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Big business hit by APNs

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HMRC collected £943m from large businesses via accelerated payment notices (APNs), in 2015/16, according to international law firm Pinsent Masons.

The £943m was collected by HMRC’s Large Business Directorate, and relates to payments of corporation tax specifically. Pinsent Masons say that the collection is likely to relate to use of a range of suspected avoidance schemes and arrangements, including those making use of employee benefit trusts (EBTs) to reduce tax paid.

Heather Self, partner at Pinsent Masons commented: ‘The amount collected from large businesses via APNs is surprisingly high and a signal that HMRC is continuing to employ the tool widely.’

‘The tax will relate to a wide range of schemes and arrangements utilised by large businesses over recent years to reduce corporation tax payments. All large companies should be aware of the conditions under which APNs can be used, and prepare or seek professional advice accordingly’

‘The sums involved can be substantial and without the right of appeal, the notices present the potential for significant disruption,’ Self said. ‘It is also, of course, sensible to question the validity of any notice received. The use of APNs in a number of circumstances has now been subject to judicial review, with the Court of Appeal due to hear in July the Rowe case challenging the circumstances in which APNs were issued to film scheme users.’

HMRC issued more than 36,000 APNs to individuals and companies in 2015/16. These raised £2.4bn, up from £800m in the year to April 2015.

Pinsent Masons says that a range of EBT arrangements are currently under review, including those used by Rangers FC, heard in the high-profile Supreme Court case last month.