earlier this year that HMRC were proposing to introduce new legislation to collect the tax sheltered under various tax avoidance scheme by the issuing of Advanced Payment Notices or Follower Notices where schemes have either previously been registered under the Disclosure of Tax Avoidance Schemes (DOTAS) or are the subject of a challenge under the General Anti Avoidance Rules (GAAR), the relevant clauses in the 2014 Finance Bill have now been debated and are now widely expected to be introduced later this month.

HMRC have just published a list of the arrangements that they expect to apply these new rules to. It is understood that anyone who entered into such arrangements and have an open enquiry or an appeal in progress can expect to receive the Advanced Payment Notice from August onwards. It could take HMRC up to 20 months to issue all the notices based on the current disclosure list. Currently there are approximately 33,000 taxpayers who are likely to receive one of these notices. It is important to note that a payment under such a notice is merely a payment on account and not a determination of the tax liability

Anyone who receives such a notice will have up to 90 days to make the payment before penalties will be applied. Andy McQuillan, Head of Tax at Dains LLP recommends that if you receive such a notice you should take immediate professional advice as there is a short window of opportunity to appeal against the amount being claimed and for those who are unable to pay the demand to enter into negotiations with HMRC for a time to pay arrangement.

If you are likely to receive an Advanced Payment Notice you should contact your usual Dains Client Service Team or our Specialist Tax Avoidance Team on taxavoidance@dains.com.