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Acceleration of tax due on certain schemes identified under DOTAS and GAAR

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19 March 2014
Time was when Tax was due after the event and when it was agreed between taxpayer and HMRC. The Budget changes this familiar arrangement and introduces the concept of accelerated payments of tax associated with schemes covered by the DOTAS rules or counteracted under the GAAR. It also covers situations where a judicial decision in a similar case has been found in favour of HMRC.
What does this mean to the taxpayer in dispute with HMRC? Controversially, it is proposed that the rules will be changed so that if you have a relevant open enquiry or open appeal on or after Royal Assent (normally mid July) then HMRC will be able to issue a Notice to Pay. These will go to those they deem to have received a tax advantage, giving 90 days to pay. You can request reconsideration of a Notice and that could defer the payment date by a further 30 days but, overall, this change means that tax cash flow benefits are erased and HMRC will receive tax payment sooner.
This is an emerging area. If you think you could be affected, please give us a call as soon as possible. This will only come into effect in a few months time but many will find that thinking about it now will be worthwhile.