By Ken Maggs, Moore Thompson
HM Revenue & Customs (HMRC) has been able to collect over £2bn from tax avoidance schemes since a rule change was brought in that made it easier to collect disputed amounts upfront direct from bank accounts.
The Finance Act 2014 introduced accelerated payment notices (APNs), which allow the taxman to collect cash direct from taxpayers’ accounts without having to wait until often lengthy investigation tax affairs have been concluded.
HMRC sends out more than 3,000 APNs every month and has issued more than 41,000 since they were introduced. By the end of this year, the taxman expects to have issued around 64,000, bringing in £5.5bn in payments by March 2020. Once a taxpayer receives such a notice, he or she has 90 days to pay the amount HMRC believes they owe.
Commenting on the publication of the figure, David Gauke, Financial Secretary to the Treasury pointed out that HMRC already wins the vast majority of cases that go to court and now HMRC has more than £2bn from tax avoiders who would otherwise have benefited from the cash while they were being investigated.
However, last month HMRC was forced to retract thousands of APNs and agreed it would repay tens of thousands of pounds to as many as 2,000 IT and banking professionals who were involved in Isle of Man-based schemes after acknowledging that the department had failed to meet all the conditions requiring full payment of tax owed.
HMRC admitted that the APNs should not have been issued in this case because although the arrangements were notified to the tax department, they were not ‘notifiable’ to HMRC under the Disclosure of Tax Avoidance Schemes (DOTAS) regime.