16 August 2016: In November 2015 we wrote about how there has been an increase in enquiries regarding Accelerated Payment Notices (APNs) and how these may impact businesses in the future.
APNs issued by HMRC have led to businesses being threatened with only 90 days to pay the sums demanded or face the consequences.
Briefly, APNs may be issued against companies who had entered disguised remuneration and other tax avoidance schemes. These include Employee Benefit Trusts and Contractor Loan Schemes.
Having now discussed a number of these cases with HMRC, we have found that they are willing to reach settlements and negotiate affordable payment plans. It remains important that business owners who receive these notices take action as they definitely won’t go away.
BRI can provide professional expert representation and assist with the negotiation, especially where the APN sums are substantially disputed. Difficulties arise for those business owners who do not have the means to satisfy the demands. From experience we can say that, even where a company has been liquidated, HMRC are not going to accept that business owners that have benefited from the schemes should not be held accountable for the avoidance which has left HMRC out of pocket.
HMRC have the backing of the treasury in clamping down and pursuing beneficiaries personally, ‘lifting the veil of incorporation’ and holding individuals accountable. Disguised remuneration will continue to be challenged and new tax charges will arise if loans still remain outstanding or have not been taxed in full by reaching a settlement with HMRC by 5 April 2019. Further consultations are awaited and the new Finance Bill in 2017 is expected to include the new tax charges.
Changes in tax legislation that are proposed and the consultations that are awaiting include:
- Reforms to Corporation Tax loss relief
- Tax deductibility of corporate interest expense
- Reform of the substantial shareholding exemption
Our insolvency experts continue to advise business owners and their accountants/professional advisers helping them to consider the options available when faced with an APN.