HMRC nets £1bn from tax avoidance crackdown
HM Revenues & Customs (HMRC) has collected £1 billion from users of tax avoidance schemes after introducing new rules to collect disputed tax upfront.
The government introduced the Accelerated Payments regime last year to change the economics of avoidance where disputed tax is paid upfront by avoidance scheme users, who can later claim this money back if successful in court.
Under the rules an Accelerated Payment Notice is issued to the taxpayer to collect the outstanding tax. Once the notice is received they have 90 days to pay, or prove the notice was served incorrectly.
The Accelerated Payments Regime was introduced in the Finance Act 2014 and according to HMRC, more than 24,000 notices have been issued since August 2014.
By the end of 2016, HMRC expects to have issued around 64,000 notices, raising £5.5 billion by March 2020.
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 £1 billion received in Accelerated Payments shows that we are turning the tables on those looking to avoid paying their fair share.’
HMRC director general for enforcement and compliance, Jennie Granger, added: ‘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.’
