Accelerated Payments: 90 days to pay

On 15 July HMRC released a list of tax avoidance schemes whose users it may require to make an ‘accelerated payment’ of tax under the new legislation contained in Part 4 of Finance Bill 2014, which received Royal Assent on 17 July 2014.

This legislation seeks to operate such that the taxpayer has 90 days to settle the liability determined by HMRC after which taxpayers will have to litigate to reclaim the funds.

 

When a promoter notifies HMRC under the rules for disclosing a tax avoidance scheme (‘DOTAS’) a scheme reference number (‘SRN’) is given. A list of the schemes affected, identified only by their DOTAS scheme reference numbers, has been published here on the GOV.UK website.

 

The list is comprehensive and will impact a wide range of taxpayers, many of whom may have believed they were simply making use of tax reliefs made available by Government policy. Concern has been raised as to whether taxpayers will have the funds necessary to pay liabilities given the quantum and timescales, especially given that many of the schemes will date back a number of years which taxpayers may believe cannot be reviewed.

 

What should taxpayers be doing?

Taxpayers who have entered into a DOTAS scheme should cross check the scheme SRN to the list. If the SRN appears on the list, or they receive accelerated payment demands from HMRC, they should seek advice to review their position and consider how to fund the liability.

 

Kinetic Partners’ tax risks and disputes team can assist by advising how the new legislation may impact taxpayers, what action they can take to resolve their position, and assist with negotiating settlement with HMRC.


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