HMRC wrongly issues thousands of APNs

HM Revenue & Customs (HMRC) withdraws one in 10 accelerated payment notices (APNs) it issues to businesses, new figures reveal.

Law firm RPC, which published the report, said the data shows that the tax man needs to exercise “far greater care” when applying its powers.

According to the research, HMRC has withdrawn some 8,600 APNs of the approximately 81,000 notices it has issued to businesses since introducing the scheme in 2015.

APNs are issued to taxpayers involved in avoidance schemes to demand an amount of tax or National Insurance Contributions (NICs). The recipient of an APN has just 90 days to pay the fine or risk late payment penalties or potential enforcement action, such as debt recovery.

However, experts and politicians have commented that APNs are often used too aggressively with “little thought for the devastating impact receipt of an APN can have on a taxpayer”.

Just last year, the Finance Bill Sub-Committee said it was “quite shocked” by evidence which revealed the “level of aggression towards taxpayers”.

Leading the committee, Lord Forsyth of Drumlean said HMRC is “risking driving people into bankruptcy” under the APN regime, as it can demand tax it believes is owed without having to first establish there is a tax liability before an independent tax tribunal or court.

Commenting on the latest report, an HMRC spokesperson said: “APNs are a proportionate response to tax avoidance to ensure that tax sits with the exchequer while in dispute. They can be withdrawn for a variety of reasons, and in many cases where APNs have been withdrawn, they have been reissued. HMRC has successfully defended all its APN judicial review challenges.”

Have you received a demand for tax? For help and advice, please get in contact with our expert tax investigations team.

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