The Treasury has announced that people found to be using tax avoidance schemes will be required to pay tax bills upfront whilst HMRC investigates arrangements.
Currently, taxpayers entering tax avoidance schemes are required to disclose this fact to HMRC, at which point HMRC can decide to investigate and challenge it.
The new approach will target any taxpayers who are being investigated under the General Anti-Abuse Rule, and those who are associated with schemes that are subject to the Disclosure of Tax Avoidance Schemes regime. This will differ from previous approaches, in that those under investigation will not be able to hold onto disputed tax until the case is closed, and will instead have to pay upfront. Taxpayers will be permitted to make their case in court, and if successful, their money will be returned with interest.
The move is hoped to act as a deterrent to those attempting to exploit the current system.
Rodger Armstrong, Commercial Director of JSA Services comments, “The new system makes it clear that tax avoidance is unacceptable, and will remove the possibility of tax avoiders continuing to benefit whilst under investigation.”
“The people who don’t play by the rules will lose out, as all advantages will be removed.”
To get professional tax advice, based on years of experience working for contractors, contact JSA Services for free on 0800 25 26 40 today.