‘Pay first’ move in tax disputes

People in dispute with HM Revenue & Customs (HMRC) over their use of tax avoidance schemes will have to pay the disputed sums upfront.

However, they will get their money back with interest if they win, highlighting the value of expert tax investigation advice in the event of a dispute with HMRC.

In the 2014 Budget on 19 March, Chancellor George Osborne said the government intended to extend the upfront payment requirement to cover disputed tax associated with cases covered by the Disclosure of Tax Avoidance Scheme (DOTAS) rules or General Anti-Abuse Rule (GAAR).

Budget documentation said: “This new power will remove the cash flow advantage for the taxpayer of holding onto the disputed tax during an avoidance dispute.

“The new power will only apply to tax avoidance schemes that are disputed by HMRC. The legislation will make it clear that HMRC will only be able to issue an accelerated payment notice where they have first sent the taxpayer an enquiry notice or issued them with a notice of assessment.

“If the taxpayer subsequently wins their case in the courts, they will be reimbursed with interest.”

Resolving a tax dispute with HMRC can be time-consuming and potentially costly and cause significant disruption to a business or your personal life.

By working with the tax investigations team at Taxation-Investigation, taxpayers will have access to practical, expert help and advice, focused on supporting you through the process and achieving the best possible outcome.

Our experience means that we understand the complexities of the UK tax regime and compliance issues. We also understand the way that HMRC works and the processes and procedures it follows in dealing with disputes, investigations and enquiries. For more information on our tax investigation and dispute services, please contact us.