HMRC have today issued a 66 page guidance note on “Accelerated Payments”, this is the method by which HMRC expect to collect £7.1 Billion of unpaid disputed taxes.
These taxes in the main relate to what are widely described in the press as tax avoidance schemes and apply in all cases where a DOTAS scheme reference number was given.
Royal assent has been given to the 2014 Finance Act today so the programme of sending out demands for disputed tax will begin very soon. The guidance notes tell us that this will be phased between now and 31 March 2016. The notices will set out the amount of payment required (this should equate to the tax avoided) and set out a time limit for making the payment.
The payments cannot be postponed and the time limit will be 90 days from the date of issue of the notice.
The only comfort here is that the guidance does mention that taxpayers may enter into a payment arrangement with HMRC (but unfortunately offers no guidance on what terms might be acceptable), but any such arrangement would need to be agreed and in place before the expiry of the 90 day payment period.
Any failures to pay on time will incur late payment penalties charged at 5% of the unpaid amount on the first day after the 90 day payment period expires a further 5% on any amount still unpaid five months later and a further 5% on any amount still unpaid 11 months later. Given these harsh penalty charges it is imperative that anyone receiving such a notice and needing time to pay seeks help as soon as possible, we handle such things routinely here at Sedulo and will be happy to assist anyone affected by this.