Tax_TaxAgility Accountants LondonBack in July 2014 HMRC published a list of over 1,000 schemes that they deemed to be tax avoidance vehicles, claiming that they will soon start sending out Accelerated Payment Notices (APNs) to taxpayers, including contractors and freelancers, who have invested in these schemes.

Under the new rules associated with APNs it’s mandatory for contractors who receive one of these letters to pay any tax bills upfront before appealing their case; including the full payment of all and any bills you dispute. If you don’t pay your tax bill in full you will automatically incur fees and penalties, even if you intend to appeal the decision.

Though these new rules were due to come into effect in July, HMRC have since revealed that APNs will start being sent out from August. It’s worth noting that if you are due to receive an APN you will first be sent a notice letting you know that HMRC have placed your tax payments under consideration. You should use this time to gather your payment options, as once you receive your APN you’ll have exactly ninety days to pay your bill in full.

Tackling Tax Avoidance Schemes

If you’re a contractor or freelancer who has never placed any money into a scheme that, you believe, HMRC could deem to be a tax avoidance vehicle, you have nothing to worry about. If, however, you placed money into one of the schemes on HMRC’s list it’s recommend that you contact HMRC immediately, whether personally or through an accountant, in order for you to settle a potential avoidance issue as quickly as possible.

The Government has made it clear in recent years that uncovering tax avoidance schemes and collecting lost revenue from the individuals, contractors, and businesses using them is one of their top priorities in order to recover some of the £15bn currently owed to HMRC.

In recent years numerous celebrities such as Gary Barlow, Mark Owen, and Howard Donald from the band Take That have faced strong public opinion over their parts in tax avoidance schemes, with this focus now falling on ordinary taxpayers who have taken part in such schemes in a bid to reduce their income tax or stamp duty (on property) payments.

HMRC’s Stronger Position

Unlike in other taxation situations whereby you’re given an extension on the time in which you have to pay your bill should you wish to appeal, the pay-first approach to APNs put HMRC in a much stronger position when it comes to bringing in uncollected tax.

David Gauke, Exchequer Secretary to the Treasury, speaking about the Accelerated Payment Notices last month said that APNs work to “tackle the small minority of taxpayers who are currently able to put off paying tax, sometimes for several years. This will put them on the same footing as the majority of taxpayers who pay their tax up front.”

If you’ve received an APN you should keep in mind that should HMRC not receive your full payment in time they now have the ability to raid your bank accounts and ISAs for uncollected tax payments.

Independent Advice on Accelerated Payment Notices (APNs)

If you’ve received an APN you should seek out professional, independent advice from a qualified accountant. To speak with a professional to discuss how to move forward with your APN, contact us today on 020 8780 2349 or get in touch with us via our contact page to arrange a complimentary, no obligation meeting.


This blog is a general summary. It should not replace professional advice tailored to your specific circumstance.