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UK Welcomes Success Of Accelerated Payment Notices

by Jason Gorringe, Tax-News.com, London

19 July 2017


HM Revenue and Customs, the UK tax authority, has reported that it has collected more than GBP4bn (USD5.2bn) in advance tax payments from those taxpayers that have used a tax avoidance scheme.

Accelerated payments, required from those receiving an accelerated payment notice (APN), were introduced in the Finance Act 2014 and National Insurance Contributions Act 2015. They apply where avoidance schemes are subject to the Disclosure of Tax Avoidance Schemes rules or the General Anti-Abuse Rule, or where they are similar to a scheme that's already been defeated in the courts. An accelerated payment notice is issued to the taxpayer to collect the outstanding tax. After they receive the notice, they have 90 days to pay or make representations to HMRC if they consider the notice is incorrect. If a taxpayer has used a scheme that is the same as or very similar to a scheme that HMRC has defeated in court, HMRC can issue a Follower Notice (FN) requesting settlement. If the taxpayer does not settle their dispute and HMRC wins a court case against them, they will face a substantial penalty.

HMRC said more than 75,000 accelerated payment notices (APNs) have been issued to people under inquiry for tax avoidance since rules were introduced in 2014, and the agency said it has now issued APNs on all the schemes that were already under investigation when the new rules came in. The average bill for large companies trying to avoid tax is GBP6m (USD7.8m), while for individuals and small corporates it's GBP74,000. HMRC currently has more than 600 schemes and 80,000 users under investigation.

HMRC recently won a sixth court ruling on the legitimacy of APNs. Commenting, David Richardson, Director General for Customer Compliance Group in HMRC, said: "APNs have helped level the playing field by changing the economics of avoidance. We are pleased that the High Court has again supported HMRC's operation of the Accelerated Payments regime. This is our sixth win out of six Judicial Reviews of APNs."

TAGS: individuals | court | Finance | Insurance | tax | economics | tax avoidance | tax authority | HM Revenue and Customs (HMRC) | HM Revenue and Customs (HMRC) | Compliance | Tax

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