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December 13, 2013

Users of Failed Tax Avoidance Schemes

New measures were announced in the Autumn Statement 2013 to clamp down on users of marketed avoidance schemes.

Where HMRC successfully challenge an avoidance scheme at the Tribunal or Courts, all other users of that scheme will be obliged to either change their return to reflect that decision or explain to HMRC why they should not.

If taxpayers choose not to amend their return and the scheme later fails on the same point of law they will be liable to pay a tax geared penalty (in addition to the tax and interest payable because of the failure of the scheme).

Further rules will accelerate the timing of the payment of the disputed tax.  From the date of Royal Assent (expected in July 2014) HMRC will be able to issue an avoidance follower notice requiring payment of the tax.

This will prevent taxpayers from holding onto funds during the investigation and tribunal/court case and achieving a cash flow benefit.

News & Views from PD Tax - December 2013


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