HMRC has found a very nice little earner wrt its accelerated payment notices (APNs) scheme, which extracted £1.3bn from taxpayers and SMEs in 2016/17.
This is a 21% increase from the previous year, when HMRC extracted £1.07bn from APNs, according to research from accountancy firm
Moore Stephens.
APN's are more than a little controversial, as they give HMRC the power to demand tax it
believes it is owed before the dispute is adjudicated. Those affected
have only 90 days to pay the sum, and have no right of appeal.
"Ironically" HMRC's prime targets are not large businesses but the low hanging fruit of individuals and SME's. The
compliance yield from the Counter Avoidance Directorate rose
significantly for individuals, whilst the amount collected from large
businesses fell significantly from £943m in 2015/16 to £19m in 2016/17.
Dominic Arnold, head of tax investigations and disputes at Moore
Stephens, is quoted by
economia accusing HMRC of making full use of its powers to “
shoot first
and ask questions later”:
“Its ability to demand accelerated payments remains a draconian, but
clearly increasingly effective mechanism for HMRC to clamp down on what
it sees as abusive tax schemes.
That’s all well and good for the Treasury. However, it’s a heavy
price for taxpayers to pay before they have even had a chance to put
their case. Small businesses and individuals can be put under immense
strain, financially and emotionally, while the process is ongoing.
Whether they have crossed a line or not, they don’t have long to
find what can often amount to thousands of pounds in disputed tax.”
HMRC is more than happy with the arrangement, its spokesperson said:
"HMRC has an excellent record in
supporting those in genuine difficulty, including offering more time to
pay if appropriate.
APNs change where the disputed tax sits while the issue is being
investigated, ensuring that those who have used avoidance schemes are in
the same position as everyone else who pays their tax, up front, and on
time. The regime does not change taxpayer appeal rights."
Last year HMRC was forced to withdraw 4,300 APNs issued in error out of a total of 60,000.
Tax does have to be taxing.
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