Since 2014, HMRC has issued over 75,000 Accelerated Payment Notices (APNs) covering the entirety of the tax avoidance schemes it had under investigation before the new rules were introduced and, in the process, has collected over £4 billion in tax.
Most observers would agree with HMRC that this can be seen as a success in terms of the idea behind APN’s – which was to get money to the Treasury up-front before any conclusion is reached as to whether the tax avoidance schemes actually worked or not. HMRC, clearly fortified by its success so far, has indicated that it has a further 600 schemes in its sights and an additional 80,000 cases under investigation.
Shooting first has clearly had the desired effect….but not without some misfiring.
It transpires that 10% of APN’s were not upheld on review: bearing in mind the number of APN’s and that the review is carried by HMRC (so may not be viewed as fully independent) this indicates that around 7,500 businesses and individuals received serious and significant tax demands that were unlawful.
This aligns with our experience at Trident, where we have been asked to review a large number of APN’s for businesses and individuals and have found a number of examples of errors. Most commonly, we found that HMRC had failed to follow the rules in relation to time limits in connection with their enquiries and the issuing of formal documentation. This requires close examination of all the paperwork and an understanding of the sometimes complex administrative rules.
If you, your business or one of your clients are in receipt of an APN, we would strongly recommend checking that the rules have been properly observed. Whatever view you take on the rights and wrongs of tax avoidance schemes, payment of tax can only be demanded by HMRC when it is due in accordance with the law; and the evidence suggests that HMRC gets it right most…but not all…of the time.
If you would like to discuss any APN or related ‘follower notice’ issues, please contact us.