INTM620410 - Offshore Receipts in respect of Intangible Property (ORIP): Recovery of tax from related persons: Notice requiring payments

ITTOIA05/Ch2A/S608O

Collection of tax from a relevant person

HMRC would expect the taxpayer to pay the tax due under section 608A. In the event that this does not happen, the legislation gives HMRC the power to collect tax through other means.

Any amount of tax chargeable under section 608A, and the associated interest, due from a taxpayer which remains unpaid six months after the relevant date can be collected from a relevant person.

A person is a relevant person in this context if, at any time in the tax year, they were in the same control group as the taxpayer. The definition of control group can be found in section 608S (see INTM620760).

The relevant date means the date that the amount of income tax became due and payable except where the tax relates to a determination or late filed tax return. In such circumstances, the relevant date means

  • In the case of a determination, the date on which the determination was issued
  • In the case of a late filed tax return, the date on which the return was delivered

Serving a notice on the relevant person

A notice to pay the unpaid tax and interest of the taxpayer must be served on the relevant person. The designated officer of HMRC will decide whether a notice should be served. In determining on which person(s) a notice should be served HMRC will apply a just and reasonable approach in situations where group entities have been sold to third parties.

The relevant person has thirty days from the date the notice is served to pay. Interest is payable on any tax paid late.

The notice must state:

  • The amount of tax and interest that remains unpaid;
  • The date when the tax first became payable; and
  • The relevant person’s right of appeal

The notice must be served on the relevant person before the end of the three years and 6 months period commencing after the relevant date. A notice may be issued to more than one relevant person during this period and issued to a relevant person resident outside of the UK.

Until the tax and interest is paid, enforcement action may be taken against either the taxpayer or the related person, or both. Enforcement action may include the use of international collection powers provided for in the Assistance in Collection of Taxes article of certain DTAs, Mutual Assistance in the Recovery of Debt Directive or Convention on Mutual Administrative Assistance in Tax Matters.