HM Revenue & Customs (HMRC) has issued an interesting statement regarding tax avoidance schemes putting taxpayers on notice that changes may be about to happen.
What’s been said?
HMRC have issued the following statement:
Changes to processes /litigation strategy.
It may be the case that over time, legislation and / or its interpretation may change. We can therefore only commit to the terms as stated above/provided in this email / letter if the settlement is completed within a reasonable time from the date of this email/letter .
What does it mean?
HMRC revise their Settlement Terms on a regular basis. As time goes on, not surprisingly the terms are less and less generous to the taxpayer. If a taxpayer has already registered their interest in exploring the terms of any exit, then the original terms will be honoured even if a Settlement Agreement has not been reached/signed.
When taxpayers seek to exit from tax schemes it takes time. In my experience it can take up to nine months from the first contact to reaching a Settlement Agreement. Payment terms under a Time To Pay Agreement may mean that the debt may not be cleared for sometime later.
It takes time to gather all the relevant information and documentation as often many years have passed and some scheme providers are no longer around to assist. HMRC no longer accept “no names” discussions. HMRC require the taxpayer(s) to be identified.
So what is the advice to taxpayers?
Such negotiations with HMRC are on a “without prejudice basis”. “Without prejudice” means the taxpayer could simply walk away and not settle.. Therefore registering your interest sooner will ensure that the taxpayer(s) get the most favourable terms. If you wait, the terms may change and the Settlement Agreement may cost more.
Anyone wanting to explore their options can contact me at firstname.lastname@example.org or Andy at amaxfield @hwca.com in the first instance. If instructed by you, we can quickly register you with HMRC and commence the process.