4 minutes reading time (714 words)

Tax Avoidance Schemes & APNs

There has been recent widespread media coverage of aggressive tax repayment demands by HMRC. These demands have caused significant distress, with many individuals facing unexpected payment demands and resulting severe financial difficulty. Unaware that their participation in these schemes might be seen as tax avoidance, this has come as a huge blow to many – and some may never recover financially.

Accelerated Payment Notices (APNs)

APNs are issued by HMRC to taxpayers involved in avoidance schemes disclosed under the Disclosure of Tax Avoidance Schemes (DOTAS) rules or counteracted under the General AntiAbuse Rule (GAAR). The APN is a demand for full payment of the disputed tax within 90 days even if the investigation into the scheme is progressing through the court system. Restricted ability to access cash within such a short period may result in insolvency. APNs have been controversial as they are issued without the right of appeal, and HMRC has previously had to withdraw several APNs following a number of legal challenges, including judicial review. 

Film Investment Schemes

The first wave of APNs targeted individuals who invested in “tax-efficient” schemes promoted by media investment and advisory groups. Scheme partners became directors of film related partnerships, originally designed to boost investment in the British film industry, such as the Ingenious film scheme, whose members included high profile individuals including David Beckham, Jeremy Paxman, Bob Geldof and Peter Gabriel. Many sporting celebrities were also involved including Gary Lineker, Wayne Rooney, Gary McAllister, Steve McClaren and Nasser Hussain. The film partnerships made losses which were offset against investors’ other income, thus reducing their tax bills.

A number of the high-profile individuals who invested in these schemes no longer have the same earning capacity they did when they made the investment and are facing severe financial difficulties, even bankruptcy, as a result of HMRC’s demands.

As well as footballers and celebrities, the schemes have also affected those in mainstream careers such as business owners and oil & gas contractors. HMRC’s Large Business Directorate collected nearly £1 billion from large businesses through Accelerated Payment Notices in 2016.

Employee Benefit Trusts (EBTs)

Employee Benefit Trusts (EBTs) are also being targeted by HMRC. EBTs are trusts set up by companies either in the UK or offshore to hold cash and other assets. These schemes can be used to reduce income tax and national insurance contributions and generate corporation tax reductions for payments into the trust. While these can be legitimate, many are not. The long running Rangers FC tax case, the ‘big tax case’, came before the Supreme Court this week and has been deemed to be tax avoidance and HMRC can be expected to commence proceedings to recover some of the £43.2m of revenue lost as a result of the misuse of EBTs across the board.

Appealing an APN

You have the right to make representations against the APN.. If you feel the amount quoted is incorrect or the conditions for issuing the APN have not been met, we can make representations to HMRC on your behalf. Failure to pay an APN by the due date, however, could lead to penalties for late payment or surcharges and potential enforcement action being taken to recover the tax, so it is important to make sure that you take action as quickly as possible and pay the APN promptly.

How We Can Help You

MLM provides guidance and representation to people who find that they have invested in tax planning schemes which have fallen foul of avoidance rules. We fully understand the stress this can cause individuals and the serious consequences and implications such a demand can have on you and your family's wellbeing. Seeking early advice is essential. Our expert strategists can examine your situation thoroughly to ensure you achieve the best possible outcome.

Sources: https://www.gov.uk/government/publications/ten-things-about-accelerated-payment-notices/ten-things-about-accelerated-payment-notices




Accelerated Payment Notices & HMRC Aggressive Tax Demand Advice Glasgow Edinburgh & London

We understand that facing up to financial challenges can be extremely difficult and stressful. However, you should be reassured to know that there are options available and, with the right advice and support, you can take the necessary steps to improve your situation. For further information on Accelerated Payment Notices, speak to one of our specialists today. Call us on 0141 413 9195 or complete our online enquiry form.

Big Brother is watching or how HMRC can tell if yo...
Student Wanted for Summer Project



Already Registered? Login Here
No comments made yet. Be the first to submit a comment

Get in Touch

Invalid Input

Invalid Input

Invalid Input
What sector do you fall under?
Invalid Input
I would like to discuss Invalid Input

Invalid Input
  • 08450510210