Have you received an APN and you do not know what to do?

Accelerated payment regime was introduced on 17 July 2014 as part of HMRC’s arsenal to tackle tax avoidance schemes.

The legislation means that those who have used a tax avoidance scheme may have to make a payment of the amount that relates to their use of the scheme – before the final amount has been agreed or determined. Such a payment is known as an accelerated payment, or in the case of members of a partnership, it’s known as an accelerated partner payment. 

According to HMRC, a tax avoidance schemes is a “set of arrangements that try to use tax legislation to gain a tax advantage that is not intended by the legislation.”

There are strict rules for issuing an Accelerated Payment Notice (APN) and we have successfully appealed on behalf of clients against invalid APNs issued by HMRC. The rules are as follows: 

HMRC may send an accelerated payment notice to a person who has used an avoidance scheme if: 

• There is a current compliance check into their return or claim (or for partnerships, into the partnership return or claim), or there is an open appeal (Condition A)
• The return, claim, or appeal is made on the basis that there is a tax advantage from the avoidance scheme used (Condition B) 

and one or more of the following applies (Condition C) 

• HMRC have given the person (or the nominated partner) a follower notice 
• The person (or the partnership) has used arrangements that are disclosable under the disclosure of tax avoidance schemes (DOTAS) legislation 
• The person (or the partnership) is subject to a counteraction notice under the general anti-abuse rule (GAAR) 

How HMRC work out the amount of an accelerated payment?

The amount payable will be the amount relating to the tax advantage that the use of the avoidance scheme tries to achieve. The legislation refers to this as the “understated tax” in cases where there is a current compliance check, or the “disputed tax” in cases where there’s an open appeal. In the case of an accelerated partner payment, the legislation refers to this as the “understated partner tax”. 

HMRC claim that they will calculate the amount to the best of their information and belief but we have often seen grossly excessive and completely arbitrary figures stated in APNs.

If you have received an APN and you would like to appeal against it, contact our Tax Disputes team for a free no obligation consultation today. 

We can help you deal with any tax investigation through expert advice and specialist representation. Our team deals with matters ranging from individual tax disputes to large and complex multiple client cases. 

• Formal and Informal Notices
• Compliance Checks
• Penalty Notices
• Discovery Assessments
• Voluntary Disclosures to HMRC
• Accelerated Payment Notices (APNs)
• Code of Practice 8 – CoP 8 Investigations
• Code of Practice 9 – CoP 9 Investigations
• Contractor Loan Schemes and the Loan Charge
• DOTAS/POTAS Inquiries
• PAYE Tax Investigations 

• Corporation Tax Investigations
• IR35 Disputes
• VAT Investigations and Inspections
• HMRC Unannounced Inspections and Visits
• Settlements with HMRC
• Time to Pay Arrangements
• Statutory Reviews
• Forensic Tax Advice
• Tax Litigation Advice
• Corporate Advisory
• Private Client Advisory