HMRC new powers to ask for payment at the start of an enquiry are coming into force .These measures appear to be designed to put people off using avoidance arrangements even where they are within the terms of the legislation.
Where HMRC believes a scheme has been used to avoid tax they can now issue an advance payment notice (APN) once they have started an enquiry, but before they have proved that an arrangement involves an unfair tax advantage.
The notice can be issued once the following conditions have been met:
HMRC must have launched an enquiry
- There must be a tax advantage arising from using the scheme
- HMRC has notified you that it believes that the scheme you have used involves tax avoidance
If issued with an APN you are able to appeal within 90 days but only if you believe one of the three conditions listed above has not been met. You also have the right to ask to pay the tax by instalments where the payment would lead to hardship.