Friday 28th April, 2017
Over the last year, HMRC’s Large Business Directorate has collected over £940m from large businesses through Accelerated Payment Notices (APNs).
APNs are issued to individuals and businesses who are suspected of having engaged in tax avoidance, and require full payment of the disputed tax within 90 days. APNs have been subject to controversy as they are issued without the right of appeal, and HMRC has previously had to withdraw several APNs following a number of legal challenges, including judicial review.
The figure collected is surprisingly high and according to international law firm, Pinsent Masons, draws to attention to the prevalence of tax avoidance schemes, particularly through the use of Employee Benefit Trusts (EBTs). EBTs are trusts set up by companies either in the UK or offshore to hold cash and other assets. While these schemes are legitimate, they can be used to reduce income tax and national insurance contributions and generate corporation tax reductions for payments into the trust.
While the misuse of EBTs has been on HMRC’s radar for some time, the department is cracking down in an attempt to quash tax avoidance schemes.
Heather Self, partner at Pinsent Masons, said: “The amount collected from large businesses via APNs is surprisingly high – and a signal that HMRC is continuing to employ the tool widely.
“The sums involved can be substantial and without the right of appeal, the notices present the potential for significant disruption.
“Seeking professional advice at an early stage is essential.”