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APNs Shouldn't Force UK Taxpayers Into Bankruptcy: RPC

by Robert Lee,, London

09 November 2015

Law firm RPC has called on the UK tax authority, HM Revenue and Customs, to confirm that it will not force individuals into bankruptcy through the use of Accelerated Payment Notices.

HMRC began sending APNs to UK users of certain tax avoidance schemes in August 2014. The notices give recipients 90 days to pay the tax in question. APNs may be received by taxpayers who use a tax avoidance scheme disclosed by the promoter under the UK's disclosure of tax avoidance schemes (DOTAS) rules. Disclosed schemes are assigned a scheme reference number (SRN), which can be used by the taxpayer to check HMRC's online list of schemes to determine whether they could be liable to pay tax upfront while the scheme is challenged by HMRC.

RPC said that there are growing concerns that, with no right of appeal against an APN, taxpayers could be forced into bankruptcy. It has urged HMRC not to pursue insolvency proceedings in these cases until the underlying tax dispute has been resolved.

According to the law firm, many taxpayers in receipt of an APN have been forced to sell off property and assets at less than their full market value in order to pay the sum demanded.

Adam Craggs, Partner and Head of Tax at RPC, commented: "It is extraordinary that taxpayers may face bankruptcy as a consequence of being unable to pay an amount demanded in an APN, when that sum remains in dispute and remains to be determined by an independent tribunal or court as being lawfully due. Taxpayers who are forced into bankruptcy as a consequence of non-payment of an APN will face a life-changing situation. Those working in the professions, or regulated industries, could face losing their livelihoods."

"HMRC accepts 'hardship' as a valid reason for non-payment of disputed VAT whilst a VAT appeal is proceeding before the tax Tribunal and there is no reason why it cannot do the same for APNs."

TAGS: individuals | court | compliance | tax | tax compliance | tax avoidance | law | financial services | United Kingdom | tax authority | contractors | HM Revenue and Customs (HMRC) | revenue statistics | HM Revenue and Customs (HMRC) | services

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