Following a judicial review lodged by law firm RPC, HMRC have withdrawn hundreds of accelerated payment notices (APNs).
The Accelerated Payment scheme was introduced in order to collect disputed tax upfront. Earlier this year HMRC had collected more than £2bn from disputed tax since the introduction of APNs in 2014.
Adam Craggs, partner and head of tax disputes at RPC said “HMRC’s policy of issuing accelerated payment notices seems to be ‘shoot first and ask questions later’.
“It is regrettable that the taxpayers concerned were put to the inconvenience and expense of having to commence judicial review proceedings before HMRC acknowledged that the APNs were unlawful.”
A HMRC spokesperson said, “We don’t comment on individual cases. There is no mass withdrawal of APNs. We have withdrawn accelerated payment notices from schemes where their promoters brought them to our attention when they did not legally have to. We have issued over 50,000 such notices and collected over £2.5billion for the UK.
“Just because a notice has been withdrawn it doesn’t mean there is no tax to pay. The underlying tax dispute remains until it is settled or taken to court.”
However, Craggs said HMRC “appear to be issuing APNs on an industrial scale with little consideration to the constraints contained within the legislation”
“There were repeated warnings from many in the tax profession when the Accelerated Payment Notices legislation was announced that there were insufficient safeguards for taxpayers and the lack of independent judicial scrutiny was a concern to many.
“As this case demonstrates, any taxpayer in receipt of an Accelerated Payment Notice should not assume that HMRC has followed the correct internal processes and exercised its powers lawfully,” he added.