Accelerated Payment Notices
New provisions in the 2014 Finance Act give HMRC significant new powers to demand upfront payment of any disputed tax associated with avoidance schemes by issuing an accelerated payment notice. Accordingly, users of certain tax avoidance schemes may receive an accelerated payment notice (APN) to make an upfront payment of tax.
HMRC has confirmed that an APN can be issued to a person who has used an avoidance scheme if:
- there is a current compliance check into their return or claim, or there is an open appeal
- the return or claim, or the appeal is made on the basis that there is a tax advantage from the avoidance scheme used
and one or more of the following applies:
- a follower notice has been issued
- arrangements disclosed under the Disclosure of Tax Avoidance Schemes (DOTAS) legislation have been used
- the recipient is subject to a counteraction notice under the General Anti-Abuse Rule (GAAR).
The Exchequer Secretary to the Treasury recently commented that:
‘Most people pay the tax that is due, when it is due, so it unacceptable that a minority seek to hold on to the tax they should pay by using avoidance schemes. Accelerated payments will tackle the small minority of taxpayers who are currently able to put off paying tax, sometimes for several years. This will put them on the same footing as the majority of taxpayers who pay their tax up front.’
Taxpayers will be able to continue to make their case to the tribunal or court and, if successful, their money will be returned by HMRC with interest. HMRC has recently begun issuing APNs. We would recommend that anyone who receives an APN contact us as soon as possible.