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HMRC Has Withdrawn Hundreds Of APNs: RPC

by Robert Lee, Tax-News.com, London

02 June 2016


Law firm RPC has said that the UK tax authority, HM Revenue and Customs (HMRC), has withdrawn hundreds of Accelerated Payment Notices (APNs) as a result of a judicial review.

Accelerated payments are required where tax avoidance schemes are subject to the Disclosure of Tax Avoidance Schemes (DOTAS) rules or the General Anti-Abuse Rule, or where a similar scheme has already been defeated in the courts. APNs are issued to affected taxpayers to collect outstanding tax. Once a taxpayer receives a notice, they have 90 days to pay or make representations to HMRC if they believe the notice is incorrect. Taxpayers retain full appeal rights against the substantive tax liability.

APNs were introduced in August 2014. In February 2016, the Government announced that it had collected more than GBP2bn (USD2.9bn) in disputed tax through the accelerated payments regime. HMRC expects to have completed the process of issuing notices by the end of 2016.

City law firm RPC said it challenged a number of APNs, partly on the grounds that the Employee Benefit Trust arrangements under consideration in those cases were not "notifiable" to HMRC under the DOTAS regime. It said HMRC has now admitted that it did not have the right to issue APNs in relation to these arrangements.

Adam Craggs, Partner and Head of Tax Disputes at RPC, commented: "HMRC's policy of issuing Accelerated Payment Notices seems to be 'shoot first and ask questions later.' It is regrettable that the taxpayers concerned were put to the inconvenience and expense of having to commence judicial review proceedings before HMRC acknowledged that the APNs were unlawful."

"When Parliament granted this power to HMRC I am sure it assumed APNs would be issued after careful consideration and only once the necessary conditions in the legislation had been satisfied – HMRC appear to be issuing APNs on an industrial scale with little consideration to the constraints contained within the legislation."

RPC said that this is the second time that HMRC has had to withdraw APNs, adding that this indicates that the system is "in turmoil."

Craggs added: "As this case demonstrates, any taxpayer in receipt of an Accelerated Payment Notice should not assume that HMRC has followed the correct internal processes and exercised its powers lawfully."

TAGS: court | compliance | tax | value added tax (VAT) | tax compliance | tax avoidance | law | United Kingdom | tax authority | legislation | HM Revenue and Customs (HMRC) | HM Revenue and Customs (HMRC)

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