HM Revenue & Customs (HMRC) has launched a crack down on investors using commercial property ventures for tax avoidance purposes.
Members of at least three partnerships that took advantage of the government-backed Business Premises Renovation Allowances (BPRA) scheme have been issued with accelerated payment notices by the taxman to repay tax relief claimed on their investment, according to the Financial Times.
HMRC started issuing accelerated payment notices in August 2014. The notices order individuals to pay a disputed tax amount within 90 days before HMRC challenges the individual’s scheme in court.
HMRC gained the power to issue the notices as part of 2014’s Finance Act.
According to the FT, investors in a Liverpool hotel development, including professional golfer Rory McIlroy are awaiting the notices from the taxman. The promoter of Stanley Dock Regeneration LLP, who are behind the hotel development, has warned investors to expect the tax demands.
The government introduced BPRA to support the regeneration of deprived areas, including Glasgow and Liverpool by encouraging tax-deductible investments in renovating disused commercial premises.
Although the relief is extended until 2017, HMRC added arrangements that exploit BPRA to its ‘spotlights’ list of schemes taxpayers should be wary of.
Graham Webber, head of professional relations at Rebus Investment Group, told the FT: ‘There is a problem brewing with BPRA schemes, and HMRC is using accelerated payment notices as a weapon for pre-emptive strike.’
By http://citywire.co.uk/new-model-adviser/news/hmrc-kick-starts-crackdown-on-commercial-property-tax-avoidance/a797955
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