The taxman will no longer negotiate settlements with taxpayers who use tax planning that is challenged in court.
HM Revenue & Customs is to adopt a no compromise stance in cases where it believes it has a strong case. In such cases HMRC will not settle for anything less than 100p in the pound.
Chris Oates, tax partner at Ernst & Young, said the move would provide more clarity about whether a case would go to litigation, but said there were concerns about the consequences of the strategy.
'There is a question of resources, said Oates. 'Resources are pressed at HMRC, and this strategy is going to add to that pressure, as several new solicitors will have to be hired to cope with the increased number of cases.'
There are also concerns that on complex tax matters, inspectors will no longer be able to use their judgement to work through issues with businesses, as they will have to pass on issues for litigation.
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