05 Aug HMRC win Accelerated Payment challenge
The Accelerated Payment Notice (APN) regime was introduced in July 2014. The introduction of the APN gave HMRC significant powers to demand upfront payment of disputed tax from taxpayers using avoidance schemes.
The legality of the APN regime was the subject of a recent challenge in the High Court by a number of users of an avoidance scheme. The recipients had received APNs and challenged the legality of the notices through a judicial review.
The appellants claimed that HMRC’s action in issuing the Accelerated Payments Notices were unreasonable, breached natural justice and represented an abuse of their rights under the European Convention on Human Rights. They were also concerned about having to pay the tax due before the dispute had been resolved. The Court found in HMRC's favour on all the challenges.
On the back of the High Court’s decision, HMRC is expected to complete the issue of around 64,000 tax notices by the end of 2016 bringing forward £5.5bn in payments for the Exchequer by March 2020.
David Richardson, Director of Counter Avoidance, HMRC, was obviously pleased with the decision and commented that:
'Those who use tax avoidance schemes need to know they can no longer hold on to the money while their affairs are investigated. They have to pay their tax up front like everybody else.'