Accelerated tax payments
In a significant extension of their existing powers, HMRC will require any disputed tax payments to be paid upfront by the taxpayer from the date of Royal Assent to the Finance Bill 2014 in the following circumstances:
- where it issues a ‘follower notice’ to the taxpayer in question (namely where a particular type of tax planning has been successfully litigated by HMRC in relation to another taxpayer);
- where the tax arrangements that the taxpayer has entered into are discloseable under the Disclosure of Tax Avoidance Scheme rules (HMRC intends to publish a list of the existing DOTAS arrangements for which it will issue payment notices by the time the provisions come into effect); or
- where HMRC considers that the taxpayer has entered into arrangement which it considers falls foul if the General Anti Abuse-Rule introduced in the Finance Bill 2013.
These provisions will apply where a variety of taxes are in point (including income, capital gains, corporation, inheritance, stamp duty and annual tax on enveloped dwellings).
HMRC has indicated that it will publish guidance by the end of May this year on how the proposed new rules will apply, on which we will update you in due course. However, what is clear at this point is that these provisions will give rise to cashflow issues for taxpayers with open enquiries.
Direct recovery of debts
Again, along the same theme, HMRC has announced that it will be granted powers in the Finance Bill 2015 to recover tax debts of £1,000 or more directly from taxpayer bank and building society accounts, including ISAs. The Government intends to consult on these measures, particularly safeguards to prevent hardship and to ensure that the rights and welfare of taxpayers are not compromised.