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HMRC Dispatches Advance Payment Notices

by Robert Lee,, London

27 October 2014

HM Revenue and Customs (HMRC) has used its new "accelerated payments" powers to issue more than 600 demands for the upfront payment of GBP250m (USD402m) in disputed tax.

HMRC began sending Accelerated Payment notices (APNs) to users of tax avoidance schemes in late August. The notices give recipients 90 days to pay the tax in question. To date, GBP25m has been paid.

Financial Secretary to the Treasury David Gauke said: "Accelerated Payments are changing the economics of avoidance by removing the cash-flow advantage that avoidance scheme users have had until now. It is only fair that those who use avoidance schemes should have to pay their tax upfront."

By January 2015, HMRC expects to be issuing 2,500 APNs per month. The Department says that it is on track to deliver notices to 43,000 tax avoidance scheme users, covering GBP7.1bn in disputed tax, by the end of March 2016.

Jennie Granger, HMRC's Director General of Enforcement and Compliance, advised: "If anyone is concerned about being able to pay the notice they should contact us as soon as possible to discuss their options."

Concerns have been raised that the new powers granted to HMRC are undermining the ability of taxpayers to challenge assessments through the court system.

Earlier this month, Anne Fairpo, President of the Chartered Institute of Taxation, said: "I am concerned about the increasing focus on HMRC enforcement without third-party supervision. There is, and can be, no dispute that HMRC needs to enforce tax debts. There's no dispute that we have a societal infrastructure that needs to be paid for. In a perfect world, perhaps HMRC wouldn't need the courts – but then again, in a perfect world, no one would need the courts. This is not a perfect world. People make mistakes. HMRC makes mistakes."

In July, HMRC issued a list of schemes that it was likely to tackle under the Accelerated Payment scheme. At the time, Michael Avient, a Partner specializing in tax investigations at UHY Hacker Young, sounded a note of caution: "If individuals involved in tax planning schemes receive a notice from HMRC, advice should be sought immediately. It may be necessary to make the payment but whether or not to pursue the tax relief should be considered carefully. Deciding to settle with HMRC before a final decision is made either by HMRC or the courts could prevent individuals making a future professional negligence claim against the scheme promoters."

TAGS: individuals | court | tax | economics | tax avoidance | revenue guidance | United Kingdom | enforcement | tax authority | tax planning | HM Revenue and Customs (HMRC) | revenue statistics | tax reform | trade association | HM Revenue and Customs (HMRC) | trade | Compliance

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