Finance Act 2014 included provisions giving HMRC powers to remove the cash-flow advantage to those who deliberately try to avoid tax using tax avoidance schemes by issuing Accelerated Payment Notices (APN).
HMRC can issue an APN where there is an open enquiry or appeal and one of the following three conditions is met. These condition are:
- The taxpayer has received a Follower Notice;
- The taxpayer has used a DOTAS notifiable arrangement; or
- The arrangements are subject to a GAAR counteraction.
HMRC originally indicated that around 43,000 taxpayers involved in avoidance schemes currently under dispute were likely to receive a payment notice.
The government has announced that HMRC will be issuing an additional 21,000 Accelerated Payment Notices.
The announcement that HMRC are to issue 21,000 additional APNs demonstrates their intention to remove any cash flow advantage to tax avoiders by seeking payment of the tax before appeals have been heard or it is determined whether or not the tax planning is effective.