HMRC have won a High Court battle following the legality of accelerated payments. The payments, that were introduced last year, are an attempt to crackdown on tax avoidance and make individuals who are suspected of tax avoidance pay their tax up front while avoidance is being investigated.
HMRC opposition claimed the payment notices were not only unreasonable but also breached natural justice and abused their rights under the European Convention on Human Rights to a fair trial and protection of property. They further claimed that the expectation they had when they joined the avoidance scheme was that they wouldn’t have to pay tax before the dispute had been resolved.
However, these reasons proved to be too weak as the court was in HMRC’s favour for all challenges.
David Richardson, Director of Counter Avoidance at HMRC, commented:
“This is an important result, and good news for the vast majority of taxpayers who do not try to avoid paying their fair share of tax. Those who use tax avoidance schemes need to know they can no longer hold on to the money while their affairs are investigated. They have to pay their tax up front like everybody else.”
HMRC now expect to issue around 64,000 tax notices by the end of 2016 providing £5.5bn in payments for the Chancellor by 2020.
HMRC wins 8 out of 10 cases of all avoidance disputes.
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