Firm warns against HMRC bankrupting taxpayers over APN disputes 03 November 2015

HMRC should not pursue insolvency proceedings to demand that tax allegedly owed from years ago be paid in full until the underlying dispute has been resolved, warned law firm RPC.

The London-based law firm said there are growing concerns that accelerated payment notices (APN), which have no right of appeal, are forcing taxpayers into bankruptcy.


RPC said this can have irreversible consequences on individuals, and claimed that many taxpayers are being forced to sell their property and assets at less than their full market value to free up cash to pay APNs.

The firm also pointed out that individuals in the legal, accountancy, or financial services professions, would also be unable to practice whilst still going through the process of bankruptcy.

“HMRC should confirm that they will not force taxpayers into bankruptcy for non-payment of APNs,” said Adam Craggs, partner and head of tax at RPC.

“It is extraordinary that taxpayers may face bankruptcy as a consequence of being unable to pay an amount demanded in an APN, when that sum remains in dispute and remains to be determined by an independent tribunal or court as being lawfully due."


Craggs said taxpayers who are forced into bankruptcy as a consequence of not paying of an APN will face a life-changing situation: “Those working in the professions, or regulated industries, could face losing their livelihoods.”

He compared the APN situation to VAT where HMRC accepts ‘hardship’ as a valid reason for non-payment of disputed VAT: “A VAT appeal is proceeding before the Tax Tribunal and there is no reason why it cannot do the same for APNs.”

Modestly well-off

Craggs also said APNs pose a problem lower down on the wealth ladder: “APNs are not only being issued to high net worths, HMRC is also targeting  modestly well-off self-employed IT contractors who are now being pursued for alleged tax on income earned, in some cases, more than a decade ago.”

In August, a case challenging the legality of APNs was rejected by the High Court.

In September, UK-based financial services provider LDF launched a loan facility to help taxpayers meet payment deadlines arising from accelerated payment notices. 

"It is extraordinary that taxpayers may face bankruptcy as a consequence of being unable to pay an amount demanded in an APN"

By Katherine Denham, published on the International Adviser website on the 3rd November 2015 -