The Finance Bill 2014 has received Royal Assent, bringing in controversial new powers for HMRC including accelerated payments notices (APNs) and follower notices on tax avoidance schemes.
The Finance Bill 2014 was granted Royal Assent on 17 July and is now the Finance Act 2014.
APNs may be issued to taxpayers who have used an avoidance scheme and where certain conditions are satisfied, including receiving a follower notice, where they have used a DOTAS notifiable arrangement or where they are subject to a GAAR counteraction.
The Revenue will now also be able to issue follower notices for cases of tax avoidance that resemble others where principles were previously established, and taxpayers will be required to pay in advance of an agreed final position.
Follower notices can be issued to taxpayers who have used an avoidance scheme which has been shown in another taxpayer’s litigation to be ineffective. The notice tells the taxpayer they may be liable to a penalty of up to 50% of the tax in dispute if they do not amend their return or settle their dispute.
If the taxpayer wins their case, the money will be reimbursed with interest.
Promoters of tax avoidance schemes will also be subject to conduct and monitoring notices, are required to provide information, and can be “named and shamed” by HMRC.
One absence from the Finance Act 2014 is the ability for HMRC to remove funds directly from bank accounts, announced back in the 2014 Budget, which remains on the table for the next Finance Act.
Legislation introducing APNs and follower notices was also announced in the 2014 Budget and enacted in part four of the Finance Act 2014.
HMRC has since published guidance on accelerated payments and follower notices, to support the new anti-avoidance legislation included in Finance Act 2014.