News: June 2014
Tax avoidance crackdown affects “followers” of failed schemes
There have been a number of high-profile celebrities who have been involved in tax avoidance schemes that have been successfully challenged by HMRC in the courts. This seems to be a deliberate ploy by HMRC to give their current stance on tax avoidance greater exposure in the press, to put off other taxpayers who are considering using tax avoidance schemes.
Controversial new legislation in the latest Finance Bill will require “followers” of schemes that have been successfully challenged by HMRC to amend their tax returns in the light of the court’s ruling, even though that decision may be subsequently overturned on appeal. Taxpayers will be issued with a “follower notice” instructing them to amend their tax return in line with the court ruling, and will be faced with a penalty if they ignore the notice. Furthermore, the tax in question will need to paid in full pending the outcome of any appeal.