The measure

The Government consulted over the summer on proposals announced at Budget 2013, to introduce new powers requiring taxpayers to amend their tax returns in cases where a tax avoidance scheme they have used has been shown not to work in another party's litigation, and to face a new penalty if they pursue litigation on the same scheme and are likewise unsuccessful. The Government will now act on those proposals and will also link them to the 'Pay Now' notices also introduced in this Autumn Statement.

Who will be affected?

Taxpayers who have used tax avoidance schemes which have been lost in the courts.

When?

2014, presumably April 2014.

Our view

It is understandable that the Government wishes to collect tax promptly after tax avoidance schemes have been shown to fail. The points to resolve include at what stage of litigation the scheme is regarded as 'shown not to work in another party's litigation'. The proposal is logically linked to the proposal on 'Pay Now', covered separately.




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