Contractors' Questions: What if HMRC sends me an APN?

Contractor’s Question: I lie awake some nights worrying I might receive an Accelerated Payment Notice, not that it would be near the £100,000 that some contractors are apparently receiving. I know that HMRC has still got more APNs to issue - and that there is no time limit on when it can issue an APN, but the deadline to pay won’t change will it; it’s 90 days?

Expert’s Answer: It sounds unfair and rather worrying to have to wait and see if you’re due an APN – but there are a number of facts to bear in mind.

Firstly, HMRC can only issue one against an individual in specific circumstances:

  • If the individual has been involved with a recognised tax scheme (these schemes have what is called a Disclosure Of Tax Avoidance Scheme (DOTAS) reference number)
  • Where they’ve already sent a General Anti-Abuse Rule (GAAR) counteraction notice, or
  • Where a Follower Notice (FN) has been issued – this is where an individual has an existing appeal or enquiry in progress, and HMRC believes that a ruling from another court case would be relevant to the outcome of this particular case.

If you receive an APN, the tax is payable within 90 days of issue (not receipt of the letter), as you say.  They aren’t appealable, but you can make a representation (within 90 days) to HMRC that they have miscalculated the tax, and also represent that the APN is not valid.  Once HMRC reply, they will withdraw, confirm or amend the APN.  If they do not withdraw the APN, you have 30 days from receipt of HMRC’s response to settle the balance in full. 

Lastly, from our experience of acting for numerous clients who have received APNs, it is absolutely essential that recipients do not simply accept HMRC’s initial assertions that the tax is due and payable. As we’ve said before, a second opinion is worth its weight in gold.

The expert was Doug Sinclair, head of tax investigations at BKL.

Friday 9th October 2015