Accelerated payment Notices
If a user is involved in a tax avoidance scheme, you will likely be subject to investigation by HMRC. You may receive an APN (accelerated payment notice) from HMRC requesting accelerated payments to ensure your legal compliance with the scheme.
Accelerated payments may be some or all of the tax you are expecting to save through tax avoidance. This means the disputed tax money (referred to by HMRC as the ‘understated tax’) is held in the Exchequer, which minimises the cash flow advantage enjoyed by tax avoidance scheme users and promoters until the scheme in hand has been deemed legally sound and non-abusive of existing tax legislation.
If the accelerated payment amount is found to be more than the amount found to be due once the compliance check is complete, HMRC will normally repay any extra.
Payment must be made within 90 days of receiving an APN. If a scheme user has problems paying the full amount, HMRC can be contacted to arrange a payment plan. HMRC are renowned for the fair treatment of those who can’t pay their dues immediately.
There are corrective actions that can be taken against an APN. If the user files an appeal, enters an agreement to relinquish the advantage of the scheme and informs HMRC that they’ve taken the action and the amount that is now payable, there is no need for accelerated payments.
A tax advisor can offer specialised assistance if you are having difficulties with an APN, or other tax investigation-related problems. We as tax accountants will not advise to just pay the amount demanded by HMRC on APN but would advise to calculate your taxes fairly and file your tax returns properly. It’s a chance where HMRC can allow you to come clean if you owe any money to the taxman.