Taxman rakes in £1bn as avoidance clampdown gets results

HM Revenue and Customs collected another £1.3bn in disputed tax last year from individuals and small businesses as its crackdown on ‘aggressive’ tax planning shows no sign of losing momentum.

The figure, revealed in a report in the Financial Times (FT), is up by a fifth on the sum collected the previous year under the ‘Accelerated Payment Notice’ (APN) drive.

And it brings the amount raked in by the taxman since the scheme was initially launched in 2014 to more than £4bn.

The rules mean tax avoidance scheme users have to pay up disputed tax upfront while their affairs are investigated.

The aim is to remove the cash flow advantage of holding on to disputed tax, sometimes for years, while cases were investigated and litigated.

Under the scheme a taxpayer with an outstanding tax bill has 90 days once an APN is received to pay up or make representation to HMRC if they consider the notice incorrect.

It has been described as a ‘shoot first and ask questions later’ approach but is clearly proving effective for HMRC.

The importance placed on APNs has been clear from day one. Launching the scheme HMRC’s director general for enforcement and compliance described the notices as “at the forefront of the government’s drive to tackle tax avoidance schemes” and “changing the economics of tax avoidance”.

In its latest statement reported, by the FT earlier this month, HMRC said: “HMRC has an excellent record in supporting those in genuine difficulty, including offering more time to pay if appropriate.

“APNs change where the disputed tax is lodged while the issue is being investigated, ensuring that those who have used avoidance schemes are in the same position as everyone else who pays their tax up front and on time. The regime does not change taxpayer appeal rights.”

So far the HMRC has issued more than 75,000 APNs. According to the newspaper in July it said the average bill for large companies trying to avoid tax was £6m, while for individuals and small corporations it was £74,000.

If you would like to discuss any aspect of personal tax please contact me on 01772 430000.

 

Kevin’s specialisms include income tax, capital gains tax, inheritance tax and PAYE. Areas of work he has undertaken include dealing with HMRC enquiries and meetings with HMRC, inheritance tax planning reports, advising on capital gains property disposals and remuneration planning.