Our website uses cookies to store information on your computer. You may delete and block all cookies from this site, but parts of the site will not work as a result. Find out more about how we use cookies.
(Do not show this message again)
Shout99 - News matters for freelancers
Search Shout99 - News matters for freelancers
(Advanced Search)
   Join Shout99  About Shout99   Sitemap   Contact Shout99 18th Jun 2018
Forgot your password?
Shout99 - Freelancers, FO35, Section 660
New Users Click Here
Shout99 - Freelancers, FO35, Section 660
Shout99 - Freelancers, FO35, Section 660
Front Page
Freelancers' Shop...
Ask an Expert...
Direct Contracts
Press Links
Question Time
The Clubhouse
Conference Hall...
News from Partners


Business Links

Shout99 - Freelancers, FO35, Section 660

Freelancers' Shop

Personal Financial Services
from ContractorFinancials




Income protection

... and more special offers for Shout99 readers in the Freelancers' Shop

Shout99 - Freelancers, FO35, Section 660
Shout99 - Freelancers, FO35, Section 660

News for the
Construction Industry

Hardhatter.com - News for small businesses in the construction industry

Powered by
Powered by Novacaster

New HMRC tax avoidance powers could lead to insolvencies
by Susie Hughes at 14:20 03/07/14 (News on Business)
HM Revenue and Custom’s proposed new powers to make businesses and individuals who have used tax avoidance schemes pay the disputed tax upfront could trigger a wave of insolvencies, according to a leading accountancy firm.
Under the new ‘Accelerated Payment’ rules due to come into force in July, HMRC will be able to make taxpayers pay disputed tax in advance, rather than waiting for the outcome of a tax tribunal ruling.

Taxpayers could be sent the notices in July and payment could be due as early as this October.

The requirement to pay upfront will apply retrospectively to any dispute which is ongoing on the day the rules come into force if the tax planning scheme in question has been notified to HMRC under the Disclosure of Tax Avoidance Scheme (DOTAS).

The Treasury has estimated that 33,000 individuals and 10,000 businesses will potentially be given accelerated payment notices by HMRC.

Accountants Moore Stephens explains that the tax planning schemes that are affected are typically used by high earning individuals and entrepreneurs or by businesses aiming to reduce taxes such as income tax or NIC.

Huge impact
Taxpayers will be able to make representations to HMRC about being forced to make an accelerated payment, but there will be no independent appeal against HMRC’s final decision.


Those affected must pay the disputed tax within 90 days, and penalties will apply for late payment.

David Elliott, Restructuring Partner at Moore Stephens, said: “Receiving a demand to make upfront payment of tax could put some taxpayers under financial strain, and in the very worst cases, could even trigger personal bankruptcies or business insolvencies before the technical merits of the arrangement have been tested.

“Even a remote prospect of being made bankrupt could mean that taxpayers feel under pressure to settle disputed cases rather than take an appeal to the courts.

“The potential impact of these new HMRC powers is so huge that an independent appeal process should be introduced.

“HMRC has said that it will use its discretion under its time to pay arrangements if a taxpayer can’t afford to pay the money upfront, but that is not good enough when the taxpayer’s entire way of life may be at stake.”

Moore Stephens warns that shareholders who take dividends now could put themselves in the firing line

They say that businesses that could be hit with an accelerated payment notice may already face a ‘contingent liability’ that means any dividends that are taken out of the business by its shareholders ahead of the request for money could later be deemed illegal and therefore repayable. This would mean that the liability for payment of the money would pass from the company to any shareholder that had benefited from such a dividend.

David Elliott said: “Directors, who are also shareholders, taking dividends from a company that has used a tax planning scheme may face claims against their own assets if the company is unable to pay an advance notice bill.”

If you wish to comment on this article, please log in and use the Reply button below. Registering is free and easy - see 'Join Shout99'.
Susie Hughes © Shout99 2014

View Comments (Flat Mode) Printer Version

Mail this to a friend
New HMRC tax avoidance powers ... Susie Hughes - 3/07
    Re: New HMRC tax avoidance pow... Tiger Aspect - 3/07
    Re: New HMRC tax avoidance pow... brianc - 4/07
       Re: New HMRC tax avoidance pow... ukmike8 - 4/07
          Miliband Initiative - New HMRC... Wilberforce - 9/07
             Re: Miliband Initiative - New ... ukmike8 - 9/07
             Re: Miliband Initiative - New ... ukmike8 - 9/07
                The new HMRC tax avoidance pow... brianc - 11/07
                   Re: The new HMRC tax avoidance... ability - 11/07
       Re: New HMRC tax avoidance pow... ability - 6/07

Copyright 1999-2018, Shout99.com | All Rights Reserved
Privacy Notice and Terms of Use