The conditions are contained in an updated factsheet on tax avoidance schemes with a new section headed “What to do if you disagree with the accelerated payment notice”.
APNs date back to 2014, enabling the UK tax authority to request full upfront payment of disputed tax within 90 days without the right of appeal. The notices were designed to combat what HMRC sees as ‘abusive’ tax avoidance.
In April, the UK tax office revealed it had taken action against 14 users of tax avoidance schemes who failed to pay controversial accelerated payment notices (APNs) since their introduction in 2014 after high-profile British fashion designer Karen Millen was declared bankrupt over her £6m ($7.5m, €7m) unpaid bill.
Representations under new guidance
While there is still no right of appeal in the new guidance, representations can be made within the 90 days of receipt of the notice.
This is if the conditions for issuing the notice have not been met and/or the amount shown in the notice is not correct.
The conditions, covered in the first section of the factsheet, include, for example where the person has used arrangements that are disclosable under the disclosure of tax avoidance schemes legislation.
No option for postponement
Once a representation is made, there is no option for postponement of the amount shown in the accelerated payment notice, HMRC said.
However, if the representations are made before the date the payment is due, and HMRC does not withdraw the notice, the deadline for paying may be extended.
Payment will be due on the later of, the due date shown in the accelerated payment notice or 30 days after the date on which HMRC’s decision about the representations is received.
If the deadline for paying is extended, any penalties for paying late will apply from the extended deadline date.
HMRC confirmed to International Adviser in April that it has handed out more than 70,000 APNs in the last three years. In a tiny proportion of cases, the UK tax office has had to step up action against taxpayers who cannot or will not pay the penalties, resorting to asset seizures or court and insolvency proceedings.
