HMRC withdraws 2,600 accelerated payment notices for unpaid tax

HMRC has cancelled another 2,600 of its controversial accelerated payment notices (APNs) during the last year, according to law firm RPC, which says over 10% of APNs issued since 2014 have been withdrawn, raising concerns the process is becoming ‘commoditised’

APNs were introduced by HMRC in 2014 as a way of making taxpayers to pay disputed tax before their appeals had been determined by the tax tribunal, in a bid to speed up collection of tax.

HMRC has now withdrawn 8,600 of the approximately 81,000 notices that it has issued overall, with RPC suggesting this indicates HMRC is not exercising sufficient care and attention when deciding to issue APNs.

APNs are considered controversial by many as they are normally issued before an independent tax tribunal or court has determined that tax is even due to HMRC. Taxpayers have no right of appeal and the APN legislation is retrospective, meaning taxpayers can receive APNs in relation to events which took place many years before the legislation was enacted.

The sums demanded by APNs can create a huge financial burden for businesses and individuals, and can even push some into insolvency or bankruptcy, the law firm said.

RPC says that due to the aggressive approach adopted by HMRC in relation to the issuing of APNs, it is likely that a number of these notices were issued in error which has led to them being withdrawn by HMRC.

It says the significant proportion of APNs that are being withdrawn shows that any taxpayer who receives an APN seeks expert legal advice before paying the tax upfront if they feel it has been issued in error. Where appropriate, the legality of an APN can be challenged by way of judicial review proceedings.

RPC claims that there have been instances where APNs have been withdrawn by HMRC following the instigation of judicial review proceedings.

Adam Craggs, partner at RPC, said: ‘The fact HMRC has had to withdraw over 10% of all APNs they have issued suggests they need to exercise far greater care when exercising this power.

‘There is a suspicion that HMRC may have commoditised the process for administrative convenience with little thought for the devastating impact receipt of an APN can have on a taxpayer.’

The controversy around the use of APNs has echoes of the current concerns around the 2019 loan charge on disguised remuneration schemes, which came into effect this month. MPs and others have questioned whether or not this is also retrospective legislation and have drawn attention to what they say are potentially very serious financial consequences for some taxpayers. Craggs said: ‘HMRC regularly refers to “fair” in its various press releases, however, it is gaining a reputation as a department which is out of control and is anything but fair.

‘The unprecedented criticism of HMRC by the All Party Parliamentary Group of MPs in their Report, published on 3 April 2019, is of concern.’

Report by Pat Sweet

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