HMRC widens APN applications

HMRC is now targeting over 1000 different types of tax planning schemes for the issuing of Accelerated Payment Notices (APN’s).

HMRC has recently added another 15 schemes to the list of those subject to the measures bringing the total to 1,181. HMRC continues to aggressively employ the tool, despite successful legal challenges, including a number of judicial reviews.

Paul Noble, Tax Director, Pinsent Masons, said: “HMRC is determined to persist when it comes to use of Accelerated Payment Notices, despite increasingly strong resistance from those receiving such notices.  HMRC and HM Government have already “booked” the revenue that they anticipate that these will generate and therefore will continue with their strategy of issuing notices.”

APN’s demand upfront payment of disputed tax where an avoidance scheme if suspected, prior to a formal hearing. The tax must be paid within 90 days without appeal. Pinsent Masons says that the widening of APNs’ application comes despite a number of setbacks and legal challenges associated with their use over recent months.

Noble continued, “Challenges in the courts have little impact, HMRC is continuing to employ the tool aggressively, adding more targets. Concerns are justified, they allow HMRC to demand and receive payment in advance before arguments are heard and determined. Recipients can end up facing bills for many millions, some even face bankruptcy.”

HMRC have recently been forced to back down on a number of notices relating to two schemes, as the conditions for issuing them had not fully been met. Earlier this year, HMRC admitted that 2,000 paid up front tax demands that should never have been issued.

Noble concluded, “These successes show that genuine concerns over the lawfulness of these notices are being taken seriously. HMRC is quite clearly adopting a policy of issuing a notice and then asking questions later.”