HMRC steps up action on unpaid tax

HMRC steps up action on unpaid tax

HM Revenue & Customs has sharply increased the number of enforcement actions it has taken against individuals to force them to pay tax they owe.

According to accountancy firm Moore Stephens, the rate at which HMRC is beginning proceedings to recover money from accelerated payment notices (APNs) has more than quadrupled since January 2017.

Data from HMRC showed it has launched two new actions related to APNs every month between January 2017 and June 2018, making it a total of 34.

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This compares to one every other month when APNs were launched, between July 2014 and December 2016, making it 14 in total.

HMRC has now issued 79,000 APNs, according to Moore Stephens, which allow HMRC to demand tax it believes it is owed upfront without having to establish there is a liability in a tax tribunal or a court.

Dominic Arnold, head of tax investigations and disputes at Moore Stephens, said: "HMRC is stepping up its actions to chase down unpaid taxes and is not afraid to make people bankrupt or wind companies up to get the disputed money.

"APNs have created a ‘tax now, ask questions later’ approach. That kind of strong arm action has concerned a lot of tax professionals as these taxpayers are expected to re-mortgage their houses or sell their assets to pay a tax bill that HMRC has not proved in court.

"Individuals and businesses will need to know that ignoring HMRC and hoping the APNs will go away is not an option."

One of the reasons APNs are controversial is because the taxpayer only has 90 days to pay the disputed amount and has no right to appeal.

It emerged in April that HMRC has so far retracted 6,000 APNs, which had been issued in error, as reported in FTAdviser's sister title, the Financial Times.