Accelerated Payment Notices

Following the release of a list of tax avoidance schemes by HMRC recently, it is reported that around 45,000 individuals and companies will be issued with Accelerated Payment Notices (APNs) requiring them to repay tax that HMRC believes is owed from investing in tax avoidance schemes. Through the new strategy HMRC aims to recover £7bn in unpaid tax.

APNs were announced following the Finance (No2) Bill 2014 and require tax liabilities, that HMRC believes are owed, to be paid upfront within 90 days of the notice being issued. Previous procedures when individuals were subject to a tax investigation meant that tax was not owed until the investigation into tax affairs had been concluded.

However, the new guidelines represent a power shift in favour of HMRC in its clampdown on tax avoidance. Once issued with an APN, individuals are required to pay upfront prior to commencing an appeal process through tribunal.

If the individual is successful in their tribunal appeal, then HMRC will pay a refund, although this process could in some circumstances take several years.

The move has raised concern among many commentators and organisations, including the Institute of Chartered Accountants in England and Wales (ICAEW). Many individuals who are unable to pay following receipt of an APN may be forced into bankruptcy.

For many who have invested in tax avoidance schemes the net is closing in rapidly as HMRC continues to claw back unpaid tax. If an individual believes they may be issued with an APN, then the time to act is now. Once the APN is received, payment will be required within 90 days.

If you fear that you may receive an APN from HMRC over the coming months then you should seek advice from a tax disclosure professional immediately.

For more information and to speak to Forths in complete confidence call 0113 387 5670 or fill out and Enquiry Form .