HMRC Consultative Document - marketed tax avoidance schemes

[Michael J Perry FCA]

It would appear that the Boyle decision is now final as no application to appeal has been lodged within the prescribed period.

Do contact us if you would like free advice about how this might impact on your own case.

This is probably required reading if you have an open tax enquiry under Section 9A TMA 1970:

https://www.gov.uk/government/upload..._avoidance.pdf

<admin note>Just fixed the pdf link - the HTML version can be viewed two posts down...</admin note>

[BaconVII]

This is probably required reading if you have an open tax enquiry under Section 9A TMA 1970:
https://www.gov.uk/government/upload..._avoidance.pdf

Can you repost that link - that one's broken

Thanks

[Michael J Perry FCA]

New Link - HMRC Marketed Tax Avoidance Schemes

https://www.gov.uk/government/consul...-tax-avoidance

Contact me if you are unable to open link and I will email you a PDF version.

[pengjn]

https://www.gov.uk/government/consul...-tax-avoidance

Contact me if you are unable to open link and I will email you a PDF version.

Very interesting and well written. I am still trying to decide whether to fight because I was playing by the rules at the time or just pay up and chalk it up to experience.

[Living life on the Edge]

This is a bomb waiting to go off!

In plain English, the government are looking to pass a new bill which will mean you have to pay your tax in advance of disputing it.

This means you could be bankrupted before you even have your day in court.

+1

I have read the draft legislation, and if I understand it correctly, HMRC could - assuming the legislation passes into law unamended:

1) Take an existing, finalised legal case (let's say Boyle for the sake of argument) .
2) Apply the circumstances of that substantive case to your scheme and make a case that the substantive case is relevant to yours within 12 months of the substantive case being finalised.
3) Request upfront payment of any assessed liability both under appeal and even enquiry (forcing you to pay before you have had an opportunity to appeal an amount in a year under enquiry) by means of a 'payment notice ' and 'follower notice'.
4) The only recourse an individual would have would be a 90 day period to challenge the grounds of the payment notice, against very limited criteria.


A couple of other points of note to me:

"There is no inherent presumption that tax under dispute should sit with the taxpayer rather than the Exchequer."



I think you could also make a strong argument that there is no inherent presumption that the tax under dispute should sit with HMRC.
In section 5, 'assessments of impacts' under the section 'Impact on individuals and households ', it states:

"There will only be an impact on those individuals who engage in tax avoidance. We expect most of these to be higher or additional rate taxpayers"


This is a flippant, throw-away comment that I believe vastly understates the hurt that this legislation will bring.
Since when has it been acceptable to potentially bankrupt individuals and change lives forever when they have had no opportunity to follow due process as it exists today? I'm thinking BN66 is a nasty precedent though.

What difference does the tax-band of the taxpayer make? Is this to appeal to Labour MP's and garner cross-party support?

[DonkeyRhubarb]

The most sinister part is the extended Proposal 1 on page 15.

This would give HMRC the power to serve immediate payment notices on anyone who has used a scheme registered under DOTAS.

DOTAS was introduced in 2004, so we are talking about schemes going back 10 years.

[Dylan]

The equivalent of the Police giving you 3 points and a fine straight away resulting in a totting up ban and loss of job (or bankruptcy and loss of job in this case), then removing the points and refunding you if you aren't found guilty in court with no regard for the mess you are now in.

Innocent until proven guilty is (was?) a fundamental part of law in this country.

The document talks about tax payers dragging their heals, HMRC have known about these schemes for years and years, including how they work, DOTAS means they have know about them since inception in many cases and have done nothing.

Still, as long as Vodafone, star bucks, amazon et el are getting the same treatment eh.

[PeterF]

Well, think this is the last straw for me. Given HMRC's conduct and tactics throughout all of this myself and the other half have been pondering whether england is the best place for the kids to grow up - clearly it is not. Time to do the sums, consider paying up to draw a line under it then get the hell out of here. FWIW, that means a loss of total taxes in the region of £70k per year.

Enough!

[DonkeyRhubarb]

NTRT will be getting on the case

The equivalent of the Police giving you 3 points and a fine straight away resulting in a totting up ban and loss of job (or bankruptcy and loss of job in this case), then removing the points and refunding you if you aren't found guilty in court with no regard for the mess you are now in.

Innocent until proven guilty is (was?) a fundamental part of law in this country.

The document talks about tax payers dragging their heals, HMRC have known about these schemes for years and years, including how they work, DOTAS means they have know about them since inception in many cases and have done nothing.

Still, as long as Vodafone, star bucks, amazon et el are getting the same treatment eh.

The document refers to 65,000 open cases. Given that DOTAS has been around 10 years, the proposals will affect a large proportion of these 65,000.

Many of these cases will be ones where HMRC knows full well that they have little prospect of winning in court.

This is draconian in the extreme, and we in NTRT will be redirecting some of our lobbying effort at it.

[Dylan]

How can we get involved?

This is disgusting, bullying behaviour.