Last minute funding to help SMEs pay tax bills
Commercial finance provider LDF has launched a funding line to help taxpayers facing payment deadlines arising from accelerated payment notices issued by HMRC.
Accelerated payment notices, otherwise known as APNs, were first introduced in 2014.
Designed to change the economics of avoidance, the notice enables HMRC to request full upfront payment of disputed tax within 90 days.
Whilst there is no right of appeal, some taxpayers have sought judicial reviews to challenge the legality of these notices.
The first such review, brought by investors in the Ingenious Media partnerships case, was defeated in the high court in late July, clearing the way for HMRC to pursue £5.5bn in extra tax through APNs by 2020.
It is understood that HMRC has already issued 10,000 APNs, resulting in an estimated £768m in tax revenue outstanding. It aims to issue a total of 64,000 APNs.
This will mean that many more members of tax planning schemes, on HMRC’s disclosure of tax avoidance schemes (DOTAS) register, face tax demands under the APN scheme in the coming months.
LDF said it is highly likely that given the amount of outstanding tax owed, covering the cost of these demands will be a costly task for those affected. Late payment fees are estimated at 15 per cent of the tax balance owed.
Peter Alderson, managing director of LDF, said: “A lot of taxpayers receiving APNs are going to struggle to make the payments that HMRC is demanding.”
“In many cases, these are fairly ordinary, successful middle-class professionals and entrepreneurs, for whom finding a lump sum of tens or hundreds of thousands of pounds will be extremely difficult.”
He added: “These taxpayers need to be aware of all their options when it comes to meeting HMRC’s demands.
“There is alternative finance available to cover these costs, allowing taxpayers to regularise their tax positions with HMRC over a period that fits their finances.”
