HMRC will in the next couple of weeks be able to demand billions in taxes from tax avoidance scheme users under its new Accelerated Tax Payments (ATPs) measures. Payment will be required where a scheme is disputed and it was disclosable under DOTAS.
The Times recently leaked a list of celebrities and professionals who have all used the Libery tax avoidance scheme. Liberty scheme users should net HMRC around £1.2 billion however they are far from the only ones affected by ATPs. Ingenious Media has written to warn its 1,300 film tax avoidance scheme users and in a press release says that "the forthcoming legislation permitting HMRC to demand accelerated tax payments in respect of Disclosure of Tax Avoidance Schemes (DOTAS) registered arrangements without any right of appeal is de facto retrospective, indiscriminate and unfair."adding:
"Ingenious has been trying to obtain a definitive ruling on the tax status of its film and games partnerships for many years. The company requested a hearing before the tax tribunal in 2011 to resolve this matter as expeditiously as possible, but HMRC has repeatedly used stalling tactics to delay a hearing.
The matter is now finally scheduled before the tax tribunal in November this year and it is fundamentally unjust to demand payment before the tribunal has given its ruling. Ingenious is proud of its record in financing hit films, including Avatar, Life of Pi and The Best Exotic Marigold Hotel, which have generated more than £1bn of taxable revenue for the UK Treasury, with a further £1 billion of taxable revenue expected over the life of the films."
The Times also reports that even though the Liberty scheme users reported their DOTAS numbers on tax return HMRC has had a systemic failure of not picking up all the cases that it should. By failing to issue enquiry notices within time*, many millions have been lost to the exchequor. Ironically HMRC is currently trying to obtain new powers to dip into tax debtor's bank accounts in order to recover as estimated £98 million in small tax debts. This figure appears to be a drop in the ocean compared to what HMRC may have lost in not following up DOTAS tax returns.
*Discovery in DOTAS cases is limited following the judgment of the Upper Tier Tribunal in HMRC v Charlton, Corfield & another [2012] UKFTT 770 (TCC) : it was decided that the present of a DOTAS number should be enough for an officer of HMRC to be reasonably expected to be aware of an insufficiency of tax.