As a result of a judicial review, lodged by law firm RPC, HMRC has withdrawn hundreds of accelerated payment notices (APNs). APNs have not been flavour of the month with taxpayers, as APNs enable HMRC to demand tax it believes it is owed before the dispute is adjudicated. Those affected only have 90 days to pay the sum, and have no right of appeal.
Unsurprisingly, giving HMRC such powers has resulted in many cock ups. Earlier this year, HMRC backtracked 2,000 APNs because conditions for their issuing were not satisfied.
RPC challenged HMRC on a number of grounds, including that the Employee Benefit Trust arrangements under consideration were not "notifiable" to the Revenue under the DOTAS regime. The firm said HMRC has now admitted that it did not have the right to issue the APNs related to those arrangements.
Adam Craggs, partner and head of tax disputes at RPC, is quoted by economia:
“HMRC’s policy of issuing accelerated payment notices seems to be ‘shoot first and ask questions later'.An HMRC spokesperson said:
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."
“We don’t comment on individual cases. There is no mass withdrawal of APNs. We have withdrawn accelerated payment notices from schemes where their promoters brought them to our attention when they did not legally have to. We have issued over 50,000 such notices and collected over £2.5billion for the UK.Mr Craggs intimates that HMRC is talking bollocks:
Just because a notice has been withdrawn it doesn’t mean there is no tax to pay.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.”
"HMRC appear to be issuing APNs on an industrial scale with little consideration to the constraints contained within the legislation.As noted above, if you give an organisation power to demand money upfront with little or no checks and balances that organisation will misuse that power.
There were repeated warnings from many in the tax profession when the Accelerated Payment Notices legislation was announced that there were insufficient safeguards for taxpayers and the lack of independent judicial scrutiny was a concern to many.
As this case demonstrates, any taxpayer in receipt of an Accelerated Payment Notice should not assume that HMRC has followed the correct internal processes and exercised its powers lawfully.”
Tax does have to be taxing.
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