Raising The Stakes Part 3 – Accelerated Payment Notices

The accelerated payment notice provisions are in Chapter 3 of Part 4 of the Finance (No.2) Bill (clauses 212 - 222).

In the original consultation document, published on 12 August 2013 entitled "Raising the Stakes on Tax Avoidance", HMRC mooted the possibility of issuing accelerated payment notices (APNs), but only in the context of follower notices. In other words HMRC could not issue an APN unless a taxpayer had been issued with a follower notice.

However, in their subsequent consultation document published on 24 January 2014 entitled "Tackling Marketed Tax Avoidance", HMRC proposed that issuing an APN could be freestanding (ie not necessarily linked to the issue of a follower notice).

And the provisions of Chapter 3 are evidence of this. HMRC can give an APN to a person (P) if three conditions are met:

HMRC are enquiring into P's return or claim, or P has made a tax appeal which has not been determined. The return or appeal is on the basis that a particular tax advantage results from the arrangements that P has entered into. One or more of the following requirements are met: HMRC has issued a follower notice to P. The arrangements are DOTAS arrangements (in other words they are notifiable arrangements to which HMRC has allocated a DOTAS number). A GAAR counteraction notice has been given in relation to the advantage generated by the tax arrangements. Although there is still a link between the issue of a follower notice and the issue of an APN, it is possible for HMRC to issue an APN simply because a Disclosure of Tax Avoidance Schemes (DOTAS) number has been issued.

It is also notable that, for SDLT, between 2005 and 2010, promoters were obliged to notify HMRC of a discloseable scheme, and received a number as evidence that they had made that disclosure. There was no need, however, for the promoters to pass this number on to the scheme user. We anticipate that HMRC will confirm, shortly, that such numbers were not numbers under Section 311 FA04 (as stated in their early editions of the relevant DOTAS guidance notes); and also that they are likely to be "filtered out" between now and publication of the Finance Act, more of which in the next briefing.

HMRC's justification for linking an accelerated payment notice to DOTAS can be seen at paragraph 4.8 of the Tackling Marketed Tax Avoidance Consultation document:

"4.8 Linking the Payments Notice to users of DOTAS arrangements appears to the Government to be the right step because:

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