Accelerated Payment Notices (APNs)

Received an Accelerated Payment Notice (APN) from HMRC?
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There has been a great deal of press lately in respect of a significant number of small businesses in the UK facing uncertain times ahead as a result of the government’s and HM Revenue & Customs’ (“HMRC”) clampdown on tax avoidance schemes by use of Accelerated Payment Notices (APNs). The press has reported high profile celebrities and sports stars participating in legal tax avoidance schemes which mean they pay minimal amounts of income tax. A Disclosure of Tax Avoidance Scheme (DOTAS) is a set of arrangements that try to use tax legislation to gain a tax advantage that is not intended by the legislation.

It has been reported that companies are receiving Accelerated Payment Notice demands for significant amounts of potentially unpaid Tax and National Insurance contributions. HMRC is expected to issue up to a further 40,000 Accelerated Payment Notices by the end of 2016.

Companies involved in tax avoidance schemes now have to pay HMRC the disputed amount of tax upfront while the dispute is resolved. This new power, called ‘Accelerated Payments,’ came into force as part of the Finance Act 2014. The new method means that companies are obliged to pay the outstanding liability within 90 days of receipt of the notice with no scope for appeal.

Background to Accelerated Payment Notices

In 2013 the Treasury gave HMRC the power to issue a notice to taxpayers to settle their disputes. Later in the year the Government announced the accelerated payments would apply to those who did not settle their debts in response to the notice. By 2014 Accelerated Payment Notices were extended to those taxpayers falling within the scope of tax avoidance schemes (DOTAS).

Reports state that HMRC has raised £1 billion in tax so far and aims to raise £5.5 billion by March 2020. With over 44,000 Accelerated Payment Notices being issued already across the UK to a split of around 34,000 individuals and 10,000 businesses, the announced clampdown will bring worry to many other businesses across the UK.

Clearly there are concerns that many companies who are now receiving Accelerated Payment Notices have limited funds and assets to pay the tax liability within the three month deadline and as a result this may force them into serious financial difficulty, possibly insolvency. 

What options are available if you receive an Accelerated Payment Notice?
You may find yourself receiving an Accelerated Payments Notice after following some bad advice, or believing you were taking part in a legal tax scheme. Whatever your situation and reason for receiving an APN you need to act fast.

Firstly, call or contact Cashsolv using our contact form below. We have experienced experts available who can discuss and advise the options available to you, as well as negotiating with HMRC on your behalf.

• One option would be to seek to negotiate a formal Time to Pay Arrangement (“TTP”) with HMRC.  HMRC’s debt management solution can allow a company up to a period of 12 months to repay the debt. This would hopefully give the company sufficient time to pay the liability without the need for a formal insolvency. TTP can be set up relatively easily provided that the following can be demonstrated:-
  
  1. The company’s cash flow shows that it can afford to pay the debt in up to 12 months
  2. The company is able to pay all ongoing taxes on time
  3. All returns due have been submitted
  4. There is a plan for the whole debt to be paid
   
• Alternatively, a business loan may be the answer. At Cashsolv, we offer flexible loan terms from £20,000 to £250,000 repayable over 1 to 12 months. The application process is easy and money can be in your bank within 24 hours.
• A Company Voluntary Arrangement (“CVA”) is another option.  A CVA is a one off legally binding agreement with your company's creditors, whereby the creditors agree to be paid what the company can afford, not necessarily what is owed and to write off the balance. Under a CVA you will keep control of your company and continue to trade as normal.

See how Cashsolv™ can help your business.