Commentary

A7.248 Accelerated payment notices

Administration and compliance

A7.248 Accelerated payment notices

Accelerated payments

A7.248 Accelerated payment notices

Whilst HMRC are able to deny a repayment of tax in certain cases while a dispute is resolved1, under self assessment, the taxpayer is able to claim the effect of a tax advantage while the enquiry and any subsequent tax appeal is unresolved.

In September 2013, HMRC set out their policy on withholding repayment claims in avoidance cases2, saying that in relation to disputes, those 'who engage in tax avoidance should not gain a tax advantage during the period from the tax due date to the time when we complete our enquiries and resolve any dispute', and that they withheld income tax repayments where, in their opinion, the claims which produced them constituted tax avoidance, and where they were challenging or considering challenging those claims by enquiry. Later that year, the government set out3 its aims to change the economics of entering into tax avoidance schemes, and to change the behaviours of people and promoters in relation to tax avoidance. Following that consultation process, the measures on accelerated payments were introduced by legislation enacted in Finance Act 20144, the objective of which is to ensure that tax in dispute in relation to the use of an avoidance scheme sits with the Exchequer during the dispute. These provisions are expected to be extremely effective in HMRC's battle to bring under control the proliferation of tax avoidance schemes. The linking of DOTAS to Accelerated Payment Notices can be seen as the most important development in DOTAS

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