This Content Was Last Updated on November 5, 2015 by Jessica Garbett

 

Contributed by ACCA, in their own words

New legislation will place greater emphasis on previously decided tax cases.

Legislation is to be introduced that will give HMRC the power to issue a notice to a taxpayer to the effect that a previously decided case also determines their dispute, and that they should therefore settle their own dispute. If the taxpayer does not make upfront payment of the tax in dispute, there will be at risk of a penalty.

This measure will affect those taxpayers who have sought tax advantages through tax avoidance schemes, and in particular those schemes marketed to large numbers of people, so that one judicial ruling is likely to have a wide application.

Under the self-assessment regime, a taxpayer can usually claim the benefit of the tax advantage created by the scheme as part of their self-assessed tax liability and therefore retain the cash benefit while the dispute is resolved. However this new measure puts these taxpayers on the same footing as those that claim a repayment, because currently repayments can be withheld by HMRC while a dispute is resolved. In future the disputed tax will sit with the Exchequer whether the taxpayer is in a repayment or a liability situation.

It is proposed that these measures will have effect from the date that the Finance Bill 2014 receives Royal Assent, and will be applicable to all cases where there is an open enquiry or open appeal on or after the day of Royal Assent and where there has been or will be a relevant qualifying judgment.