An accelerated payment notice (APN) is a requirement to pay an amount on account of tax or National Insurance Contributions (NICs), issued to taxpayers that are involved in avoidance schemes disclosed under the Disclosure of Tax Avoidance Schemes (DOTAS) rules, or counter-acted under the General Anti Abuse Rule (GAAR).
The effect of the notice is to pay an amount calculated by HMRC relating to the tax advantage up front. This removes the cash flow advantage enjoyed by users of tax avoidance schemes.
Here are ten things you need to know if you have received an APN:
1. You must pay within 90 days
You have 90 days to pay the amount shown on the APN, unless you make representations, in which case the period may be longer. The payment doesn’t have to be made in one go as long as it is all paid by the due date.
2. Don’t ignore it
Failure to pay an APN by the due date could lead to late payment penalties or surcharges becoming due and potential enforcement action being taken to recover the tax or NICs. So make sure that you take action and pay the APN promptly.
3. Problems paying
If you think you will have problems paying the APN you should contact the HMRC telephone number shown on the notice, and they may be able to arrange a payment plan with you.
4. You may not get all your APNs at once
APNs are being issued on a scheme by scheme basis and so, if you are in a number of schemes, you may not get all of the APNs that HMRC plans to issue at the same time.
5. You can receive more than one APN
APNs are sent out for each year of the avoidance scheme you are in and for each type of tax involved. For example if you have used an employment scheme for two years and that scheme gives both a tax and national insurance advantage you may receive up to four APNs.
6. Paying the APN is not settling your tax affairs
The APN will only cover the tax or NICs advantage relating to the specific avoidance scheme covered by the APN. The amount shown may not be the final liability agreed, which may be larger or smaller than the amount of the APN. It will not include any interest, penalties or other tax that may be due in the year. Therefore when the enquiry or appeal is finalised, there may be additional amounts to pay.
7. Appeal rights
You have a right to make representations against the APN. You also have a right to appeal against the underlying tax or NICs that are in dispute.
8. You can object to an APN under specific circumstances
If you feel the amount quoted is incorrect or the conditions have not been met, you may make a representation which HMRC will consider. Representations should be made in writing to the address shown on the notice, within the 90 days before payment becomes due. If you do make a representation, HMRC will write to you setting out the results of their review. The response to your representation will tell you what you need to do next.
9. The amount due on an APN may be different to a settlement opportunity calculation
If you receive an APN at the same time as a settlement opportunity is in place, the value of the APN will not necessarily be calculated on the same terms offered in the settlement opportunity. Settlement opportunity calculations may also include interest and penalties, and will therefore, not necessarily be the same figure.
10. You can still settle your affairs after you’ve received an APN
If you want to settle your tax affairs and you’ve received an APN, you should contact HMRC as soon as possible. You must still pay the APN by the due date to avoid late payment penalties, but any payment received will be treated as a payment on account of the final liability and will stop the interest accruing on the underlying debt from the date it was received.