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Accelerated Payment Notice

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Introduction to APN’s

The Accelerated Payment Notice (APN) is a piece of legislation that was introduced to target taxpayers who have used legal tax avoidance schemes to shelter money.

A large number of business and Individuals in the United Kingdom who benefitted from tax gains via the Disclosure of Tax Avoidance Schemes (DOTAS) are now receiving Accelerated Payment Notices (APNs) which usually demand payment within a 90-day deadline period.

These demands offer no right of appeal and will cause a lot of companies in receipt of these notices to become insolvent as they struggle to meet the tax liability.

The accelerated payment provisions give HMRC the power to demand upfront payment of any disputed tax associated with avoidance schemes by issuing an APN. Previously, HMRC had to win a tribunal case before it could demand disputed tax.

HMRC have issued more than 60,000 accelerated payment notices and have collected over £3bn of tax since they were introduced in July 2014.

The provisions currently apply to:

Income Tax | Capital Gains Tax | Corporation Tax | Inheritance Tax | Stamp Duty Land Tax (SDLT) | Annual Tax on Enveloped Dwellings (ATED)

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If you have been served with an APN payment notice and are concerned that you may not have the money that is being demanded, fear you may have to declare yourself bankrupt, re-structure your businesses or go insolvent, speak to our highly-skilled team.

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FAQs

How do I know if I’m subject to an APN?

HMRC publishes a list of schemes where they intend issuing APN’s. A full list can be found here.

If you are aware of a scheme you are or have been involved with it would be prudent to have your tax exposure looked into by your accountant

Where a tax payer identifies a scheme they have been involved with, they should make arrangements to have their tax exposure properly quantified and to set aside the relevant monies to enable repayment of the tax when demanded.

HMRC usually demand payment within a 90 day period. If you decide to challenge the notice and it is unsuccessful, you then have 30 days from the date of rejection to settle the amount outstanding.

It is possible to negotiate a Time To Pay (TTP) provided the repayment period is reasonable. You should seek professional advice in the first instance. Speak to us today for a free and confidential conversation if you feel you may be subject to one of the schemes.

If I challenge HMRC, will I be successful?

To date, HMRC has won five judicial review challenges. Most recently, the Nigel Rowe, Alec David Worrall and Others challenge, involving 156 claimants, who invested in the Ingenious Media plc film schemes, was overturned at the High Court.

The court ruled that the Partner Payment Notices (PPNs) were lawfully issued and the principles of natural justice had been adhered to by the statutory scheme and by HMRC in exercise of the discretion conferred by Finance Act 2014.

In this case, the judge stated that ‘in my judgment, the legislation is not retrospective in the true sense of the word: the requirement to make accelerated payments on account of tax applies only with effect from 17 July 2014.

“For anyone who has had a repayment of disputed tax in the past, that benefit has been enjoyed and the legislation makes no attempt to claw it back (by requiring such a person to account for interest etc.)”.

A number of other appeals have also been heard at the High Court, with similar outcomes, including the cases of:

  • Walapu
  • William Graham
  • Sword Services
  • Vital Nut
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