The recent Accelerated Payments notices have been very successful, say HMRC, allowing them to collect over £2 billion from tax avoiders. So beware…

Up-Front Payment

The notices, which were introduced under the Finance Act 2014 and National Insurance Contributions Act 2015, apply in cases where avoidance schemes come under the Disclosure of Tax Avoidance Schemes rules orthe General Anti-Abuse Rule, or if the scheme you’re using is similar to a scheme that’s already been defeated in court.

If you receive an Accelerated Payments notice, you’ll be liable to pay any disputed tax amounts up front while the tax investigation is still ongoing. Previously, you would have had the luxury of delaying payment until the investigation was concluded. Not anymore!

However, as HMRC win 80% of such cases in court, Accelerated Payments notices are merely ensuring that the money is now more often where it should be have been from the start – in HMRC’s pockets rather than those of the tax avoiders.

Jennie Granger, Director General for Enforcement and Compliance, HMRC, said: “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 that people litigate, with many more settling before litigation.”

Once you receive an Accelerated Payments notice, you have 90 days to pay or make representations to HMRC if you consider the notice is incorrect in any way, and you retain full appeal rights against the substantive tax liability. If the case is taken to litigation and the you ultimately win, HMRC undertake to repay the tax back to you with interest.

Accelerated Payments is ‘A Game Changer’

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 says it 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.

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Karl Bilby

We work very closely with our expert accountants to bring you the latest factually correct tax and accounting news. We also enjoy writing about small business news that we hope you find useful!

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