Updated: 5th February 2020
HMRC has backed down and is to withdraw hundreds of Accelerated Payment Notices (APNs) it issued recently to businesses and individuals around the UK.
APNs have caused controversy in recent months as they have become increasingly used by HMRC to demand upfront payments of amounts it believes to be due as taxes.
Many recipients of APNs have claimed that they shouldn’t owe the money to HMRC and that their tax affairs are in order.
The UK’s primary tax-gathering body is now being accused of demanding payments of large sums of money via APNs without taking the time to fully assess whether the amounts cited should in fact be due as taxes.
“HMRC’s policy of issuing accelerated payment notices seems to be ‘shoot first and ask questions later’,” said Adam Craggs from the law firm RPC, which mounted the latest successful legal challenge against HMRC in relation to hundreds of APNs issued against users of offshore trusts.
“It is regrettable that the taxpayers concerned were put to the inconvenience and expense of having to commence judicial review proceedings before HMRC acknowledged that the APNs were unlawful,” Craggs added in a recent statement.
HMRC has repeatedly cited APNs as an important aspect of its efforts to clampdown on tax avoidance since they were introduced in 2014 and credited them with having helped to recoup more than £2 billion in disputed taxes.
However there have already been several legal cases in which HMRC has been obliged to back down and to withdraw APNs issued in relation to amounts of money held offshore.
“Just because a notice has been withdrawn it doesn’t mean there is no tax to pay. The underlying tax dispute remains until it is settled or taken to court,” a spokesperson for HMRC explained in response to the recent legal case which found against it.
“There is no mass withdrawal of APNs,” the spokesperson added.
Mr Craggs, who is partner and head of tax disputes RPC, has said that HMRC “appears to be using APNs on an industrial scale with little consideration to the constraints contained within the legislation”.
For recipients of APNs, the consequences can be very serious and even lead to bankruptcy in some cases, with HMRC giving people as little as 90 days to settle any amounts being demanded.