The measure

The Government will remove the cash advantage from certain tax avoidance disputes by allowing HMRC to issue ‘Pay Now’ notices to certain taxpayers. These will initially be issued to taxpayers who have used tax avoidance schemes which have been defeated in the courts. The Government will also consult on the scope for widening the criteria for ‘Pay Now’ notices in avoidance enquiries.

Who will be affected?

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


The new legislation will take effect from Royal Assent to Finance Act 2014, which is expected in mid-July 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 ‘defeated by the courts’. The proposal is logically linked to the proposal on ‘follower penalties’, covered separately.

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