HM Revenue & Customs (HMRC) has brought in over £2bn from tax avoidance scheme users since a rule change in 2014 allowed it to collect money upfront

Hayley Kirton
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Accelerated payment notices let the tax authority collect cash upfront (Source: Getty)

HM Revenue & Customs (HMRC) has collected over £2bn from tax avoidance scheme users since 2014, thanks to a rule change that makes it easier to collect disputed amounts upfront.

The UK's tax authority today revealed that its use of accelerated payment notices, which were introduced under the Finance Act 2014, had allowed it to collect cash without having to wait until lengthy investigations into tax affairs had concluded.

David Gauke, financial secretary to the Treasury, said:

"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."

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Once HMRC has issued an accelerated payment notice, the taxpayer has 90 days to fork over the amount due or contest to the taxman if they think the notice is incorrect.

HMRC sends out more than 3,000 accelerated payment notices per month and has issued more than 41,000 since they were introduced.

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"Accelerated payments continue to turn the tables on individuals looking to avoid paying their fair share of tax," added Jennie Granger, director general for enforcement and compliance at HMRC. "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."

However, John Cullinane, tax policy director at Chartered Institute of Taxation, remarked: "It would be good to know how successful it has been in persuading people who have got into schemes to settle and in deterring people from entering new schemes in the first place, which might otherwise take years to go through the courts."

Recent calculations of the UK's tax gap, which refers to the difference between the amount HMRC should collect each year and the amount it actually collects, peg it at £34bn.

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