March 19th, 2014 / Insight posted in MKS Comments

Budget 2014: Tax avoidance – tax to be paid upfront

“The Chancellor has confirmed that measures will be introduced to collect tax upfront where registered tax avoidance schemes are used,” says Tim Stovold, tax partner at Kingston Smith. “This means that individuals who have chosen to implement schemes will face years of uncertainty whilst these schemes are litigated in the Courts, before they are able to claim their tax refunds. This will make these avoidance schemes unattractive and will continue the Chancellor’s wish to kill off the marketed tax avoidance market. There will be pressure on promoters of these schemes to find ways to avoid falling within regulations which give rise to the obligation to report the schemes to HMRC. But there are severe punishments for failing to report if required, so promoters taking this approach will themselves be taking a big risk.”