ADVANCED PAYMENT NOTICES to thousands of investors in tax avoidance schemes are to be issued by HM Revenue & Customs in the coming weeks, Accountancy Age has learned.
As many as 2,500 notices are to be issued per month by the end of year, the taxman confirmed, as it seeks to claim disputed revenues from 43,000 avoidance scheme users – 33,000 individuals and 10,000 businesses – representing £7bn to the public purse over the next 18 months.
Thus far, around 48 demands have been issued, HMRC said.
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.
Among those targeted by HMRC are investors – including celebrities – in the Liberty scheme, which generated huge artificial offshore losses which members could use to avoid tax on other income.
Those issued with a demand to pay must do so within 90 days or face a penalty of 5% immediately and a further two occasions of more 5% penalties.
Graham Webber of class action firm Rebus warned scheme promoters and investors are likely to fight the assessments from HMRC.
He said: “The APN is meant to be backed by HMRC’s best judgement of the tax position. We have serious concerns over how this can be done in many cases as HMRC are not exactly renowned for getting their sums right and they have targeted a number of complicated structures and schemes in the first wave. Indeed some leading promoter houses have already warned their investors that they will get demands this weekend.”
He added there are concerns that following the issue of demands, HMRC will be even less inclined to arrive at a “sensible” settlement rather than litigate.
“This is a major worry for us as the majority of our clients are not multimillionaire celebrities, but honest professionals and businessmen who just got it wrong or were duped,” Webber said.
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