HMRC has collected £1 billion in tax payments from users of tax avoidance schemes as a result of the government’s new rules to collect disputed tax upfront, the Financial Secretary to the Treasury, David Gauke, announced today.
The Government introduced Accelerated Payments last year to radically change the economics of avoidance. Under these rules, disputed tax is paid up front by avoidance scheme users.
Financial Secretary to the Treasury David Gauke said:
The Government will not tolerate tax avoidance and Accelerated Payments has been a real game changer.
It is no longer possible for these individuals to avoid tax and sit on the money while their affairs are investigated. This first £1bn received in Accelerated Payments shows that we are turning the tables on those looking to avoid paying their fair share.
Jennie Granger, Director General for Enforcement and Compliance, HMRC, said:
Tax avoiders are running out of options. People now have to pay upfront and dispute later. We are winning around 80% of avoidance cases that people litigate. And many more are settling before litigation.
More than 25,000 notices to pay disputed tax have been issued by HMRC since August 2014. By the end of 2016, HMRC expect to have completed issuing around 64,000 bringing forward £5.5 billion in payments for the Exchequer by March 2020.
Notes for Editors
- Accelerated Payments were introduced in Finance Act 2014 and National Insurance Contributions Act 2015.
- 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 has 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.
- Taxpayers retain full appeal rights against the substantive tax liability. If the case is taken to litigation and the taxpayer ultimately wins, HMRC will repay the tax with interest.
- Anyone wishing to settle an avoidance issue should contact HMRC immediately on 03000 530435.
- On 31 July, the High Court comprehensively rejected a Judicial Review application to have Accelerated Payments ruled unlawful.
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