< Go Back Accelerated Payment Notices begin to Bite! Posted: Sep 3, 2015 Under
measures introduced in July 2014 HMRC may issue Accelerated
Payment to tax scheme users in order to demand tax up-front and Follower
Notices to force compliance in cases where a similar tax dispute has
already been ruled on by the courts.
These provisions apply to income tax, corporation tax, capital gains
tax, inheritance tax, stamp duty land tax and annual tax on enveloped
What are Accelerated Payment Notices?
An Accelerated Payment Notice is a notice issued by HMRC to taxpayers
who have used tax avoidance schemes that fall within the Disclosure of
Tax Avoidance Schemes (DOTAS) rules or are counteracted under the
General Anti-Abuse Rule (GAAR). The notices will be issued to request upfront payment of the tax
alleged to have been avoided under such schemes where the scheme arrangements are subject to
HMRC’s view is that the disputed tax
should be held by the Exchequer during the dispute, removing any cashflow advantage for the scheme participant.
An Accelerated Payment Notice may be issued with or after a Follower Notice.
Before, or at the same time, as issuing an Accelerated Payment
Notice, HMRC must issue a follower notice. There are a number of
conditions that must be met.
There must be a current
tax enquiry or appeal in respect of the relevant tax, and significantly HMRC must be aware of a judicial ruling which is relevant to the tax
The Follower Notice forces a taxpayer to make corrective actions to
amend a tax return in HMRC's favour where it considers that a taxpayer
has not followed a judicial ruling. HMRC may charge penalties of up to 50% of tax due where a taxpayer does not act on a Follower Notice.
Right of appeal/safeguards?
The taxpayer has 90 days from the date of issue to object on the
grounds that the relevant conditions have not been met or to the amount
specified in the notice. HMRC will then determine whether to confirm or
withdraw the notice, or confirm or amend the amount specified.
There have been a number of recent concerns raised over these measures that are now being used, with some vigour, by HMRC. Legal challenges have already been made and, so far,
HMRC have prevailed although further cases are believed to be in the pipeline.
The legislation is complex and HMRC don't always get it right; if you need and advice on APN's please