Some 10,000 businesses that have taken advantage of various tax avoidance schemes can expect to receive letters of demand from HM Revenue and Customs (HMRC), asking for prompt payment of shortfalls in tax revenue, according to law firm Winckworth Sherwood.
The Finance Act 2014 increases the powers at HMRC's disposal, allowing the revenue to issue Follower Notices and Accelerated Payment Notices to around 10,000 businesses believed to have deliberately avoided tax. Tax authorities also have the power to ask for payment within 90 days, said Winckworth Sherwood.
"This is the most significant of the many clampdowns by HMRC on those taxpayers that have engaged in tax avoidance schemes and practices," says Simon Newsham of Winckworth Sherwood.
"Business owners will be naturally concerned when they receive these demands and it is entirely possible that they will not be able to afford to pay straightaway," he said.
Newsham believes businesses that have been guided towards some 800-odd tax avoidance schemes, may well decide to pursue the advisors responsible in court.
"It would not be surprising to see businesses taking legal action against those advisers who sold these products, nor would it be surprising to see businesses collapse following what could be very steep tax demands," he added.
HMRC recently announced that for the tax year ending March, it managed to rake in a record breaking £23.9bn (€29.5bn, $40.3bn) from those who skipped on their taxes, increasing its overall income by 15% on the previous year.