The government has now collected a record £1 billion in tax payments from individuals using tax avoidance schemes as a result of new collection rules, according to HMRC.
The new rules for accelerated payments, which mean that disputed tax is now paid upfront by avoidance scheme users, were introduced in the Finance Act 2014 . Those who win the dispute over their taxes have the amount repaid to them with interest by HMRC.
People who want to settle their claim instead of paying their accelerated payment notice can do so if they want, and penalties are applied for late payment.
Since the introduction of the new rules in August 2014, the government has issued over 25,000 notices for the payment of disputed tax. This number is expected to have risen to over 64,000 by the end of 2016, and HMRC estimates that it will have collected £5.5 billion in payments by March 2020.
David Gauke, financial secretary to the Treasury, said:
“The government will not tolerate tax avoidance and accelerated payments has been a real game changer.
“It is no longer possible for these individuals to avoid tax and sit on the money while their affairs are investigated. The first £1 billion received in accelerated payments shows that we are turning the tables on those looking to avoid paying their fair share.”
Jennie Granger, director general for enforcement and compliance at HMRC, said that tax avoiders were “running out” of options:
“We are winning around 80% of avoidance cases that people litigate. And many more are settling before litigation.”