MPs approved the clauses that will force investors in disputed schemes to pay tax up front, but there will be a legal right of appeal.
MPs on the House of Commons Finance Bill committee took in a raft of amendments during June, but crucially for those lobbying against accelerated payments and follower notices, it approved the legislative clauses that will force investors in tax avoidance schemes to pay disputed bills immediately.
However the Chancellor did include a new clause defining the circumstances in which a taxpayer could challenge HMRC's ruling that a scheme was similar to one ruled out of bounds at tribunal and therefore subject to the upfront payments. The grounds for appeal now include arguments that the specified judicial ruling was not relevant to the chosen arrangements, that notice was not given within the specified period, or that there were reasonable grounds for the taxpayer not to have taken corrective action.
Contrary to some of the fears voiced by those within the profession, the act will include the right to appeal penalties raised for non-compliance with follower notices (known as section 201 penalties).
Aidan James – a tax scheme promoter who put 60 of clients into a tax avoidance scheme involving second-hand cars and used by DJ Chris Moyles – has hired lobbying firm Whitehouse Consulting to fight advanced payment notices. Many of the same arguments have also been advanced by advisers such as Peak Performance as well as AccountingWEB members and other tax profession representatives who were concerned about the lack of judicial recourse if HMRC decided a scheme was caught by the new regime.
Meanwhile, back at Westminster, the Finance Bill is now approaching the report stage in the Commons and will then go to the House of Lords for a one-day legislative review. Amendments brought forward for the Commons report stage range from during relation to oil contractors where draft legislation has been under discussion over the past couple of months.
About Nick Huber
I’m a specialist business journalist and have a particular interest in tax and technology.