Measures to tackle tax avoidance

By Simon Wilks

Most of the budget measures on avoidance were expected. The most significant is confirmation that the ‘Accelerated Payments’ provision will become law in FB 2014. The Chancellor indicated this will bring in £4bn over 5 years. The measure will apply to those who engage in DOTAS planning and eventually to those affected by judicial rulings designated as relevant to taxpayers’ positions.

The potential revenue is very uncertain and the money might ultimately have to be repaid - with interest.  Moreover, many will worry that this measure sets a concerning precedent that tax payers can't pursue their legitimate cases through the courts. 

Combined with operational reorganisation within HMRC to increase resources, the measure underlines the determination of the Government and HMRC to deal with avoidance and reduce the number of open ‘avoidance cases’ – the current figure is quoted as 65000. It is no surprise that HMRC's avoidance ‘yield’ target will be increased by £1.6bn (indeed HMRC  predicts the additional tax yield from the Accelerated Payments measure will be £1.52bn alone).