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HMRC continues to allocate significant resources to challenging aggressive tax avoidance. HMRC’s aim is to deter taxpayers from entering into new tax avoidance arrangements and to encourage participants to withdraw from them. HMRC claim to have won over 90% of the recent avoidance cases it has taken to Court.
BDO Tax Avoidance Review services
BDO’s Tax Dispute Resolution team believes that expert advice is the key. We will advise on the options available to you, including:
- Reviewing any tax avoidance or other complex arrangements to establish risks
- Advising on tax avoidance enquiries and settlement options, including withdrawal from arrangements
- Checking that HMRC is not exceeding statutory time limits or its discovery and enquiry powers
- Exploring your options, including making representations, when you receive an Accelerated Payment Notice or a Follower Notice from HMRC
- Negotiating time to pay arrangements and penalties
HMRC’s newly expanded powers for tackling tax avoidance mean that affected taxpayers face significant challenges. These are summarised below and expanded upon in our Tax Avoidance Review brochure.
Disguised Remuneration Loan Charge
The Disguised Remuneration Loan Charge was introduced by HMRC to further challenge the use of disguised remuneration arrangements by taxpayers. A recent independent review into the loan charge has resulted in significant changes being made to the legislation, including removing some taxpayers from the scope of the loan charge altogether.
General Anti-Abuse Rule (GAAR)
GAAR was introduced as a deterrent to those undertaking tax avoidance arrangements and HMRC is now actively using GAAR to tackle such arrangements. GAAR was introduced on 17 July 2013 and generally applies to arrangements entered into on or after that date.
Tax Expert Witness services are often utilised in contentious situations and in dispute resolution. This may include professional negligence claims in respect of entering into failed tax avoidance arrangements. It is also used in respect of tax consequences of separation or divorce.
Corporate Insolvency & Tax Avoidance
In some tax avoidance cases, companies that implemented arrangements are now being placed into insolvency proceedings. The creditors often include HMRC and relate to disputed tax liabilities in respect of tax avoidance arrangements. In some instances, HMRC instruct their own liquidators to pursue former directors / shareholders for the tax they believe is due.
Follower Notices require taxpayers to amend their tax returns in order to remove any entries relating to a tax avoidance arrangement that HMRC considers was proven ineffective in Court, either directly or as a result of a judgement on another similar arrangement.
Accelerated Payment Notices (APNs)
Accelerated Payment Notices (APNs) are issued to individuals and companies participating in ‘notifiable’ tax avoidance arrangements, giving them 90 days to pay HMRC an amount on account for the tax in dispute.
Tax geared penalties
Tax geared penalties may apply if arrangements are proven ineffective, sometimes despite advice being taken when implementing the arrangements. HMRC’s approach can depend on the nature of the arrangements, as well as the specific facts and circumstances of each taxpayer. We can provide specialist advice from the outset of any review.
Time To Pay (TTP)
If taxpayers cannot afford to fund a settlement of tax debts in full and on time, a time to pay can be discussed with HMRC.
Please get in touch to discuss how we can help you resolve any tax avoidance issues.