HM Revenue & Customs (HMRC) recovered £1.3 billion in disputed tax last year from individuals and small businesses under the “accelerated payment notice” initiative (APN), up by a fifth on the previous year.
To date, more than £4 billion has been collected by the taxman from users of tax avoidance schemes as a result of government measures introduced in 2014 to collect disputed tax upfront. APNs mean that users of tax avoidance schemes pay disputed tax up front while their tax affairs are investigated, instead of waiting until they are concluded.
In a statement HMRC defended the system, described by some as a ‘shoot first and ask questions later’ approach and ‘draconian, saying that APNs merely 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 Eclipse film investment scheme, where members put in cash topped up with large loans and claim tax relief on the interest payments, resulted in a significant number of APNs being issued. In April, the supreme court ruled in favour of HMRC, which argued it was a tax avoidance scheme, rather than trading film rights.
HMRC has been issued with a number of appeals from individuals and businesses who consider the APNs to be unlawful or unreasonable.
If you are concerned about a tax enquiry into your affairs, or you are already under enquiry, contact us as soon as possible. Our tax specialists, some of whom are former HMRC Inspector of Taxes, are well versed in dealing with all types of tax issues. We are also readily available to oversee HMRC disputes on your behalf, as well as to represent clients in appeal proceedings before the Tax Tribunal. In certain situations, we can also offer professional fee protection insurance so the costs are covered in whole or in part.
If you have any concerns relating to your tax affairs, please contact your usual Beavis Morgan partner.