Irwin Mitchell Warns Notices Could Start to Hit Doormats In A Matter Of Days

The 2014 Finance Bill today received Royal Assent which will mean that HMRC will now be able to issue 90 day demands for payment to anyone who has used an alleged tax avoidance scheme into which an inquiry has been opened.

Thousands of individuals and businesses across the UK who have entered into tax planning arrangements which are under investigation by HMRC, could soon be required to pay the full amount of disputed tax before the matter is settled.

The new laws replace the softer former approach whereby if HMRC required an individual or business to pay tax which the individual or business believed had been unfairly claimed, the matter could be appealed through an independent tribunal. Crucially, under this regime, the taxpayer was not required to pay unless, or until, HMRC won through the courts. HMRC believe that about 33,000 individuals and over 10,000 businesses will be affected.

A tax payer can still appeal a decision through the tribunal under the new system, but the amount of disputed tax must now be paid up-front, with HMRC only making a full refund if they lose at the tribunal, a process which could take several years.

Phil Berwick, Partner* and Head of Contentious Tax at law firm Irwin Mitchell, said:

*Non-lawyer