Pay now argue later – EY Budget 2014 comment
19 March 2014
Jim Wilson, head of tax controversy comments on the Budget:
“The headline anti-avoidance measure, forecast to bring in £290m in 2014/15 and £4 billion over 5 years, seeks to remove the potential cash-flow benefit of undertaking tax avoidance arrangements. In a fundamental change to the current “self assessment” tax regime, HMRC will require taxpayers who have implemented particular tax avoidance schemes to pay the amount of tax in dispute in advance to the Exchequer, while the dispute is resolved.
“Similarly, taxpayers who have used tax avoidance schemes which are defeated in another party’s litigation will also be required to pay the disputed amount of tax.
“These measures are designed to fundamentally address the current backlog of over 65,000 ongoing HMRC enquiries into tax avoidance and bring in a flood of cash up front, rather than in “dribs and drabs” over a period of years. However, any tax that is paid in advance under these new rules may have to be repaid, together with interest, if HMRC is ultimately unsuccessful in challenging the arrangements.”
For more information on the 2014 Budget, visit the EY 2014 Budget page.