In October 2014, we advised that HMRC had been given unprecedented powers under changes to UK tax legislation to issue Accelerated Payment Notices to individuals and/or corporates with respect to potential tax avoidance schemes.
On 31 July 2015, the High Court upheld the ruling that HMRC can demand individuals and corporates to pay tax in advance before they have had the chance to challenge the sum, if they are suspected of abusing legitimate tax reliefs.
HMRC has advised that it expects to issue a further 64,000 Accelerated Payment Notices to individuals and corporates by the end of 2016, on top of the 10,000 notices issued in 2014/2015 and they expect to collect £5.5bn in payments over the coming years.
It is estimated that HMRC has already received £596m since issuing the Accelerated Payment Notices in 2014 and has only refunded £28m after legal challenges. Accordingly, as we previously advised, if you or your clients are faced with an Accelerated Payment Notice, the Duff & Phelps’ team of experts is available to provide guidance through the process and develop solutions to manage any “cash crisis”.