The Chancellor’s Budget speech included an impassioned section on tax avoidance that also stirred up considerable controversy and concern among tax professionals as he signalled the introduction of pre-emptive payments in disputed cases.
“We will now require those who have signed up to disclosed tax avoidance schemes to pay their taxes, like everyone else, up front,” George Osborne said.
“This will apply in future to schemes covered by our general anti-abuse rule (GAAR) too.”
Perhaps in response to accountants who objected to the lack of any appeal mechanism in the proposals set out in a January consultation document, the Chancellor continued: “If people feel they’ve been wronged, they can of course go to court. If they win, they get their money back with interest.
“We have already consulted on this idea – now we will implement it. The OBR confirm that this will bring forward £4bn of tax receipts. And it will fundamentally reduce the incentive to engage in tax avoidance in the future.”
Having established the principle of accelerated payments in its autumn statement, the Finance Bill will now extend them to schemes under the disclosure of tax avoidance schemes (DOTAS) regime and those rejected by HMRC under the GAAR...
About John Stokdyk
John Stokdyk is the global editor of AccountingWEB UK and AccountingWEB.com.