Accelerated Payment Notices or APN Explained

9 June 2020

Accelerated Payment Notices or APN Explained

Have you or your clients been using tax avoidance schemes and are likely to be issued with an accelerated payment notice (APN)?

If your company or LLP cannot pay what is due in in 90 days, then the company is contingently or actually insolvent and the only option may appear to be administration or liquidation.  


Depending on the other debts of the company you may still propose a CVA and HMRC may only be able to vote to the value of £1, no matter what the final debt. Reason is that it is an "unascertained liability", in essence it is not yet proven.  During the CVA process the scheme provider can continue to challenge HMRC in the courts and if HMRC loses then the company or LLP can exit the CVA.  If not, then the company has the option of continuing in the CVA, pre pack administration or liquidation.


The relevant rule is enshrined in statute. The Insolvency Rules 1986 Section B 1.17 (3) States-

“A creditor may vote in respect of a debt for an unliquidated amount or any debt whose value is not ascertained and for the purposes of voting (but not otherwise) his (or her) debt shall be valued at £1 unless the chairman agrees to put a higher value on it”.


Accelerated payment notices started being issued in 2014. Since, HMRC have said that over £3bn has been raised from the scheme. The initiative came to an end in December 2016.

Powers are also being granted to HMRC to allow them to take money directly out of bank accounts. There is an strong move towards giving HMRC more "teeth" to collect unpaid debts.

What is an accelerated payment notice?

In summary, it is a demand HMRC issue, requesting a tax payer to pay the required amount of tax or National Insurance with 90 days. They tend to be recieved by those who are involved in tax avoidance schemes and so they request the payment to be made first and the dispute to be resolved later.

You should not avoid a notice, if recieved. If you do, it can lead to payment penalties and surcharges.
           
If you receive an accelerated payment notice, contact us on 08009700539 now to talk through your options.

Categories: Implications for Directors

A Worried Director

The Ultimate Guide For Worried Directors

Worried about poor cashflow? Covid-19?, How to pay wages on pay day? For expert advice on a range of issues download our free Ultimate Guide For Worried Directors today. Or just call us on 0800 9700539

Please note that the guide was mostly written pre Covid-19 and there have been some changes to insolvency legislation that limits creditors actions and relaxes rules regarding wrongful trading.  A new 20 day moratorium for distressed businesses has also been introduced. 

"KSA Group which owns this site, will help you fix problems in your business. We won't charge for any initial advice or face to face meetings. We speak in English. We will save you money and your precious time.  You can come to any of our offices

"We also follow up any meeting with a full "solutions report" which runs on average to 30 pages valuable free advice!!  No other practitioner offers this service.  In this report we advise on ALL the options and explain them clearly.  We advise on a course of action given the information you have given us ( the more information we have the better we can advise!)"

You are currently offline. Some pages or content may fail to load.