Accountancy Newsletter December 2015
DAC Beachcroft's Accountancy newsletter features topical news and insights for our clients and contacts.
Published 3 December 2015
Most of our readers will be familiar with the accelerated payment notices (APN) regime introduced by the Finance Act 2011. This has enabled HMRC to seek immediate payment of unpaid tax in the region of £7.5bn through APNs. Please see our earlier newsletter, here and here for full details.
The latest statistics released by HMRC indicate that over £1bn of this figure has already been collected. HMRC has already served over 25,000 APNs and expect to have served 64,000 by the end of 2016.
This is consistent with earlier indications that, despite a slow start, HMRC's APN campaign has picked up pace and may conclude earlier than projected.
The Financial Services Compensation Scheme announced in September 2015 that it had started reviewing tax avoidance advice claims. Because such schemes were often Unregulated Collective Investment Schemes (UCIS), the FSCS can make awards of compensation to investors who received poor advice from financial advisers who ware no longer trading.
The FSCS has indicated that it has approximately 150 current claims, and the timing of this announcement suggests a link between the demands for tax being served on investors by APNs, and claims being made against financial advisers. Rebus, a claims management company representing claimants, and which is particularly active in the tax avoidance area, has lodged claims to the FSCS, and estimates (perhaps over-enthusiastically) that there may be up to 30,000 further such claims in the marketplace.
As many IFAs advising in this area will have ceased to trade, the claims will fall to the FSCS to pay. Where appropriate the FSCS will seek reimbursement via claims against liquidators and insurers.
There are two areas of risk to bear in mind:
This may be a new area of exposure for insurers. Whilst HMRC's campaign continues, triggering claims against advisers whether or not they continue to trade, it will take some time for any claims to filter through.