Through the Counter-Avoidance Directorate, HMRC can issue taxpayers it suspects of using a tax avoidance scheme with an APN. This requires full payment of disputed tax within 90 days, before any tribunal hearing takes place.

Payments are compulsory and there is no right to appeal.

Dominic Arnold, head of tax investigations and disputes at Moore Stephens says: ‘HMRC is making full use of its powers to ‘shoot first and ask questions later’. Its ability to demand accelerated payments remains a draconian, but clearly increasingly effective mechanism for HMRC to clamp down on what it sees as abusive tax schemes.

‘That’s all well and good for the Treasury. Not only is the tax take swelled as HMRC ramps up its use of APNs, the authorities will be hoping that accelerating the payment process will deter people from testing the boundaries of tax planning in the future.

‘However, it’s a heavy price for taxpayers to pay before they have even had a chance to put their case. Small businesses and individuals can be put under immense strain, financially and emotionally, while the process is ongoing.

‘Whether they have crossed a line or not, they don’t have long to find what can often amount to thousands of pounds in disputed tax.’

APNs were introduced in July 2014 to help HMRC combat tax planning schemes, such as those often used by high earners and entrepreneurs or businesses aiming to reduce income tax or NICs.