Accelerated Payment Notices – where are we now?
In July 2014 I penned an article which sought to explain the rationale and workings of Part 4 of the Finance Act 2014 (“FA 2014”) which received royal assent on 14 July 2014. The article can be found here. Since writing that article there have been a number of significant developments and it is the purpose of this note to set these out.
Firstly, it has become clear that the focus of HMRC efforts is on sending accelerated payment notices to individuals using schemes or arrangements which have a DOTAS number. In July 2014, HMRC published their first list relating to over 1,000 tax avoidance schemes whose users may receive an accelerated payment notice. Users received notices over the course of a couple of years and the list was to be kept under review by HMRC. With the benefit of hindsight the schemes identified under DOTAS were always going to be the low hanging fruit.
The taxpayers affected have responded by mounting a number of judicial review challenges[i]. The arguments advanced before the court for judicial review have, largely, been rejected. A detailed discussion of those arguments is outside the scope of this article, but suffice it to say that whilst there are some judicial review arguments which have not yet been deployed (probably for want of the right circumstances) and it is not inconceivable that these arguments may yet prove effective for the taxpayer the chances of such success have withered with each new decision.
So, what alternative does the taxpayer have? In my article of July 2014 I suggested that the wise course for any taxpayer faced with the threat of an accelerated payment notice was to take advice on any cash flow and / or solvency issues. In this article I am going to suggest that as part of that process the taxpayer consider whether or not he has been misadvised in relation to the “scheme” that he has entered into. Whilst this might prove to be uncomfortable for all concerned what can arise out of such a review is a valuable and viable action / claim against a scheme promoter or other former advisor which may be sufficient to alleviate any solvency issues. The taxpayer must have little to lose in examining this option.
28 June 2016
T: 0161 8771200
[i] Nigel Rowe and others v HMRC  EWHC 2293 (Admin); Walapu v Her Majesty’s Revenue & Customs  EWHC 658 (Admin) Queen’s Bench Division; R (on the application of Graham and others) v Revenue and Customs Commissioners –  All ER (D) 185 (May) and Sword Services Ltd and others v Revenue and Customs Commissioners  EWHC 1473 (Admin)