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HMRC didn’t issue a single Accelerated Payment Notice last year

Published on 18 December 2021

• 81,540 APNs have been issued since they were introduced in 2014 – 12% of which have been withdrawn
• APNs issued to those who have participated in tax avoidance schemes

According to the international law firm RPC, HMRC didn’t issue any Accelerated Payment Notices (APNS) last year, making it the first year none have been issued since they were introduced in 2014 as part of HMRC's crack down on the use of tax avoidance schemes.

Adam Craggs, Partner and head of the Tax Disputes team at RPC explains the high proportion of APNs that have been withdrawn suggests that HMRC have realised that the withdrawn APN were issued unlawfully as a result of the various statutory conditions, which must be satisfied before a APN can be issued, not being complied with.

APNs are considered by many to be a controversial weapon in HMRC's armoury. APNs allow HMRC to demand payment of the full amount of tax that it claims the taxpayer owes, before the amount of any tax that may be due has either been agreed by the taxpayer or determined by an independent tax tribunal. 

The taxpayer has no right of appeal against an APN and the full amount demanded in the APN must be paid within just 90 days. Failure to pay on time will typically lead to HMRC issuing late payment penalties.

HMRC has previously come under fire for being heavy-handed in its use of APNs, many of which were unlawfully issued to taxpayers. Of the 81,540 that have been issued since 2014, 12% of these have since been withdrawn. In many cases this was due to HMRC not meeting the necessary conditions for issuing them. For each of the last three years, HMRC has withdrawn more APNs than it has issued. 

Adam Craggs says: “After issuing a large number of APNs in the early years following their introduction, HMRC appears to be quietly winding down this programme.”

“The negative media attention given to APNs and the controversial Loan Charge, may  be a contributing factor to HMRC choosing to wind down its APN initiative.” 

“Tackling tax avoidance will continue to be a major priority for HMRC, particularly in light of the Pandora Papers leak, but HMRC should be wary of adopting a heavy-handed approach to tax compliance issues.”