HMRC issued the following press release in the last few minutes:
The release relates to sums collected using the new Accelerated Payments procedure that requires those using identified tax avoidance schemes to make payment of disputed tax whilst the legality of the arrangement they have used is still being determined.
I have some sympathy with the AP scheme: I would have been happier if a general anti-avoidance principle to tackle such schemes more effectively had been put in place years ago when I was suggesting one.
What I am quite unhappy about is the implication that HMRC think they have 'seized' this money. 'Seizing' has no part in taxation by any party. Tax should not be withheld in such fashion, but nor should it be demanded in such a way. Tax should be due.
If this money has been seized this is going to end in mighty embarrassment to HMRC as refunds are made.
If it has been properly paid, say so.
Language matters, a lot.
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The point, I suspect, is that until the cases are settled no-one knows whether it is due or not.
“Seizing” is therefore the appropriate technical term.
No it isn’t: it is at least a payment on account and not a seizure
It cannot be a payment on account of a liability that does not exist.
The whole point of Self-Assessment is that the tax liability is what the taxpayer has assessed it as, unless and until that is changed by an assessment by HMRC which has become final (perhaps backed by the courts).
An APN is issued when HMRC *think* they will eventually be able to issue a final assessment of that amount, but have not convinced either the taxpayer or the courts.
At the point the APN is issued, therefore, it is for an amount which is not as yet a tax liability.
So it cannot be a payment on account. It is the seizure of an asset, pending resolution of the dispute over ownership.
The law says it is a payment on account
So it is
As ever, you are wrong
“The law says it is a payment on account”
No, the law says it is to be treated as if it were one. That is proof enough that it is *not* a payment on account: you do not legislate that a spade is to be treated as if it were a spade.
As ever, you see the world as you would like it to be rather than as it is.
I might say the same
I’m pretty sure that as a matter of law there hasn’t been a payment. A payment requires an action by the payee; a seizure is the forceful taking of something by an officer of the law. The two do not overlap, even if both can have the same end result (i.e. the settlement of a legal liability).
So basically I think the press release is correct, and the only right way of describing what happaned. HMRC asked for payment; the taxpayer refused; so the amounts were seized. To say it was a payment would be to say the taxpayer did something willingly, which would in turn suggest a degree of co-operation from the taxpayer that hadn’t occurred. As you say, language matters.
The payment is made by the taxpayer
It is not seized
You are factually wrong
Channel 4 had an interesting short documentary this evening focused on some of the guys selling tax avoidance schemes to the privately wealthy. All we need now is SKY to do some real investigative journalism into the Murdoch family tax affairs and all the media will be getting in on the tax story!
Any thoughts or challenges on this HMRC spin-sheet, Richard? For some reason it seems to omit sweetheart deals… https://www.gov.uk/government/news/factsheet-on-hmrc-and-multinational-corporations
Done this morning David
At your request