Errors were made by HM Revenue & Customs over accelerated payment notices, and so they are wrong to claim the regime is a success, according to Tim Stovold, head of tax at Kingston Smith.
More than 75,000 accelerated payment notices (APNs) have been issued to people under enquiry for tax avoidance since rules were introduced in 2014.
But Mr Stovold said the accelerated payment notice regime caused groups of investors in tax avoidance schemes to have to pay large amounts of tax with relatively little time to find the funds to settle these liabilities.
Mr Stovold said: “Many attempted to delay the collection of this tax through making representations but the latest annual report from HMRC confirms that, during 2016 to 2017, they received 40,000 representations, have considered 32,000 and upheld 90 per cent of these - although 20 per cent of those considered resulted in a reduction of the amount being assessed.
“The scale at which APNs have been issued over the last few years inevitably means that calculation and procedural errors were made by HMRC, but they will still claim this regime a success as they expect to collect £7bn in total with £4bn collected to date.”
Given the scale of errors, Mr Stovold said if your client has received an APN, it is very important that it is checked and challenged if the amounts are incorrect or HMRC have not satisfied the conditions to issue the notice.
However, once these avenues are explored, he warned other than a judicial review of the process, the only alternative left to most people is to try to agree manageable payment terms with HMRC as there are large penalties charged where payment dates are missed.