HMRC brings in record £1 billion from avoidance crackdown

15 September 2015

Accelerated Payments were introduced in Finance Act 2014 and National Insurance Contributions Act 2015 and 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 and once received, they have 90 days to pay or make representations to HMRC if they consider the notice is incorrect. Taxpayers retain full appeal rights against the substantive tax liability and If the case is taken to litigation and the taxpayer ultimately wins, HMRC will repay the tax with interest.

When announcing the first £1 billion in tax payments, 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.

HMRC’s ‘Spotlights’ features tax avoidance schemes which HMRC believes are live and being widely offered to help those using them to avoid tax.