HMRC Ordered to Withdraw APNs

HMRC has been forced to withdraw hundreds of Accelerated Payment Notices (APNs).

The Accelerated Payment Notices (APNs) have been withdrawn following a judicial review. APNs were introduced by HMRC as a tool to recover amounts it believed to be unpaid tax before the taxpayer could dispute the demand.

Once a taxpayer has received an APN from HMRC they have 90 days in which to repay the amount HMRC believe to be owed in tax. The scheme caused controversy when it was announced in 2014, hailed by many as an aggressive tactic that could leave many taxpayers subject to bankruptcy.

Taxpayers are able to appeal an APN via a two stage tax tribunal. If successful at a Tier 2 tribunal, the taxpayer would be entitled to a refund from HMRC. However, there is no definitive time scale on how long the appeal process might take, and certainly no guarantees of success. If unsuccessful at Tier 1, the taxpayer has no further right to appeal the APN.

The recent development regarding the withdrawal of APNs relate to a challenge lodged by a law firm, which made arguments against the legitimate use of APNs on a number of grounds. However, specifically, the challenge related to APNs received by users of offshore Employee Benefit Trusts.

This is the second time in 2016 that HMRC has been forced to withdraw APNs. Earlier this year, HMRC was forced to withdraw around 2,000 APNs served on users of tax avoidance schemes promoted by an Isle of Man based tax advisory firm.

HMRC claims to have recovered almost £2.5bn in unpaid tax in the UK after issuing in excess of 50,000 APNs since they were introduced. Despite the recent judgement, it remains to be seen how successful challenges to APNs will be. Individuals do have the right to appeal should they receive an Accelerated Payment Notice from HMRC.

We would encourage anyone who believes they may have unpaid tax liabilities to clarify their circumstances urgently. Should you receive an APN from HMRC you will have to repay their tax demands in full within 90 days.

We assist individuals in making a voluntary disclosure of unpaid tax to HMRC or when they face a full tax investigation.

To discuss your circumstances in confidence with our team of tax disclosures professionals, call us on 0113 387 5670 or full out an Enquiry Form and we’ll contact you directly.