£3 billion collected already by using Accelerated Payment Notices
HMRC have now laid their hands on £3 billion up front from those involved in tax avoidance, through the use of Accelerated Payment Notices (APNs).
APNs are used where a tax enquiry is in progress or there is an open appeal in relation to a tax advantage and allows HMRC to demand tax up front before the matter is settled. Anyone receiving an APN has 90 days to either pay the tax bill or make representations to HMRC if they consider the notice to be incorrect.
Since the new rules were introduced in 2014, HMRC have issued 60,000 APNs that have led to the £3 billion revenue haul.
The Revenue have recently added a further 15 schemes to their blacklist of tax avoidance schemes, giving a total of 1,181.
Whilst HMRC are quick to point to the five Judicial Review challenges to the accelerated payment rules that they have successfully defended, they give no mention to the U-turn they were forced into earlier this year when they had to withdraw up to 2,000 APNs. These had been erroneously issued in April 2015 to taxpayers who participated in the Montpelier IR35 Manx Partnership arrangements.
Jennie Granger, Director General for Enforcement and Compliance at HMRC said:
“Accelerated payment notices are at the forefront of the Government’s drive to tackle tax avoidance schemes. Recipients must pay the tax owed within 90 days, changing the economics of tax avoidance.
We want to encourage as many avoidance users as possible to come forward and settle their schemes with us.”
In the most recent High Court ruling a challenge was mounted by companies using a tax avoidance scheme, on the basis that HMRC hadn’t properly arrived at the amounts included in the APNs. The Court however found in HMRC’s favour thereby freeing the department to collect £28 million in disputed tax.
This year has seen HMRC win several large scale tax avoidance cases, including a win against Eclipse 35 worth £635 million.
Financial Secretary to the Treasury, Jane Ellison MP said:
“The vast majority of avoidance schemes just don’t work. We’re determined to change the economics of tax avoidance by making it harder for the dishonest minority to cheat the system – collecting disputed tax upfront and tough new sanctions for enablers of tax avoidance will mean people will think twice.”
It is clear that HMRC are determined to keep using APNs mercilessly, especially when the courts continually support their actions. This is very bad news for those involved with tax avoidance schemes as they can end up facing huge crippling tax bills that could even bankrupt them.
>>This is very bad news for those involved with tax avoidance
Its all propaganda. Are you a HMRC “voice”?
I’ll try again…
“This is very bad news for those involved with tax avoidance”
This is a good thing for the majority of people. I have no sympathy for those that end up with “huge crippling tax bills”, as if they’d paid their tax in the first place (rather than trying to avoid it), they wouldn’t be in that situation.
APN’s are very bad news for the rule of law: it’s a case of give us the money and prove you are innocent. HMRC are modern day Dick Turpins.
I have just been approached by a company called Procorre Consultancy that according to the contractor.uk forum is a scheme that could cause a member to fall into the path of a tax avoidance investigation down the line. Any advice?
I see your point david and i agree it
But, hmrc are scum and overspending by government is the national debt, not being under taxed.
Be careful of media hype, tax avoiders did not bust this country, banks and politicians did
Oh, and don’t kid yourselves, this country is bust, there is no way out. remember the half percent interest that was supposed to rocket the economy into stupid prosperity within months – yet another political/bank failure
We are waiting for financial meltdown, the causes of it have not been addresses but hey, lets blame tax avoiders – and make retrospective to hold them to account.
hmrc, bankers, politicians – scum – ruin the country, blame someone else
[quote name=”Gordon Banks”]APN’s are very bad news for the rule of law: it’s a case of give us the money and prove you are innocent. HMRC are modern day [censored] Turpins.[/quote]
In the age of data analytics, it would be interesting to see the demographics of receivers of APNs vs tax demanded. As always I suspect the distribution is skewed towards the archetypal “little man” with neither the time/finances/will to contest possible incorrect demands.
“by making it harder for the dishonest minority to cheat the system”
Unless you are Google, Apple or Vodaphone type multinational. In which case do as you please…
Also, Tax avoidance is not illegal. A great many people who received APNs and have paid them, the schemes they were on have actually not been defeated in the courts.
I used to admire the british legal system…not any more.
The problem with this law is that devastating amounts of money gets taken prematurely as with 100s of people (maybe more) last year. HMRC took and held £millions and held onto it for 7 months before apologising for inconvenience and paid the money back with something like 0.2% interest. Pensions were taken early. ISAs cashed. Houses sold. Not to mention the stress. Cant be undone…
This is my issue with this law.
Or in my own case, they hit with me a demand for tax relating to income earned in another EU country, but have utterly failed to understand the reciprocal taxation arrangements.
A mixture of incompetence and trying it on which necessitated my accountants (and me !!) spending wasted hours doing HMRC’s sums for them 🙁
Of course an effusive apology was received for all the disruption… oh wait, they didn’t !
I don’t blame Hmrc they are just doing their job the real cause is that our government is spending money it doesn’t have, a law to stop that is what we really need