Accelerated Payment Notices
New procedures which came into force on 17th July 2014 are designed to eliminate the cash flow advantage for any taxpayer which currently has an ongoing dispute with HM Revenue and Customs (“HMRC”) in relation to past tax avoidance schemes. Follower Notices and Accelerated Payment Notices are designed to clear the backlog of disputes relating to past tax avoidance schemes.
What is an Accelerated Payment Notice?
Under measures introduced on 17th July 2014, HMRC have strengthened their tools in relation to tackling tax avoidance by individuals and companies by the introduction of the Accelerated Payment Notice (“APN”) Regime. Individuals and businesses involved in tax avoidance schemes have to pay HMRC the disputed amount of tax upfront while the dispute is resolved. Follower Notices to force compliance in cases where a similar tax dispute has already been ruled on by the courts will also be sent. HMRC will apply the Accelerated Payment Notice Regime to schemes that are formally notified to HMRC through the Disclosure of Tax Avoidance Schemes (“DOTAS”) or counteracted by the General Anti-Abuse Rule (“GAAR”). You can find out more on Accelerated Payment Notices in this PDF document issues by HMRC
What are Follower Notices?
HMRC must issue a Follower Notice before or at the same time they issue an Accelerated Payment notice. There are certain conditions that must be met:
- There must be a current tax enquiry or appeal in respect of the relevant tax
- HMRC must be aware of a judicial ruling which is relevant to the tax arrangements
Once a Follower Notice is issued the taxpayer is forced 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. Penalties of up to 50% of tax due could be enforced should an individual not act on a Follower Notice.
Will Accelerated Payment Notice’s affect me?
A notice may be issued to an individual that has taken part in a scheme or arrangement where there is an open enquiry or appeal, and HMRC believe that there is a relevant judicial ruling, which includes FTT decisions.
What will happen if I receive an Accelerated Payment Notice?
Any tax in dispute will be required to be paid by the taxpayer within 90 days or a further 30 days with be granted where the individual requests that HMRC should reconsider the amount of the payment notice. Penalties will apply for late payment.
If I receive an Accelerated Payment Notice, will I have any right of appeal?
You will have ninety days from the date of the Accelerated Payment Notice issue to object on the grounds that the relevant conditions have not been met or to object to the amount specified in the Accelerated Payment Notice. HMRC will then decide to confirm the Accelerated Payment Notice, withdraw the Accelerated Payment Notice or amend the amount specified.
How can we help?
We have the experience to assist your clients if they are looking to either litigate or settle with innovative solutions if your clients are caught by either follower notices or Accelerated Payment Notice’s.
Please contact us for more information to see how we can help.