HMRC rakes in cash from new powers to scrutinise tax schemes

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June 25th 2022
Tax Week 12
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HMRC rakes in cash from new powers to scrutinise tax schemes

32 million pounds taken so far from Accelerated Payment powers where tax avoidance schemes pay upfront

Under new powers to take disputed tax from avoidance schemes upfront (Accelerated Payments), HMRC has clawed £32 million from over 30 scheme participants.

Part of the 2014 amendments to the Finance Act, HMRC is able to act where certain tax avoidance schemes are marked as such by the Disclosure of Tax Avoidance Schemes rules. Additionally they can also request payments if the scheme has already been ruled illegal in the courts or is classified as under the GAAR rule.

Scheme participants are asked to provide the full tax they would avoid upfront. If the scheme is deemed legal, they are provided relief later.

Accelerated Payment notices are sent out requiring the users to pay within 90 days the disputed amounts. So far 1,750 such notices have been sent, worth £400 million to the treasury.

The collection amount is just a fraction of the total amount expected as the 90 day limit has not yet been reached on the majority. Those who do not pay will be subject to the usual HMRC collection procedures.

Interestingly, from January 2015 2,500 of these notices will be going out every month. This is described as part of HMRC's objective to make it uneconomical to join complicated schemes to save tax.

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