More than 100 UK film scheme investors that have been issued with accelerated payment notices (APNs) demanding payment of disputed tax upfront will be able to challenge the policy in the courts. The High Court has given permission for a judicial review of HMRC’s APN demands, brought about by investors in film partnerships set up by Ingenious Media. Judicial reviews consider the legality of public body decisions. The APNs, which were introduced in July 2014, allow HMRC to demand upfront the payment of tax it has associated with avoidance, rather than demanding the tax after winning a tribunal case. HMRC says it has issued APNs worth over £1bn since the new regime came into force. Taxpayers have 90 days to pay the tax to HMRC once an APN has been issued, unless they are successful in contending that the notice should not have been issued.
Jason Collins, head of tax at Pinsent Masons, the law firm which represented the Ingenious Media film scheme investors applying for judicial review, said that the claim would be likely to be heard by the High Court in the early summer. In the meantime, the APNs would ‘be suspended until the High Court [gives] its judgment’. Collins added that ‘in the absence of a right of appeal against an APN, judicial review is effectively the only remedy potentially available to the recipient of an APN. Judicial review is a process through which individuals, businesses and other affected parties with “sufficient standing” can challenge the lawfulness of decisions or actions of public bodies, such as HMRC.’
Collins also said that there were several grounds for arguing that the APNs in these cases were unlawful, including the fact that taxpayers issued with an APN have no right to appeal, which is not compatible with human rights legislation. He said the APNs could also be challenged on the basis that the legislation is retrospective, because it applies to DOTAS schemes which were entered into before the APN rules came into force.
A HMRC spokesperson told Tax Journal, ‘We don’t comment on identifiable taxpayers … We are prepared for possible challenges to the accelerated payments legislation, which has been enacted by Parliament and is intended to ensure that disputed tax sits with the exchequer. We are confident of our position and we will be pressing to have any challenges that emerge resolved as quickly as possible. We will be continuing to issue APNs and people should continue to pay them.’
More than 100 UK film scheme investors that have been issued with accelerated payment notices (APNs) demanding payment of disputed tax upfront will be able to challenge the policy in the courts. The High Court has given permission for a judicial review of HMRC’s APN demands, brought about by investors in film partnerships set up by Ingenious Media. Judicial reviews consider the legality of public body decisions. The APNs, which were introduced in July 2014, allow HMRC to demand upfront the payment of tax it has associated with avoidance, rather than demanding the tax after winning a tribunal case. HMRC says it has issued APNs worth over £1bn since the new regime came into force. Taxpayers have 90 days to pay the tax to HMRC once an APN has been issued, unless they are successful in contending that the notice should not have been issued.
Jason Collins, head of tax at Pinsent Masons, the law firm which represented the Ingenious Media film scheme investors applying for judicial review, said that the claim would be likely to be heard by the High Court in the early summer. In the meantime, the APNs would ‘be suspended until the High Court [gives] its judgment’. Collins added that ‘in the absence of a right of appeal against an APN, judicial review is effectively the only remedy potentially available to the recipient of an APN. Judicial review is a process through which individuals, businesses and other affected parties with “sufficient standing” can challenge the lawfulness of decisions or actions of public bodies, such as HMRC.’
Collins also said that there were several grounds for arguing that the APNs in these cases were unlawful, including the fact that taxpayers issued with an APN have no right to appeal, which is not compatible with human rights legislation. He said the APNs could also be challenged on the basis that the legislation is retrospective, because it applies to DOTAS schemes which were entered into before the APN rules came into force.
A HMRC spokesperson told Tax Journal, ‘We don’t comment on identifiable taxpayers … We are prepared for possible challenges to the accelerated payments legislation, which has been enacted by Parliament and is intended to ensure that disputed tax sits with the exchequer. We are confident of our position and we will be pressing to have any challenges that emerge resolved as quickly as possible. We will be continuing to issue APNs and people should continue to pay them.’
