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Accelerated Payment Notices Raise Additional Taxes

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Reviewed: 17th September 2015

Accelerated Payment Notices have helped HMRC net an extra £1bn in taxes

Demands for upfront payment of disputed tax amounts have seen HMRC recover an extra £1 billion in revenues for the Treasury, it has been revealed.

According to David Gauke, financial secretary to the Treasury, the introduction of Accelerated Payment Notices has had a very significant impact on how much money HMRC is able to routinely recover.

Rules on when disputed taxes should be paid have been tightened up in recent months as the government looks to continue with what it presents as a clampdown on tax avoidance.

“The government will not tolerate tax avoidance and Accelerated Payments has been a real game changer,” said Gauke in a statement.

“It is no longer possible for these individuals to avoid tax and sit on the money while their affairs are investigated. This first £1 billion received in Accelerated Payments shows that we are turning the tables on those looking to avoid paying their fair share.”

The government’s strategy in using Accelerated Payment notices is to insist that any amounts related to potentially disputed tax money should be paid upfront and then disputed at a later date.

By doing so, the aim is to see the scope for successful tax avoidance minimised and the time taken to retrieve disputed amounts limited.

To date, there have been a total of 25,000 Accelerated Payment notices issued around the UK since the first of them was sent out in August 2014.

HMRC has said it expects to have issued close to 64,000 such notices before the end of 2016, with somewhere in the region of £5.5 billion forecast to have been generated for the Treasury through Accelerated Payments before the end of the current parliament and March 2020.

The notices give recipients 90 days to pay amounts demanded or to make relevant representations to HMRC if they believe the notices have been wrongfully received. 

“Tax avoiders are running out of options. People now have to pay upfront and dispute later,” said Jennie Granger, the HMRC’s director general of enforcement and compliance.

“We are winning around 80 per cent of avoidance cases that people litigate. And many more are settling before litigation.”