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Accelerated payments net £2bn for HMRC

The tax authority is currently issuing over 3,000 accelerated payment notices a month

9 February 2016

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The treasury has taken more than £2bn from tax payers who are engaged in disputed tax avoidance schemes.

HMRC expects to be able to take more than £5bn by 2020 through the accelerated payment notice (APN) regime. Accelerated payments were introduced through the Finance Act 2014.

They can be issued where a tax planning scheme is subject to the disclosure of tax avoidance schemes (DOTAS) rules, the general anti-abuse rules (GAAR), or if the scheme is similar to another scheme that has already been successfully challenged.

'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,' said David Gauke, the financial secretary to the treasury.

'It should be absolutely clear to anyone who is tempted by these schemes that tax-avoidance does not pay.'

154 investors in tax planning schemes unsuccessfully challenged the APN regime in 2015, on the grounds that they are unreasonable, breached natural justice and amounted to an abuse of the EU Convention of Human Rights to a fair trial and protection of property.

The High Court dismissed their claims on all accounts, with Mrs Justice Simler asserting: 'There has been no breach of the claimants' procedural or substantive legitimate expectations. The decision to give PPNs [payment partner notice] was neither unreasonable nor irrational. It represented a lawful exercise of the statutory discretion conferred by FA [Finance Act] 2014.'

Emboldened by the support from the courts, Jennie Granger, HMRC's director general for enforcement and compliance, has warned tax payers that the treasury is no longer playing catch-up and will continue to exercise its new powers.

'Accelerated payments continue to turn the tables on individuals looking to avoid paying their fair share of tax. Those who take part in tax avoidance now have to pay up-front and dispute later. It really is time to get out of avoidance - HMRC wins the vast majority of cases [80 per cent] that people litigate, with many more settling before litigation,' she said.

'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 £5bn in payments for the exchequer by March 2020.'


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Tax & Wealth structuring