Payment policy nets more than £4bn from tax avoiders

27 July 2017


HMRC has collected more than £4 billion through the ‘pay now, dispute later’ rules for people who have used a tax avoidance scheme.

More than 75,000 accelerated payment notices (APNs) have been issued to people under enquiry for tax avoidance since rules were introduced in 2014. And HMRC has now issued APNs on all the schemes that were already under investigation when the new rules came in.

Also, last week, the High Court confirmed that HMRC had won another Judicial Review of the APN regime – the department has now won six out of six Judicial Reviews.

HMRC collected more than £3.6m per day by requiring people in avoidance schemes to pay their disputed tax upfront. The average bill for large companies trying to avoid tax is £6 million, while for individuals and small corporates it’s £74,000. In comparison, the worker on an average salary who doesn’t try to avoid tax pays less than £6,000 in National Insurance and Income Tax in a year.

Accelerated payments were introduced in the 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’s already been defeated in the courts. If a taxpayer has used a scheme that is the same as or very similar to a scheme that HMRC has defeated in court, HMRC can issue a Follower Notice (FN) requesting settlement. If the taxpayer does not settle their dispute and HMRC wins a court case against them, they will face a substantial penalty.

Anyone wishing to settle an avoidance issue should contact HMRC immediately on 03000 530 435.