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Finance Act 2014

Accelerated payment notices

49.Section 219 explains the circumstances in which an accelerated payment notice may be given.  Three conditions must be met.

50.Subsection (2) sets out Condition A, which stipulates that there must be a tax enquiry or a tax appeal.

51.Subsection (3) sets out Condition B, which stipulates that a tax advantage has been claimed that results from the arrangements in question.

52.Subsection (4) sets out Condition C, which has three alternatives.  Any one of these is sufficient to trigger a notice (provided that Conditions A and B are also satisfied) but more than one of them may be relevant and may be specified in the notice.

53.Subsection (5) explains what is meant in subsection (4) by “DOTAS arrangements”.  The starting point is that HMRC has issued a Scheme Reference Number (SRN) under section 311 of FA 2004.  In order to do so, HMRC must have received a disclosure of notifiable arrangements or a notifiable proposal under Part 7 of FA 2004, or must have successfully taken proceedings to require such a disclosure.  Subsection 5(c) addresses the situation under section 312(2)(b) of FA 2004 where the promoter must also provide the SRN to clients of arrangements that are substantially the same as those that were the subject of the notified arrangements or notified proposal.

54.Subsection (6) provides that the DOTAS criterion ceases to be satisfied if HMRC gives notice under section 312(6) of FA 2004 that a promoter is no longer required to notify a client of the SRN.

55.Section 220 sets out the contents of an accelerated payment notice given while an enquiry is in progress.

56.Subsection (3) requires that the amount of any accelerated payment must be determined by a designated HMRC officer.

57.Subsections (4) and (5) set out how the amount is to be determined.  For those cases linked to a notice under Chapter 2, the amount is the same as would be required if the taxpayer were to have taken the necessary action to settle the dispute.  For cases subject to the GAAR, the amount will be the same as specified in the GAAR counteraction notice.  Where DOTAS is the only criterion, the amount must be determined to the best of the designated officer’s information and belief.

58.Subsection (6) deals with the situation where more than one Condition C under section 219(4) may be relevant.  In such a case, HMRC must stipulate which of them is being applied to determine the amount of the accelerated payment.  See section 227(5) and (6) for circumstances where HMRC subsequently amends a notice where more than one Condition C initially applied, but the Condition specified under this subsection or section 221(5) falls away, and an alternative Condition C is still applicable.

59.Section 221 sets out how an accelerated payment notice is given for cases that are under appeal.  The ‘disputed tax’ is all or part of the tax charged in the assessment or determination, or arising in consequence of a conclusion stated in a closure notice that is the subject of the appeal.

60.Section 222 explains how representations may be made to HMRC about an accelerated payment notice, the time limit for making those representations, and what HMRC must do in response.

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