HMRC seizes more than £2bn in accelerated payment notices

10th February 2016

HM Revenue and Customs (HMRC) has revealed it has reclaimed over £2 billion in accelerated payment notices (APNs) with the tax authority continuing its battle against the most aggressive tax avoidance schemes.

Last year, HMRC recouped more than £1 billion through APNs and seized a similar amount in 2014 which was the first year the authority was given the powers to collect disputed tax up-front.

An APN demands tax that HMRC believes is owed before the underlying dispute has even been adjudicated by an independent court or tribunal. Once an APN is sent, taxpayers have up to 90 days to respond and pay the fee demanded, but are not allowed to appeal the decision.

However, last month HMRC was forced to withdraw 2,000 APNs after admitting the demands should never have been issued to these taxpayers. This particular U-turn was linked to taxpayers who participated in the Montpelier IR35 Manx Partnership arrangements, with HMRC originally issuing notices to taxpayers involved in the scheme in April last year.

David Gauke, financial secretary to the Treasury, said: “We will not tolerate tax avoidance and accelerated payments has been a real game changer.

“HMRC already wins the vast majority of cases that go to court and now HMRC has taken more than £2bn from tax-avoiders who would have otherwise benefitted from that cash while they were being investigated.

“It should be absolutely clear to anyone who is tempted by these schemes that tax-avoidance does not pay.”

Jennie Granger, director general for enforcement and compliance at HMRC, confirmed the tax authority is now issuing as many as 3,000 APNs per month; with a combined total of 41,000 APNs issued since 2014.

HMRC anticipates finalising the distribution of all required APNs by the end of this year, bringing forward as much as £5 billion in tax payments owed to the Exchequer by March 2020.

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