What are Accelerated payment notices (APN)?

In the past when HMRC alleges that you owe tax. it’s up to them to prove that this is the case and payment for the outstanding tax is due once you have exhausted the appeal process

As you imagine if HMRC comes to you saying “you owe us some tax” it make sense to try and drag the appeal process out. This is what a lot of the perceived tax avoidance cases have done. The Murray Group Holdings and others v HMRCis a classic example of this. Starting in 2012 at the time of writing there still isn’t an outcome or any tax collected.

So in the Finance Act, 2014 legislation was introduced which gives HMRC the power to collect payment of Tax under investigation even if the assessment is still ongoing.

In a nutshell, the reversed the order of presumed guilt, in the past, it was up to HMRC to prove that the tax is owed, APN’s now make it up to the taxpayer to prove that the tax isn’t owed.

While there are doubts about the legality of APN’s it was a masterstroke from HMRC as it has taken the safety net of sitting on the cash and waiting to see if HMRC will dispute the tax avoidance process.

Conditions which have to be meet to trigger an APN

APNs are a powerful tool for HMRC is use to try and slow the growth of Tax Avoidance in the UK but there are rules which the revenue must follow before they issue
Accelerated payment notices.

Paying an APN

The tax due under an APN has to be paid within 90 days of issue.

Once you receive an APN you have 90 days in which to pay it. While you can not appeal an APN you can make a representation to HMRC on the validity of the Accelerated payment and you can also question the amount of tax that HMRC have calculated that you owe them. You have 90 days to make any representations.

While you may think that you don’t have many options once you’ve revived an APN it is still a good idea to make a representation to HMRC, there has been cases where they have had to reverse an APN decision. They had to withdraw 2000 Accelerated Payment Notices from the uses of the Montpelier tax scheme

By Law, HMRC must consider the representation and will confirm the outcome.

The APN Factsheet.

Before they issue an APN you will receive a “factsheet” explaining how the system works. If you have one of these you may want to get in touch with us.