No man in this country is under the smallest obligation, moral or other, so as to arrange his legal relations to his business or to his property as to enable the Inland Revenue to put the largest possible shovel into his stores. The Inland Revenue is not slow – and quite rightly – to take every advantage that is open to it under the taxing statutes for the purpose of depleting the taxpayer’s pocket.
And the taxpayer is, in like manner, entitled to be astute to prevent, so far as he honestly can, the depletion of his means by the Inland Revenue.
Social attitudes have no doubt moved on since Lord Clyde’s famous dictum in 1929. Tax avoidance has taken an increasingly high profile in recent times and, although there is no suggestion of anything illegal, politicians and the media have turned the spotlight on the financial arrangements of celebrities and multinationals, doing their best to portray tax avoiders as amongst the most repugnant pariahs.
The upshot has seen HMRC taking a tough line on anyone found to be involved in what they deem to be tax avoidance schemes. As part of their efforts they have been issuing Accelerated Payment Notices (APNs), which are effectively demands for payment of tax which the recipients presumably believed was not due, and for which they have made no provision, genuinely thinking that they were dealing properly and honestly with their tax arrangements.
The tax demanded under an APN is due within 90 days and there is no scope for negotiation or appeal. In short, it’s a case of “pay up now, argue about it later”. In many cases the sums which are demanded are significant and the cash to pay is simply not available. Additional problems may arise where money invested in schemes is held in assets which are difficult to liquidate quickly, or which have reduced in value.
The number of APNs being issued by HMRC is rising and is expected to continue at a pace at least throughout this year. They and the Treasury have the bit between their teeth and will not let up. The effects are being felt by businesses across many sectors, as well as by individuals, and directors and business owners are increasingly concerned at the consequences of receiving an unexpected APN.
The key to dealing successfully with the issues around APNs is to seek specialist advice at the earliest possible stage. Effective communication about the situation is essential and the sooner that dialogue is started with the relevant parties, the better the prospects of overcoming problems.
The team at tri group has vast experience of dealing with the financial difficulties confronting companies and individuals. Initial consultations are free and confidential. If you feel you have a problem or potential problem, call us now.