HMRC has published a list of avoidance schemes reference numbers whose users may be issued with an accelerated payment notice (APN). Over 1,200 schemes are currently listed, and the next update of the list will be published in October 2014. HMRC expects to issue notices to 43,000 taxpayers, comprising 33,000 individuals and 10,000 businesses, totalling £7bn worth of disputed tax.
The move has prompted a flurry of comment from the profession. Phil Berwick, partner and head of contentious tax at law firm Irwin Mitchell said: ‘It is interesting that the reference numbers have been issued before royal assent has been granted, and also in advance of HMRC publishing its guidance in relation to how the new rules will be implemented and what action they will take. Investors should take professional advice to ensure that HMRC are entitled to issue the notice; for example, if HMRC has failed to issue a valid enquiry notice, it may be prevented from issuing the payment demand. Each case must be assessed on its own merits, and taxpayers should not automatically assume that HMRC is correct.’
Dawn Register, partner in the tax investigations team at BDO, commented: ‘The publication of the tax avoidance scheme reference list will see thousands of individuals and businesses receiving the unwanted news, over the next few weeks, that they need to pay back tax owed within 90 days ... Clearly the overall objective of this move is to increase tax revenues for the Treasury as well as forcing taxpayers to deal with long-running disputes. This move is a clear message that it is not the “bank of HMRC”.’
Jason Collins, head of tax at Pinsent Masons, warned that it is ‘not just high net worth individuals and celebrities’ who are affected. ‘There are a lot of modestly well off self-employed contractors who have been sold tax planning schemes that will face these demands for money. HMRC needs to take into account the fact that many of these individuals will not have fully realised what they were buying into’, he said, adding: ‘HMRC needs to consider offering beneficial settlement terms in order to bring this tsunami of litigation to an end.’
Michael Avient, a partner specialising in tax investigations at UHY Hacker Young, explained: ‘Just because the scheme’s DOTAS number is in the list doesn’t mean that penalties are inevitable.’
Martin Taylor, head of client relations at Rebus Group, added: ‘We believe there will be many calls for a judicial review of HMRC powers and a repeat of the – in many cases valid – criticism from a wide range of professional legal, accounting and tax bodies. However, we are equally confident they will make little difference to the rolling program of 43,000 demands due over the next 18 months. For investors receiving these notices, taking action earlier rather than later is always recommended.’
HMRC has published a list of avoidance schemes reference numbers whose users may be issued with an accelerated payment notice (APN). Over 1,200 schemes are currently listed, and the next update of the list will be published in October 2014. HMRC expects to issue notices to 43,000 taxpayers, comprising 33,000 individuals and 10,000 businesses, totalling £7bn worth of disputed tax.
The move has prompted a flurry of comment from the profession. Phil Berwick, partner and head of contentious tax at law firm Irwin Mitchell said: ‘It is interesting that the reference numbers have been issued before royal assent has been granted, and also in advance of HMRC publishing its guidance in relation to how the new rules will be implemented and what action they will take. Investors should take professional advice to ensure that HMRC are entitled to issue the notice; for example, if HMRC has failed to issue a valid enquiry notice, it may be prevented from issuing the payment demand. Each case must be assessed on its own merits, and taxpayers should not automatically assume that HMRC is correct.’
Dawn Register, partner in the tax investigations team at BDO, commented: ‘The publication of the tax avoidance scheme reference list will see thousands of individuals and businesses receiving the unwanted news, over the next few weeks, that they need to pay back tax owed within 90 days ... Clearly the overall objective of this move is to increase tax revenues for the Treasury as well as forcing taxpayers to deal with long-running disputes. This move is a clear message that it is not the “bank of HMRC”.’
Jason Collins, head of tax at Pinsent Masons, warned that it is ‘not just high net worth individuals and celebrities’ who are affected. ‘There are a lot of modestly well off self-employed contractors who have been sold tax planning schemes that will face these demands for money. HMRC needs to take into account the fact that many of these individuals will not have fully realised what they were buying into’, he said, adding: ‘HMRC needs to consider offering beneficial settlement terms in order to bring this tsunami of litigation to an end.’
Michael Avient, a partner specialising in tax investigations at UHY Hacker Young, explained: ‘Just because the scheme’s DOTAS number is in the list doesn’t mean that penalties are inevitable.’
Martin Taylor, head of client relations at Rebus Group, added: ‘We believe there will be many calls for a judicial review of HMRC powers and a repeat of the – in many cases valid – criticism from a wide range of professional legal, accounting and tax bodies. However, we are equally confident they will make little difference to the rolling program of 43,000 demands due over the next 18 months. For investors receiving these notices, taking action earlier rather than later is always recommended.’
