The introduction of new anti-avoidance legislation in July 2014 gave HMRC powers to demand upfront payment of disputed tax from taxpayers using avoidance schemes. Taxpayers that have used a tax avoidance scheme may have to make a payment of the amount that relates to their use of the scheme, before the final amount has been agreed or determined. This is known as the Accelerated Payments Notice (APN) regime.
An accelerated payment notice may be issued only under certain circumstances such as when the taxpayer is using certain arrangements disclosed under the Disclosure of Tax Avoidance Scheme (DOTAS) rules or the recipient is subject to a counteraction notice under the General Anti-Abuse Rule (GAAR). Where an APN is issued, payment is due 90 days after the date on which the APN is received.
HMRC has published a new press release to confirm that since the APN regime was launched over 60,000 accelerated payment notices have been issued and £3 billion of tax payments from users of tax avoidance schemes has been collected.
The Financial Secretary to the Treasury, Jane Ellison MP commented:
‘The vast majority of avoidance schemes just don’t work. We’re determined to change the economics of tax avoidance by making it harder for the dishonest minority to cheat the system – collecting disputed tax upfront and tough new sanctions for enablers of tax avoidance will mean people will think twice.’
To date, HMRC has won all five judicial review challenges against the scheme. In the most recent High Court case, the taxpayers argued that HRMC hadn’t properly arrived at the amounts included in the APNs. The court ruled in favour of HMRC protecting an estimated £28 million in disputed tax.
