Accelerated Payment Notices (‘APN’s) were introduced in 2014 and are used by HMRC to claim upfront payments of tax held in tax avoidance schemes. The recipient is required to pay the amount of wrongfully avoided tax to HMRC within 90 days of receipt.
The powers HMRC have to claim these monies is a contentious issue and has caused much trepidation for many company directors. The introduction of ‘APN’s’ has affected the cashflow advantage for companies who took part in the tax avoidance schemes, as the tax could remain unpaid.
HMRC have already recouped over £3 billion of taxes to date and its envisaged this will be nearer to £5 billion by March 2020. There is no opportunity to appeal an ‘APN’ with HMRC. When it is issued it is likely to cause disruption to the growth of new companies, whilst those already struggling to survive are likely to be faced with Insolvency.
Who may receive an ‘APN’?
HMRC can issue an ‘APN’ either when a taxpayer has been involved in a tax avoidance scheme (disclosed under the Disclosure of Tax Avoidance Schemes ‘DOTAS’), received a Follower Notice (arising from their participation in the Scheme) or if caught by the General Anti Abuse Rule (‘GAAR’).
Follower notices
Follower notices are issued to a taxpayer when HMRC has received a judicial ruling in its favour. If a taxpayer is issued with an ‘APN’ and doesn’t make payment, they can incur a penalty of anything up to 50% of the disputed tax sum.
What do I do on receipt of the ‘APN?’
If you feel that the requirements have not been met, it is imperative that you make the representations within the specified period. Should HMRC not withdraw the ‘APN’, you will have 30 days from the date of their decision to pay the amount specified or the revised amount applicable. It is important to communicate precisely and clearly with HMRC when in receipt of an ‘APN’ and provide full details of your company’s tax situation. Always seek professional advice on the best way to proceed.
No right of appeal
There is no basis on which an ‘APN’ can be appealed with HMRC, but there are limited grounds on which you can make a representation, either on the basis that the amount specified is incorrect or if the conditions required for the issue have not been met.
HMRC have made mistakes in the past when issuing ‘APN’s’ to individuals. After a judicial review late last year, HMRC had to withdraw over 2,000 issued ‘APN’s’ as they were not notifiable under the ‘DOTA’s’ as HMRC had claimed.
How will I know if I am going to be issued with an ‘APN’?
An ‘APN’ is usually issued in situations where the taxpayer has used a scheme to avoid paying the full amount of tax. You will be made aware of your forthcoming ‘APN’ either by receipt of a letter or a ‘Follower Notice’ from HMRC which is sent several weeks prior to issuing the ‘APN’ to you.
Next Step
If you want to find out anything further about this topic then please feel free to call me on 0330 236 9930, 0330 236 9938 or 07961 116321. All conversations will be in strict confidence. You can also email me vee@navigatebr.com
This article is for information and interest only. It is not a substitute for full professional advice, which will take in to account the specific and individual circumstances. Navigate Business Recovery Limited cannot accept any responsibility for any loss arising as a result of any person or organisation acting or refraining from acting on any information.
Leave a Reply