Budget 2014 – Tax anti avoidance measures

There barely goes a day when tax avoidance is not in the headlines. The government has given further powers to HMRC to continue to tackle this activity. Following a consultation which ended in February it was announced that tax payers entering into these schemes will have to pay the tax under dispute in accordance with normal payment dates. The lack of initial cash flow advantage will deter a substantial proportion of taxpayers from entering this type of arrangement in the first place.

In recent times we have also experienced an increased focus by HMRC on unpaid debts. HMRC have now been given further powers to collect debts of £1,000 and above direct from the taxpayers’ bank accounts including ISAs. The amount to be recovered will need to leave a minimum aggregate of all bank accounts balance of £5,000 after the debt is recovered. Whilst we appreciate this is huge problem for HMRC our experience with clients has been HMRC have been incorrect in the amounts they are trying to recover and the communication with the debt management side of HMRC is hugely problematic and frustrating leading potentially to undue tax being paid..