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“Pay upfront” demand concerns Ingenious movie schemes
The Revenue has begun to issue its anticipated “pay upfront” demands, which have been the subject of controversy and criticism since being unveiled in the January consultation document Tackling Marketed Tax Avoidance.
The first accelerated payment notice (APN) concerns the Ingenious Film Partnerships 1 and 2 arrangements, both of which have been reported under the disclosure of tax avoidance schemes (DOTAS) regime.
The APN includes a calculation but no explanation of how the alleged “tax advantage” arises or how it has been analysed by the taxman.
“The calculation is straightforward in this instance because HMRC have simply denied all the losses claimed,” said Graham Webber, head of professional relations at Rebus Investment Solutions.
He expects many APN recipients to make representations objecting to the demands, there being no right of appeal.
“The timing is interesting: HMRC have already written to scheme participants, offering to settle but not on favourable terms, before the relevant appeals are to be heard by the First-tier Tribunal in November.
“Given the payment date on the APN is 29 December and the outcome of the appeal is unlikely to be known until 2015, the notice adds to the pressure on the users to settle before the tribunal’s decision is known,” Webber added.
