HMRC has published the results of its recent consultation on tax avoidance. The consultation, “Tackling marketed tax avoidance’ sets out proposals to require those using avoidance schemes to pay tax upfront on account and to provide incentives to resolve avoidance disputes as quickly as possible.

The government announced in the 2013 Autumn Statement that:

  • It would take forward proposals in connection with ‘High Risk Promoters’ and ‘Conduct Notices’.
  • Promoters who are considered to have breached “threshold conditions” will be sent notices, which will set out conditions for compliance and targeting those areas of the promoters’ business that HMRC considers inappropriate or inadequate. Those who fail to improve will have increased levels of compliance applied to both them and the intermediaries with whom they work.
  • It would introduce an accelerated payments regime linked to the issue of a ‘Follower Notice’. Notices will be issued to taxpayers under enquiry setting out why HMRC considers a judicial ruling applies to them and the amount tax it considers is owed. Those taxpayers must then amend their tax returns and pay the tax on account (with failure to do so, attracting penalties).
  • It would consult on widening the criteria for seeking accelerated payment during tax avoidance disputes. The new suggestion is that the accelerated payment regime should be expanded to cover all cases where planning has taken place under a scheme that has been notified under DOTAS, see Disclosure of tax avoidance schemes (DOTAS) or if a scheme is considered to be abusive by the GAAR panel.

The consultation document sets out:

  • draft legislation to implement the measures announced in the 2013 Autumn Statement, and
  • the consultation proposals for the wider criteria.

HMRC published the draft legislation on budget day (19 March 2014) and included it in the Finance Act 2014.

Links: HMRC: Tackling marketed tax avoidance