One group of professionals in the firing line for accelerated payment notices (APNs) demanding tax bill repayments within 90 days are footballers.
Reports have been coming through of APNs being received by a number of professions and high net worth individuals who participated in disputed avoidance schemes.
Some current and former footballers are facing bankruptcy because they cannot meet the demands, the paper reported. Around 100 have sought help from the Professional Footballer’s Association and a further 40 from Xpro, a welfare organisation for former players.
Xpro said these players are ‘seriously affected’ by HMRC demands for the repayment of tax reliefs granted on some investments schemes and 20 face bankruptcy. Many are divorced, facing house reposessions and individual voluntary arrangements.
One anonymous player was quoted admitting that he had been greedy, but was encouraged to use such schemes because so many other footballers were doing so too. The financial advisers who targeted them failed to explain the full implications should avoidance schemes go wrong.
The player started using the schemes when he was on a Premiership salary, but now he’s retired, he are is unable to meet the 90-day demand.
Several famous players have been linked to Ingenious Media schemes including Wayne Rooney and David Beckham. But those big names are better able to pay their tax bill on time, which may not be the same for the 60-plus others who are not earning as much now.
Since the publication of the DOTAS scheme numbers, HMRC has been drip feeding APNs out to different groups.
On AccountingWEB in late December, Taxworks reported a client who had used a stamp duty avoidance scheme had received such a notice.
According to the Financial Times, HMRC also sent a batch of APNs to those involved in the Liberty scheme, which allegedly generated artificial losses to reduce tax liabilities. It was closed down in 2009 and brought to tribunal in 2014.
Dawn Register, tax dispute resolution partner at BDO, said many schemes being targeted, such as Liberty, haven't been formally heard at a tribunal yet and this may be seen as “unfair” by some.
But she added, “The accelerated payment legislation allows that to happen. People feel it is unjust but the accelerated payment is just an accelerated payment, it’s not a settlement of the case. The Revenue doesn't need a final decision to issue one.”
There is a repayment mechanism if the tribunal does not rule in HMRC’s favour, she added. However this is unlikely to happen “for some time” in cases such as Ingenious that are only just being heard by the first tier tribunal. If the Revenue is unsuccessful and appeals the case could drag on through the upper tier tribunal and even higher courts.
As with the struggling footballers, Register said cashflow is the main issue for a lot of people receiving these notices.
“A lot may not have the money and the notice only allows 90 days to pay. There is a concern about personal bankruptcy and corporate insolvency too. If you come forward before the deadline it is possible a Time to Pay agreement could be reached, but you've got to be able to show genuine hardship.
“There's also the point that a lot of these people borrowed money to invest in the scheme, so that's where the Revenue tend to not be too happy,” she said.