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Have you used a tax avoidance scheme?

The Finance Bill has now received Royal assent and controversial accelerated payment notices are now law. This means from next month HMRC can issue accelerated payment notices to people HMRC consider have been involved in tax avoidance vehicles and demand the full disputed tax is paid upfront.

The more interesting point is not how HMRC use these powers with current tax avoidance vehicles, but how it applies the powers to schemes and investments made many years ago, where investors will have got tax relief and the scheme is now a distant memory in the tax payers mind.

Will HMRC use these new powers to demand back payment of associated tax relief, penalties and interest?

The treasury have published a list on gov.uk website which lists the avoidance schemes HMRC are targeting and state HMRC may issue notices to people using such schemes over the next 20 months or so.

This will be an interesting story to follow, as the sums involved are likely to run into millions of pounds plus the powers have been criticised by leading accountants and lawyers as they do not give the taxpayer an option of disputing the tax before paying at a tribunal and also not giving a right of appeal. Perhaps a more fundamental issue, one which HMRC disputes, is that it is changing the tax law retrospectively. It is going to get interesting!