Specialist anti-avoidance legislation gives HMRC significant powers to demand upfront payment of disputed tax from taxpayers using avoidance schemes. This means that taxpayers that have used a tax avoidance scheme may have to make a payment of the amount that relates to their use of the scheme before the final amount has been agreed or determined. This is known as an accelerated payment notice (APN) or in the case of members of a partnership, it is known as an accelerated partner payment.

An accelerated payment notice may only be issued under certain circumstances – such as when the taxpayer is using certain arrangements disclosed under the Disclosure of Tax Avoidance Scheme (DOTAS) rules – or the recipient is subject to a counteraction notice under the General Anti-Abuse Rule (GAAR). Where an APN is issued, payment is due 90 days after the date on which the APN is received. There are penalties for not paying the accelerated payment on time.

HMRC has recently published an updated list of tax avoidance schemes on which users may be charged an accelerated payment.

Source: New feed