INVESTMENT SCHEMES suspected of tax avoidance are today to be named in a 1,200-strong list earmarked for accelerated payment by HM Revenue & Customs, the department has confirmed.
Last week, Accountancy Age learned HMRC expects to raise £7bn through accelerated payment of disputed taxes from 43,000 taxpayers over the next two years.
Of that figure, 33,000 are individual taxpayers expected to contribute £5.1bn. The individuals affected have a mean gross income of £262,000, HMRC said. The other 10,000 are businesses, bringing the predicted figure up to £7bn.
Under the new ‘Accelerated Payment’ rules, HMRC will be able to make taxpayers pay disputed tax in advance, rather than waiting for the outcome of a tax tribunal ruling. If the taxpayer wins their case, the money is reimbursed with interest.
Royal Assent is required for HMRC to begin utilising the powers, but that is expected within the coming days, along with the rest of the Finance Act.
Hundreds of investors including business leaders, sports stars and entertainers were warned last week to prepare to receive sizeable tax bills as HMRC cracks down on the use of alleged tax avoidance schemes.
Ingenious Media, an investment company, issued a warning to 1,300 investors, including sports stars such as David Beckham, that they could be forced to pay back all the tax they saved, possibly with interest, by using its alleged tax avoidance scheme, the Financial Times reported.
The company has financed box-office hits such as Avatar and has previously denied that its film and game partnerships are tax avoidance schemes, saying they are legitimate businesses that have generated more than £1bn of taxable revenue.
Last week, several celebrities along with senior executives and QCs were implicated in a £1.2bn scheme known as Liberty, which saw huge artificial losses generated offshore which members could then use to avoid tax on other income.
Class action services firm Rebus has launched a service specifically aimed at recouping losses for investors who were alegedly mis-sold the Icebreaker tax avoidance scheme which ring-fenced more than £300m on the premise of saving £135m in tax.
Rebus Icebreaker Settlement Entity (RISE) was launched, Rebus claims, “in response to the lack of communications from Icebreaker”, and will act as a “collective voice” for investors, “all of whom have been left with little to no representation”. It will assist investors in agreeing any outstanding tax liabilities, arrange a time period for settlement and take appropriate action against those who may have mis-sold the investment originally.
HMRC intends to extend the date for withdrawal of transitional relief on investment growth from 30 November 2016 to 31 March 2017
The current business rates system is over-complex and reform is needed, but reforms should focus first of all on simplifying the appeals process, particularly for businesses which are subject to business rates exemption
The CIoT has called on the government to rethink its approach to ensuring online sellers pay the correct amount of VAT.
Jane Ellison to serve as 'tax minister' following ministerial responsibilities for public health. David Gauke become chief secretary to the Treasury