CPD: Personal tax

The latest edition of Newsbrief counts as 1 hour of structured CPD and covers the regulatory and marketplace changes that took place during August 2014. Visit the Money Marketing CPD Centre to answer 10 multiple choice questions and complete this CPD activity. Just click into your CPD Plan and you’ll find each month’s marketplace changes round-up in your activity list.

HMRC jumped the gun somewhat. A couple of days before the Finance Bill 2014 received Royal Assent it published a list of nearly 1,200 tax avoidance schemes whose users would be the first subjected to the Finance Act’s accelerated payments rules. Those rules effectively allow HMRC to demand payment of tax on any scheme that is in dispute within 90 days of issuing a Notice to Pay.

The list consisted solely of scheme reference numbers (SRNs) given under the Disclosure of Tax Avoidance Schemes (DOTAS) regime. The exotic names (Eclipse, Icebreaker, etc) that had garnered so many unflattering press headlines were absent, because HMRC does not know them all.

Accompanying the list was a statement that HMRC would be working through the SRNs over about the next 20 months, so it may not be until March 2016 that some people first hear from HMRC. The number of schemes on the list, and the fact that very few schemes have been registered in the past few years, suggests that HMRC is going right the way back to schemes registered around the start of DOTAS, in August 2004.

HMRC reckons that there are 33,000 individuals and 10,000 companies that have used the schemes on its list and that the total revenue at stake is more than £7bn. How much of that will actually be forthcoming is unclear. Reports suggest that the gearing common in many schemes can lead to HMRC seeking tax payments that are considerably more than the original ‘investment’.

For now, the accelerated payments procedure does not apply to NIC avoidance schemes (an important point for EBTs and EFRBS), but the National Insurance Contributions Bill 2014 (currently before Parliament) will soon remove this exemption.

The prolonged timescale for issuing Notices to Pay is a reminder that in the world of aggressive avoidance, nothing happens quickly.