HMRC to squeeze tax avoiders
7th October 2014 | News
The UK Tax authority is to use new powers to try and crack down on alleged avoidance schemes. Anyone who bought into three companies promoted by investment company Ingenious Media has received a final deadline from HMRC calling for them to settled owed tax.
A number of these people have received the first of HMRC’s new so-called ‘accelerated payment notices’, which demand payment within 90 days unless a settlement is reached.
There are 1,300 past and present partners in the scheme, including chief executive of Centrica Sam Laidlaw and Dame Clara Furse of the Bank of England’s Financial Policy Committee, and all of them could be expected to pay back the full tax owed by as early as January.
There is the potential for individual bills to run into millions depending on the size of the initial investment, with the minimum initial sum for the scheme believed to have been £36,000.
During the next 18 months, HMRC is planning to issue accelerated payment notices to 33,000 individuals and 10,000 businesses who have participate in arrangements that HMRC considers to have been avoidance schemes. It’s believed that over £7 billion of unpaid tax is currently owed by investors.
Last month, investors in Ingenious Film Partners 2 received a letter from HMRC advising them that the opportunity to settle would be withdrawn on October 31 before a tax tribunal hearing about the scheme.
Participants in the scheme became directors of partnerships that made losses that could then be offset against other income, cutting their tax bills. Ingenious denied that it was a deliberate tax avoidance measure.
Recipients cannot appeal against a notice, but they can request that HMRC reconsider the amount in question and extend the deadline for payment by up to 30 days. Late payment, meanwhile, could incur a penalty of around 5 per cent, with those who’re unable to pay encouraged to contact HMRC.
Ingenious, which has funded noted films such as Life of Pi and Avator, send through letters to investors in July warning them to expect contact from HMRC, who have in turn said that taxpayers remaining in avoidance schemes are ‘being given a last chance to withdraw and settle’.