HMRC defends tax notices

HMRC defends tax notices

The taxman has defended its practice of sending enforcement orders to taxpayers who are appealing against tax demands.

HMRC issues the accelerated payment notices (APNs) to individuals and companies who are in dispute with HMRC and are appealing a tax tribunal decision.

The notices are sent out prior to the appeal being heard, and ask for payment of monies that may not be due if the taxpayer wins the appeal.

Data compiled by law firm RPC shows that HMRC has issued about 81,000 of these notices since 2014, and later withdrawn about 10 per cent of these.

Adam Craggs, partner at law firm RPC, said a 10 per cent rate of withdrawal of the notices would suggest that HMRC is "not exercising sufficient care and attention when deciding to issue APNs".

He added: "APNs are considered controversial by many as they are normally issued before an independent tax tribunal or court has determined that tax is even due to HMRC.

"There is a suspicion that HMRC may have commoditised the process for administrative convenience with little thought for the devastating impact receipt of an APN can have on a taxpayer.

"HMRC regularly refers to ‘fair’ in its various press releases, however, it is gaining a reputation as a department which is out of control and is anything but fair."

A representative of HMRC said APNs can only be issued in very limited circumstances, as prescribed by legislation, and contended that APNs are not retrospective, as they do not change the tax status of an individual for a previous year.

The spokesman said: "APNs are a proportionate response to tax avoidance to ensure that tax sits with the Exchequer while in dispute.

"They can be withdrawn for a variety of reasons and in many cases where APNs have been withdrawn, they have been reissued."

The representative added all legal challenges to the issuing of APN notices have been won by HMRC.