Withdrawn APNs on the rise at HMRC

HMRC withdrew more Accelerated Payment Notices (APNs) than it issued last year, according to law firm RPC.

In the period, HMRC withdrew 370 incorrectly issued APNs, against the 220 that were correctly issued.

APNs enable HMRC to demand that taxpayers pay the amount of tax HMRC claims it is owed in full. The tax demanded must be paid within 90 days, and there is no right of appeal. In addition, the liability does not need to be established by the Tax Tribunal or Courts. 

According to RPC, the high number of APNs withdrawn in recent years suggests that a “significant proportion of notices have been sent to taxpayers in error”. 

Since APNs were first introduced in 2014, 9,060 APNs have been withdrawn by HMRC, equating to more than 10% of the total APNs issued.

The department has previously been criticised for its use of APNs, due to the short time frame that receivers are given to make the payment, as well as the lack of a right of appeal. It has also been accused of failing to undertake necessary checks to ensure the APNs are lawful.  

Adam Craggs, partner and head of tax disputes at RPC, said: “We have acted for a large number of clients who had their APNs withdrawn by HMRC as we were able to demonstrate that the necessary statutory pre-conditions had not been satisfied and the APNs were therefore unlawful. 

“The high proportion of APNs that have been withdrawn suggests HMRC has been a little trigger happy when issuing APNs. Taxpayers who have been wrongfully issued with an APN should consider pursuing repayment from HMRC.” 

RPC added: “Despite the decline in the number of APNs being issued, it is likely that HMRC will continue to focus on generating increased revenue for the Exchequer following the enormous increase in public spending due to the coronavirus pandemic, but it does need to ensure that it exercises its powers in a proportionate and lawful manner.”