Accelerated payment notice

New anti-avoidance legislation came into effect on 17 July 2014 and gives HMRC significant powers to demand upfront payment of disputed tax from taxpayers using avoidance schemes. This can be demanded by the use of an Accelerated Payment Notice (APN), issued when HMRC has an open appeal or enquiry and either a follower notice has been issued (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).

HMRC has recently published an updated issue of their factsheet on the issue of accelerated payments. In the case of members of a partnership, it is known as an accelerated partner payment. The tax legislation that deals with accelerated payments refers to a compliance check as a ‘tax enquiry’. Payment is due 90 days after the date an APN is received. There are penalties for late payments of an APN. The amount of the penalty depends on the underlying circumstances. The factsheet has been updated due to changes concerning penalties and partnerships. HMRC has also published an updated version of the guidance entitled Follower notices and accelerated payments to support the new anti-avoidance legislation included in the Finance Act 2014.