HM Revenue & Customs (HMRC) has turned on the tap for accelerated tax payment notices by posting out more than 40,000 demands.
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The government aims to recoup £7.1 billion of tax sheltered in avoidance schemes by a change in the law.
Now, anyone investing in an avoidance scheme must pay the tax they hope to save up front and then reclaim the money from HMRC in a reversal of the law.
The first notice was in the mail on August 27, and HMRC intends to send out 43,000 over the next 18 months.
Three-quarters will go to individual taxpayers and the rest to businesses.
Accelerated payments
David Gauke, financial secretary to the Treasury, said: “This was one of the missing pieces of the government’s tax avoidance jigsaw.
“Accelerated payments will come down hard on those intending not to pay the right amount of tax while the majority of taxpayers having nothing to fear.
The final piece of the puzzle will be giving HMRC the power to take unpaid tax straight from bank accounts.”
The notices will go to wealthy individuals who have invested in a registered tax avoidance scheme on their tax returns.
On receipt of the notice, any tax due is expected to be paid within 90 days.
HMRC has published a list of 1,200 schemes reported under tax avoidance disclosure rules.
All the notice recipients are involved in one or more of the schemes.
Tax deferral
The new rules came about because HMRC was taking an average 10 years to identify and outlaw illegal tax avoidance schemes.
During that time, investors did not pay any tax on that money, but HMRC had to pay huge costs to take ruling the scheme illegal through the courts.
Many tax avoidance ploys were dubbed as ‘tax deferral’ rather than tax avoidance scheme as their members eventually had to pay tax plus interest and penalties on the money they had saved.
Many celebrities and sports personalities are allegedly included in the HMRC accelerated payment hit list.
They include Gary Barlow and Mark Owen, of pop group Take That, athlete Colin Jackson and stand-up comic Jimmy Carr.
Conservative Geoffrey Cox, MP for Torridge and West Devon, allegedly invested in one scheme currently being investigated by HMRC.
Mr Cox has not commented on the allegation.
“We hope that the notices will make some taxpayers review how untenable their position over paying tax has become,” said the spokesman.
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