HMRC has recently published proposed new plans to facilitate the accelerated payment of tax in respect of tax avoidance schemes. This has sent a clear message to those involved in tax avoidance that they will be targeted.
One example relates to those that have engaged in past or present DOTAS registered schemes. Where tax arrangements are under enquiry, individuals and companies will be asked to pay the tax due as if the planning had not been undertaken. This would be with the prospect of HMRC repaying the money if its challenge is unsuccessful. This approach would also apply to arrangements that HMRC consider caught by the new GAAR.
Many individuals and companies could find themselves facing significant tax demands and needing advice in terms of potential bankruptcy or insolvency. This will encourage taxpayers to try and bring enquiries – many of which have been ongoing for years – to a conclusion, either by settling with HMRC or taking it to a tax tribunal.
HMRC's intention is to implement this new legislation in the upcoming Finance Act in the hope that it will deter those considering entering into tax avoidance arrangements and speed up the enquiry process into current schemes. With 65,000 tax scheme users currently waiting for resolution to HMRC enquiries, this will be a significant step change in that process for HMRC and users alike.
Anyone engaged in these types of tax avoidance schemes should consider their options and seek professional advice.
We have taken great care to ensure the accuracy of this newsletter. However, the newsletter is written in general terms and you are strongly recommended to seek specific advice before taking any action based on the information it contains. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication.
