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The HMRC PR Game

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    #11
    see this link

    HMRC's progress: improving tax compliance, preventing tax avoidance - News from Parliament - UK Parliament

    In particular see para 18 on page 11, penultimate sentence.

    Comment


      #12
      Originally posted by Rob79 View Post
      see this link

      HMRC's progress: improving tax compliance, preventing tax avoidance - News from Parliament - UK Parliament

      In particular see para 18 on page 11, penultimate sentence.
      Which says:

      18. We queried whether HMRC's litigation strategy for avoidance cases is too cautious. We have heard in the past from the major accountancy firms that they would continue to promote avoidance schemes even when there was a 50% chance of these being successfully challenged.[34] HMRC told us that last year it defeated 30 avoidance schemes and protected £2.7 billion through litigation. It said it is proud of its 80% success rate in avoidance cases, arguing that its high level of success is an important deterrent.[35] HMRC emphasised the importance of measures outside of litigation. For example, it has not taken Employee Benefit Trusts to court, and sees reaching a settlement as the most effective way of resolving them. Unlike marketed avoidance schemes which often have a large number of followers, Employee Benefit Trusts tend to be bespoke, making individual case-by-case litigation costly.[36]


      Thanks Rob !
      "If You Tolerate This Your Children Will Be Next ..."

      Comment


        #13
        Surely this is great news. Having said that, when what seems to be good news appears, it isn't long until another transcript appears which cancels it out and puts us back to square one. I hope not in this case.
        STRENGTH - "A river cuts through rock not because of its power, but its persistence"

        Comment


          #14
          Originally posted by dangerouswhensober View Post
          Which says:

          18. We queried whether HMRC's litigation strategy for avoidance cases is too cautious. We have heard in the past from the major accountancy firms that they would continue to promote avoidance schemes even when there was a 50% chance of these being successfully challenged.[34] HMRC told us that last year it defeated 30 avoidance schemes and protected £2.7 billion through litigation. It said it is proud of its 80% success rate in avoidance cases, arguing that its high level of success is an important deterrent.[35] HMRC emphasised the importance of measures outside of litigation. For example, it has not taken Employee Benefit Trusts to court, and sees reaching a settlement as the most effective way of resolving them. Unlike marketed avoidance schemes which often have a large number of followers, Employee Benefit Trusts tend to be bespoke, making individual case-by-case litigation costly.[36]


          Thanks Rob !

          Not sure how this is good news other than to show that they are reluctant to litigate, but with APNs do they need to? With an APN they get the tax, albeit without the interest and potential penalties.
          If they want interest and penalties they would have to litigate. So, in essence, it's cheaper to pay the APN than settle.
          Am I missing something?

          Comment


            #15
            Originally posted by jbryce View Post
            Not sure how this is good news other than to show that they are reluctant to litigate, but with APNs do they need to? With an APN they get the tax, albeit without the interest and potential penalties.
            If they want interest and penalties they would have to litigate. So, in essence, it's cheaper to pay the APN than settle.
            Am I missing something?
            If you pay the APN, eventually you do have to agree a final position. That might be more or less than the APN figure with interest adjusted accordingly.

            If you settle, that's the end of the process.

            I read the statement as saying that negotiation is available on a scheme by scheme basis and HMRC want to avoid litigating. That should give the opportunity to say to HMRC "Your settlement offer is a good starting point but now let's talk about what you actually want".

            Comment


              #16
              Originally posted by Rob79 View Post
              If you pay the APN, eventually you do have to agree a final position.
              Once HMRC have issued APNs for a scheme, and collected the tax, I can't see them being in any hurry to finalise things.

              My guess is many cases will be left open indefinitely, unless a taxpayer forces the issue.

              The Government have said that one of the purposes of APNs is to clear the backlog, which suggests they don't care what happens to open cases once they've got the tax.

              I wouldn't be surprised if we get a new definition for what counts as an "open case".

              Comment


                #17
                Originally posted by DonkeyRhubarb View Post
                Once HMRC have issued APNs for a scheme, and collected the tax, I can't see them being in any hurry to finalise things.

                My guess is many cases will be left open indefinitely, unless a taxpayer forces the issue.

                The Government have said that one of the purposes of APNs is to clear the backlog, which suggests they don't care what happens to open cases once they've got the tax.

                I wouldn't be surprised if we get a new definition for what counts as an "open case".
                An interesting point of view.

                HMRC of course blames promoters and taxpayers for delays in settling, saying that sometimes merely delaying the tax is a "victory" for the taxpayer. (see para 16 of the report). The reality is that HMRC advances those cases it thinks it can win and holds back those it may lose in order not to lose the "deterrent effect" of its 80% win rate.

                At present there is no statute of limitations in tax law which applies a cut off for old assessments. In theory therefore they stay open for ever, even post death. As you say though, once the tax is paid, there is no incentive to go further. We might see some sort of cut off say 6 years post APN settlement? Would be controversial given the time it takes to get to Court and past HMRC prevarication but that does not seem to deter them.

                I wonder if there's another anti APN argument here?

                Comment


                  #18
                  I'm sure the mindset in HMRC will be "issue APNs, collect tax, job done".

                  Comment


                    #19
                    that will be great if HMRC has to go to court in a limited time.

                    Comment


                      #20
                      Originally posted by StrengthInNumbers View Post
                      that will be great if HMRC has to go to court in a limited time.
                      I wouldn't bank on that.

                      Comment

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