HMRC is adopting an increasingly aggressive approach to taxpayers who choose to dispute a case involving perceived tax avoidance, explain Kate Ison and Aude Delechat of Berwin Leighton Paisner.
It is estimated that there are currently more than 65,000 open cases involving marketed tax avoidance, many of which date back over four years.
In a number of recent consultation papers, HMRC has proposed a range of controversial measures which will give HMRC power to require a taxpayer to pay disputed tax when HMRC has won another case involving similar facts. However, the power goes beyond simply requiring payment pending the outcome of an appeal. Taxpayers will effectively be forced to concede and accept HMRC’s application of the prior case, with very limited possibility to object or they will face heavy tax-geared penalties if they continue to pursue the dispute.
The measures are intended to make it less...