At one point it seemed that Accelerated Payments may be scrapped altogether however, with £1 billion already collected this year that won’t be the case. HMRC has decided to really crack down on tax dodgers with the implementation of this legislation that was included in the Finance Act 2014.
The intention of Accelerated Payments is to eliminate the financial advantages taken by those who knowingly evade paying taxes, compared to those that pay their taxes on time. These individuals or businesses use tax avoidance schemes to prolong payment, which in turn takes away from those that actually use the schemes legitimately.
This legislation has principally been set in place to send a message to tax avoiders and attempt to bring them back in line. Accelerated Payments requires the individual or business to pay upfront and any tax discrepancies can be settled at a later time.
“We are winning around 80% of avoidance cases that people litigate. And many more are settling before litigation” said Jennie Granger, Director General for Enforcement and Compliance, HMRC
HMRC has already issued more than 25,000 notices to pay disputed tax since August 2014; they expect to generate £5.5 billion in payments for the Exchequer by March 2020. If someone is wishing to settle an avoidance issue they should contact HMRC immediately on 03000 530435.