HMRC has collected £943m from large businesses via accelerated payment notices (APNs) over the last year, according to law firm Pinsent Masons, which says the collection is likely to relate to use of a range of suspected avoidance schemes and arrangements, including those making use of employee benefit trusts (EBTs) to reduce tax paid
APNs require businesses and individuals to make full payment of the disputed tax within 90 days, prior to any hearing and without the right of appeal. They have generated considerable controversy since their introduction, given the lack of any channel to appeal, and a number of legal challenges have now been brought against their use.
Heather Self, partner at Pinsent Masons, said: ‘The amount collected from large businesses via APNs is surprisingly high- and a signal that HMRC is continuing to employ the tool widely.
‘The tax will relate to a wide range of schemes and arrangements utilised by large businesses over recent years to reduce corporation tax payments. All large companies should be aware of the conditions under which APNs can be used, and prepare or seek professional advice accordingly.
‘The sums involved can be substantial and without the right of appeal, the notices present the potential for significant disruption.’
The £943m was collected by HMRC’s large business directorate, a specialist unit dedicated to the UK’s 2100 largest and most complex companies, and relates to payments of corporation tax specifically.
The firm said that a range of EBT arrangements are currently under review, including those used by Rangers FC, heard in the high-profile Supreme Court case last month.
Self advised businesses that it may be sensible to question the validity of any notice received.
‘The use of APNs in a number of circumstances has now been subject to judicial review, with the Court of Appeal due to hear in July the Rowe case challenging the circumstances in which APNs were issued to film scheme users,’ she said.
