For UK business owners, receiving correspondence from HMRC can often be a cause for concern. One document that raises particular alarm is the Accelerated Payment Notice (APN). This blog explores what an APN is, why it might be issued, and what steps business owners can take to address it.
What is an Accelerated Payment Notice?
An Accelerated Payment Notice (APN) is a formal demand issued by HMRC requiring a taxpayer to pay disputed tax upfront while the underlying tax dispute is still under review. These notices typically arise when HMRC believes the taxpayer has participated in tax avoidance schemes.
An APN bypasses the usual process of resolving disputes before payment is due. Instead, it compels taxpayers to settle the disputed amount within 90 days, regardless of whether the scheme or arrangement is ultimately deemed compliant with tax laws. This approach allows HMRC to secure the funds while investigations or appeals continue.
Why Would HMRC Issue an APN?
HMRC issues APNs as part of its strategy to combat tax avoidance. APNs target individuals or businesses who:
- Have used tax avoidance schemes that fall under the Disclosure of Tax Avoidance Schemes (DOTAS) rules.
- Are involved in arrangements listed as “follower cases,” meaning similar schemes have already been ruled against in court.
- Are subject to a General Anti-Abuse Rule (GAAR) notice.
If you receive an APN, it does not necessarily mean you’ve committed fraud or evaded tax. However, it does mean that HMRC has identified a potential issue with your tax arrangements that warrants immediate payment.
What Should You Do if You Receive an APN?
- Review the Notice Carefully: Verify the details in the APN, including the amount HMRC claims you owe and the tax years involved. Check whether the scheme referenced genuinely applies to your situation.
- Consult a Specialist: An APN can have serious financial implications. Consulting a tax advisor or insolvency practitioner with expertise in APNs is crucial. They can help determine whether the APN is valid and identify any grounds for appeal.
- Act Promptly: You have only 90 days to pay or make representations (formal objections) to HMRC. Ignoring an APN can lead to enforcement action, including penalties or legal proceedings.
- Assess Financial Impact: Paying the APN can strain your business’s cash flow. If the payment leaves you unable to meet other financial obligations, seeking professional advice from an insolvency practitioner is essential. They can help you explore options such as time-to-pay arrangements, restructuring, or other insolvency solutions.
How an Insolvency Practitioner Can Help
Receiving an APN may push a business into financial distress. Insolvency practitioners offer expert guidance to protect your business and personal assets while working to resolve tax issues with HMRC. Solutions might include negotiating payment plans, restructuring debt, or, in severe cases, guiding you through voluntary liquidation to close your business in a managed way.
Don’t Face HMRC Alone
An HMRC Accelerated Payment Notice can feel overwhelming, but you don’t have to face it alone. By acting quickly and seeking advice from experienced professionals, you can minimise the impact on your business and safeguard your financial future. If you’re struggling with the financial pressure of an APN, contact Voscap today on 020 7769 6831, or email help@voscap.co.uk, for confidential advice tailored to your situation.
