09 Feb 2016
More than £2billion has been collected from users of tax avoidance schemes as a result of new government measures to collect disputed tax upfront.
New statistics reveal that HMRC has collected more than £2billion in disputed tax under rules introduced by the government in 2014.
The new Accelerated Payments notices mean that users of tax avoidance schemes pay disputed tax up-front while their tax-affairs are investigated, instead of waiting until they are concluded.
The HMRC said it wins 80% of cases that go to court, and that the new rules "eliminates the financial advantage that tax avoiders previously enjoyed".
However, the notices have been controversial.
In January, HMRC was forced to withdraw 2,000 Accelerated Payment Notices (APNs) demanding payment of disputed tax after admitting the demands should never have been issued.
In an embarrassing U-turn, the tax authority withdrew the pay up front tax demands after one of the conditions necessary for issuing an APN was not satisfied.
Litigation lawyer Rob Aberdein, Partner at Aberdein Considine, said concerns are being raised over the apparent lack of independent judicial oversight of HMRC's exercise of its powers.
He said: "Disputed tax, like any other amount in dispute, should only be payable once a tribunal or court has decided it is payable.
"One party should not be able to demand payment from the other party in advance of their dispute being determined. If all claims were run like this, the legal system would be chaos."
Nevertheless, the UK Government says the new powers have become a welcome tool.
The Financial Secretary to the Treasury, David Gauke, said: "We will not tolerate tax avoidance and Accelerated Payments has been a real game changer.
"HMRC already wins the vast majority of cases that go to court and now HMRC has taken more than £2billion from tax-avoiders who would have otherwise benefitted from that cash while they were being investigated."
HMRC is now issuing over 3,000 Accelerated Payment Notices a month, and has issued over 41,000 notices since Accelerated Payments were introduced. By the end of 2016, HMRC expects to have completed issuing notices, bringing forward over £5billion in payments for the Exchequer by March 2020.
If you wish to speak to Rob or a member of his litigation team regarding a dispute, please call all 0333 0066 333 or click here.