HMRC has recovered 99% of disputed tax from the first group of tax avoidance scheme users to be sent controversial accelerated payment notices (APN).
Nearly 30 users of such schemes received APNs in August, which required them to pay disputed tax within the ensuing 90 days. The total amount for this group was £29m; however, a number of others who have not yet reached their 90 day limit have also settled, bringing the amount recovered to £32m.
Contracting Umbrella Company employees are most unlikely to be hit by the notices, as they have chosen an option that results in full payment of due tax and NICs on a PAYE basis. Some self-employed contractors, however, may be in the firing line if they have used tax-planning schemes considered by the Revenue to be tax avoidance vehicles.
The new APN system effectively inverts the procedure for collecting disputed tax, which required HMRC to win a tax tribunal before recovering owed sums; now, taxpayers must pay first and pursue their case afterwards.
Financial secretary to the Treasury, David Gauke, said: “The high success rate for the first set of APNs shows avoidance scheme users are having to face up to the reality that they should pay their tax upfront, like the vast majority of taxpayers. As we move into 2015 and HMRC ramps up the number of notices it sends out, thousands more will get the message that accelerated payments has changed the economics of tax avoidance.”
The 1,750+ APNs sent so far by HMRC will rise dramatically from January, when 2,500 per month are expected to be issued.