Upfront tax demands

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The Chartered Institute of Taxation (CIOT) and Association of Tax Technicians (ATT) are alerting members that Finance Bill 2014 - which is due to receive Royal Assent in July - contains legislation enabling HMRC to demand payment upfront of disputed tax in certain cases, principally involving tax avoidance or deferral, and the first demands are likely to be issued as early as September 2014

 

An estimated 43,000 taxpayers could receive such demands, which will be issued over an extended period say Harris & Co accountants Northampton.

 
The note alerts agents and advisors to the practical issues they may need to consider if they have clients who fall within the scope of the accelerated payments legislation.

 
This includes advising affected clients to make arrangements to put themselves in funds for making the payment in due course as the demand notice cannot be appealed.

 
The note also points out that ‘it is possible that members in practice may receive claims from clients arising from these matters’ because they had introduced their client to the promoter of a tax avoidance scheme or advised their client in relation to a scheme. In such situations, the note suggests that advisors notify their insurers in accordance with the terms of their professional indemnity policy.

 
Tax advisers are also reminded to familiarise themselves with Part 8 of the Professional Conduct in relation to tax – available at http://tinyurl.com/CIOT-PCRT

 
The note is available at http://www.tax.org.uk/Resources/CIOT/Documents/2014/06/Accelerated%20Tax%20Payments.pdf

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