OVER £2bn has been collected by HM revenue & Customs in accelerated payment notices, as the taxman continues its battle against aggressive tax avoidance schemes.
HMRC gained over £1bn in 2015 via APNs, having hauled in a similar amount in 2014, the first year in which it gained powers to collect disputed tax upfront.
The government department uses the notices to demand tax that it believes is owed before the underlying dispute has been adjudicated on by an independent tribunal or court.
Taxpayers then have 90 days to pay HMRC the fee demanded, but are not allowed to appeal the decision. In an announcement, the taxman said that it has an 80% success rate when APN cases get to court.
In January, HMRC was forced to withdraw 2,000 APNs after admitting the demands should never have been issued. The U-turn related to taxpayers who participated in the Montpelier IR35 Manx Partnership arrangements, with HMRC originally issuing notices to taxpayers involved in the scheme in April 2015.
Despite this potentially embarrassing reversal, HMRC is confident that APNs are successfully clamping down on tax avoidance.
“We will not tolerate tax avoidance and accelerated payments has been a real game changer,” explains David Gauke, financial secretary to the Treasury.
“HMRC already wins the vast majority of cases that go to court and now HMRC has taken more than £2bn from tax-avoiders who would have otherwise benefitted from that cash while they were being investigated.
“It should be absolutely clear to anyone who is tempted by these schemes that tax-avoidance does not pay.”
Jennie Granger, director general for enforcement and compliance at HMRC, said that her department is now issuing 3,000 APNs every month and a total of 41,000 payment notices have been issued since 2014.
HMRC predicts that it will have completed issuing APNs by the end of 2016, which will bring forward approximately £5bn in payments for the Exchequer by March 2020.
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The firm says that the U-turn 'does not alter the need for a fundamental review of the way we tax work' and that the current tax system is in need of reform