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HMRC reveals list of tax avoidance schemes facing payment demands

HM Revenue and Customs has published a list of tax avoidance schemes which may be subject to demands to pay tax within 90 days.

When the 2014 Finance Bill is given Royal Assent this month, HMRC will begin issuing “accelerated payment notices” to tens of thousands of individuals in a bid to seize £7bn in disputed tax.

The notices can be issued to anyone who has used an avoidance scheme into which HMRC has an open inquiry.

Today HMRC has published a list of 1,172 schemes to which the notices may apply. It says this is to help users of avoidance schemes and their advisers prepare for the payment notices.

HMRC will begin issuing notices from August and will send them over a period of 20 months.

The list contains scheme reference numbers rather than scheme names, as taxpayers must use SRNs to identify their use of an avoidance scheme when completing their self-assessment return.

Treasury financial secretary David Gauke says: “Accelerated payments will tackle the small minority of taxpayers who are currently able to put off paying tax, sometimes for several years. This will put them on the same footing as the majority of taxpayers who pay their tax up front.”

Previously, if HMRC ordered an individual to pay tax which it believes had been unfairly claimed in tax relief, the individual could appeal the decision through a tribunal and would not have to pay until HMRC won through the courts.

Under the payment notices regime, an individual can still appeal a decision through a tribunal but must pay the tax upfront and will only be refunded, with interest, if they win.

Experts have warned the Revenue’s new powers could trigger a wave of misselling complaints against advisers.

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Comments

There are 5 comments at the moment, we would love to hear your opinion too.

  1. I wonder how many of these scheme manufacturers who claimed to have these schemes signed off by the Revenue or checked by QC will now be running for cover.

    Although tax advice is not regulated I wonder how many claims there will be to the FSCS because the firms that gave the advice were regulated. As usual it is the people left in the industry that pay for the mistakes of the greedy few.

  2. Can successful claims be made to the FSCS if the firm was NOT regulated ?

  3. That noise is the sound of hundreds of IFAs running to read the small print to check if they can get out of paying compensation to the suckers (clients) whom they advised to buy into these schemes.

  4. @Bones : no they can’t – but clearly where an adviser ended up giving a personal recommendation to a retail customer to invest in one of these schemes, then I suspect it will not be sufficient to hide behind the “tax advice” exclusion and the case will be investigated as an investment advice complaint / claim … sadly though, the tax advice could well mean that accountants for example giving the same advice (or their clients) would not be under the same regulatory / compensation regime … which does seem somewhat unfair – to the clients and to the adviser community as a whole …

  5. Gillian, what about the claims that are being made to the FSCS where the advisers have given advice on unregulated products? A good example of this is Harlequin overseas property. Although the product itself is unregulated there are successful claim going through at present through the FSCS because the adviser firm was regulated.

    Personally I think there needs to be clarification on this fact as all too often it is the advisers left in the industry that end up paying for the mistakes of those that have left and just as the regulator was very slow to act on Harlequin, the Inland Revenue has been extremely slow in acting against these schemes and the promoters.

    I have no problem with tax planning but when it looks too good to be true, it often is!

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