Winckworth Sherwood warns that after receiving approval to issue follower notices and accelerated payment notices in this year’s Finance Act, the Government body could begin to prosecute some 33,000 people it believes to have taken part in deliberate tax avoidance schemes.
Partner at Winckworth Sherwood’s tax team, Simon Newsham, says this would give people just 90 days to settle demands that could reach an excess of £1m, marking the “most significant clampdown” ever initiated by the tax body.
“Individuals will naturally be concerned when they receive these demands, and it is entirely possible that they will not be able to afford to pay straight away, meaning they will face the threat of bankruptcy,” he said.
He urges members of the public who receive a notice not to panic and ignore it, but instead to talk to a tax professional, consider whether they have been incorrectly sold the product, collate all their correspondence and communications, and engage with HMRC from as early as possible.
"Raft of claims"
He added that he expects to see a “raft of claims” from individuals receiving these notices against advisers who may have encouraged participation in these schemes without ”fully explaining or understanding the risks involved”.
A follower notice can be issued when HMRC believes there has been a court or tribunal decision in a case that is similar to the tax treatment that has been claimed by the taxpayer.
When the notice is issued, the taxpayer will be required to amend their tax return or claims, or withdraw any appeal against an HMRC closure notice, assessment or determination.
Accelerated payment notices are issued when a taxpayer has entered into a tax avoidance arrangement that has been notified to HMRC under the disclosure of tax avoidance scheme rules.
Those who receive an accelerated payment notice will have to pay the tax due within 90 days.
