The late payment interest was originally designed as simple recompense to the Treasury, but HMRC’s rigid approach to the charging of interest has become a millstone for many – particularly those now wishing to settle the tax on avoidance schemes where the tax relief goes back many years and the result can be an interest charge equal to, or more than, the tax. Following criticisms of HMRC’s approach in Sir Amyas Morse’s review of the loan charge, the government has agreed to review future policy on interest rates within the tax system and report the results to Parliament by 31 July 2020. The government should take this opportunity to consider offering a general amnesty for investors in failed avoidance schemes with specific provision with regards to interest, perhaps restricting it to a maximum percentage of the tax at stake.
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The late payment interest was originally designed as simple recompense to the Treasury, but HMRC’s rigid approach to the charging of interest has become a millstone for many – particularly those now wishing to settle the tax on avoidance schemes where the tax relief goes back many years and the result can be an interest charge equal to, or more than, the tax. Following criticisms of HMRC’s approach in Sir Amyas Morse’s review of the loan charge, the government has agreed to review future policy on interest rates within the tax system and report the results to Parliament by 31 July 2020. The government should take this opportunity to consider offering a general amnesty for investors in failed avoidance schemes with specific provision with regards to interest, perhaps restricting it to a maximum percentage of the tax at stake.
If you are not a subscriber, subscribe now to read this content.
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