In what has become a characteristic of HMRC guidance, information has finally arrived on the accelerated payments regime – a full year after it came into effect.
The revenue has published an explanation about penalties for tax avoidance schemes, including accelerated payments requiring the disputed tax to be paid in advance.
It has also published an explanation about when it will issue a “follower notice” penalty (for taxpayers who have used an avoidance scheme similar to one that has been shown to be ineffective), and how it works out a reduction to penalties.
“When working out the quality of your co-operation, we will consider what we needed you to do in respect of the denied advantage and how much of it you have done,” HMRC’s penalty guide says.
HMRC takes into account the timing, nature and extent of what a taxpayer has done.
Accelerated payment
HMRC can issue an accelerated payment notice if the disputed tax hinges on the same or very similar points in a case already decided in court, known as follower cases; or it the tax avoidance scheme is covered by.
They can also be issued when the tax avoidance scheme is covered by disclosure of tax avoidance schemes or the general anti-abuse rule.
The accelerated payment notice explains how the amount was calculated and what the taxpayer can do if they disagree with the amount.
Follower notices
Taxpayers who have received a “follower notice” can reduce their tax penalties by amending their tax return or claim, settle their appeal, entering into a written agreement with HMRC or making a payment.