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UK Tax Authority Withdraws APNs After Judicial Review

Tom Burroughes

1 June 2016

The UK tax authority has withdrawn accelerated payment notices (APNs) that it had issued to hundreds of taxpayers as a result of a judicial review lodged on the taxpayers' behalf by City law firm , it says. 

Under the scheme operated by HM Revenue & Customs, the authority can demand tax that it believes a taxpayer owes before the underlying tax dispute has been adjudicated on by an independent tribunal or court. Taxpayers have 90 days to pay the amount demanded in their APN with no right of appeal. RPC said in a statement yesterday that it challenged the APNs concerned on a number of grounds including that the employee benefit trust (EBT) arrangements under consideration were not "notifiable" to HMRC, under the disclosure of tax avoidane scheme (DOTAS) regime.

"We have found that those involved in tax avoidance will sometimes not have been fully informed regarding the risks inherent in these arrangements. In such circumstances, it can be productive to write directly to the taxpayer, to ensure that they are aware of all the options open to them. We never apply pressure and always suggest that a taxpayer should discuss the issues raised with their professional advisor,” a spokesperson for HMRC told WealthBriefing when asked about the matter.

RPC said this episode marks the second time the tax authority has carried out a mass withdrawal of APNs that had been issued.

“HMRC’s policy of issuing Accelerated Payment Notices seems to be 'shoot first and ask questions later',” Adam Craggs, partner and head of tax disputes at RPC, said.

“When Parliament granted this power to HMRC I am sure it assumed APNs would be issued after careful consideration and only once the necessary conditions in the legislation had been satisfied – HMRC appear to be issuing APNs on an industrial scale with little consideration to the constraints contained within the legislation,” Craggs added. 

This publication understands that HMRC’s view is that it prompts all recipients of notices to talk to their tax professionals and it is not attempting to undermine their function because it needs the goodwill of such professionals.