Well they are back and just as tricky.
Accelerated Payment Notices (APNs) were legislated back in Finance Act 2014. That’s enough of a history lesson. What taxpayers have misunderstood back then was that when they paid APNs, they were not reaching a Settlement with HMRC.
What was an APN for?
The APN was often just for the tax (PAYE) and there may or may not be a separate APN at the same time for the National Insurance. Each APN is treated as a payment on account and stopped any further interest arising on the amount paid under the APN.
In order to reach a Settlement, all taxes need to be addressed including NIC, together with interest and any penalties. Often a Settlement would have to include other taxes such as inheritance tax and corporation tax.
Having been quiet for a number of years in my world at least, APNs are back in tax arena and back on the table.
No appeal, no postponement allowed
Specifically where the tax avoidance scheme has now been found to fall under DOTAS, APNs are issued to the taxpayer. The origins of some APNs go back years – 10, 12, 15 years or more. I recall at the time that APNs were “new on the block” and by their very nature tricky to deal with. HMRC would not accept any appeal or postponement so taxpayers had to pay, so they did. Often without seeking tax advice.
Surely payment was the end of the matter?
No.
As previously stated, the payment of an APN is only treated as a payment on account. The “matter” is still live and will only be the end of it when a Settlement is reached.
What’s happening now then?
A number of taxpayers have already been sent huge interest bills. Any unpaid tax (and NIC) continues to attract interest on a daily basis until paid in full. Some amounts go back 15 years or more when the interest rate was 7% or 8% p.a. not the 3.25.% p.a. it is today.
What should clients do?
Don’t panic, help is at hand.
If a Settlement was reached at the time, it can be done today. A lot of dust may need to be blown of the paperwork but there will be sufficient records within HMRC to work out a solution if the taxpayer has destroyed their copy.