The Chartered Institute of Taxation (CIOT) has called for controversial proposals to tackle the backlog of outstanding mass marketed tax avoidance cases going through the courts to be used only as an ‘emergency measure’ applying in tightly defined categories of cases for a limited period of time.
The professional body for tax advisors made the comments in its response to an HMRC consultation on the proposals.
HMRC hopes to link together cases that are deemed to be similar, so that if a court ruled against one taxpayer, not only that taxpayer but all others deemed to have ‘follower cases’ would have to pay straight away the tax HMRC believe is due. The taxpayers would get the tax back if they pursued the case and ultimately won.
CIOT says that the Government’s intention is to encourage taxpayers to either not pursue or to expedite cases which the Government believe are bound to fail. Often the cases will involve hundreds of taxpayers using the same scheme or a close variant of it from the same company.
CIOT has also expressed strong opposition to plans to extend the new rules, which would see the loss of safeguards such as rights of appeal, to all schemes notified to HMRC as having characteristics associated with avoidance schemes.
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