The government’s crackdown on tax avoidance has seen more than £2bn in disputed tax collected by HM Revenue and Customs, it has announced.
New statistics show new Accelerated Payments notices, which are part of rules introduced by the government in 2014, have led to the collection of more than £2bn collected from users of tax avoidance schemes.
The notices mean people have to pay disputed tax up-front while their tax affairs are investigated, instead of waiting until the investigation has been concluded.
HMRC said given that it wins 80% of cases that go to court, the move eliminates the financial advantage that tax avoiders have enjoyed in the past.
David Gauke, financial secretary to the Treasury, said: “We will not tolerate tax avoidance and Accelerated Payments has been a real game changer.
“HMRC already wins the vast majority of cases that go to court and now HMRC has taken more than £2bn from tax-avoiders who would have otherwise benefited from that cash while they were being investigated.
“It should be absolutely clear to anyone who is tempted by these schemes that tax-avoidance does not pay.”
Accelerated payments were introduced in the Finance Act 2014 and National Insurance Contributions Act 2015.
An accelerated payment notice is issued to a taxpayer to collect outstanding tax. Once they receive the notice, they have 90 days to pay or make representations to HMRC if they think the notice is wrong.
HMRC said it is now issuing more than 3,000 notices a month, and has issued more than 41,000 notices since Accelerated Payments were introduced.By the end of 2016, HMRC expects to have finished issuing notices, bringing forward more than £5bn in payments for the Exchequer by March 2020.
Jennie Granger, director general for enforcement and compliance at HMRC, said: “Accelerated Payments continue to turn the tables on individuals looking to avoid paying their fair share of tax.
“Those who take part in tax avoidance now have to pay up-front and dispute later.
“It really is time to get out of avoidance – HMRC wins the vast majority of cases that people litigate, with many more settling before litigation.”