David Murray and Lyssa Reeve, in our Dispute Resolution team, explain what an Accelerated Payment Notice (‘APN’) is and what to do if you receive one from HM Revenue and Customs (HMRC).
What is an Accelerated Payment Notice (‘APN’)?
HMRC has the power to issue APNs to individuals who invest in tax avoidances schemes. Tax avoidance schemes are designed to avoid the payment of tax to HMRC, including but not limited to: National Insurance Contributions (“NICs”), Income tax, Corporation tax and Inheritance tax.
Examples of typical tax avoidance schemes HMRC are targeting using APNs include: employee benefits trust schemes, capital gains schemes and self-employment schemes.
HMRC has previously published details of some tax avoidance schemes on its website.
However, a tax payer is often not aware that HMRC is demanding tax on funds invested in a tax avoidance scheme, until they receive an APN.
I have received an APN, what should I do now?
An APN requires payment of an amount of tax or NICs to HMRC within 90 days of the date shown on the APN.
If you cannot make payment within 90 days, you can make a request in writing to HMRC that the 90 day period for payment is extended. HMRC has discretion to grant an extended date for payment of the tax (or NICs) or to agree a different repayment option with you.
Failure to pay the APN within 90 days, could lead to late payment penalties, surcharges or enforcement action being taken by HMRC against you to recover the tax or NICs.
Can I appeal against an APN?
You have the right to appeal an APN, if you believe the amount of tax or NICs claimed is incorrect or the conditions for the issuing of an APN have not been met.
You should still pay the amount of tax or NICs claimed in the APN and submit written representations to HMRC within 90 days of the date of the APN to the address shown on the APN for HMRC.
HMRC will consider your appeal against the APN and write to you with the results of its review of the APN. If HMRC rejects your appeal, you have the right to seek judicial review of its decision but this can be a time consuming and expensive process.
If you have received an APN and require urgent legal advice, please get in touch.
For further information or legal advice, please contact firstname.lastname@example.org or call 0118 951 6800.
This article is intended for the use of clients and other interested parties. The information contained in it is believed to be correct at the date of publication, but it is necessarily of a brief and general nature and should not be relied upon as a substitute for specific professional advice.