There is very real concern regarding the legality of HMRC demands.
Our Taxflash in October noted that Accelerated Payment Notices (APNs) issued by HMRC may not be valid. UHY Hacker Young have been leading the way in ensuring that HMRC only seek to collect tax where they have a legal right to do so. Currently, we have two judicial reviews due to be heard in March and have been engaged for a third by Cotter Solutions Ltd, all of which question the legality of HMRC demands.
Noticeably, there is very real concern regarding APNs and the retrospective nature of the legislation. In its Budget 2014 Report, the Treasury Committee specifically raised concerns regarding the new legislation and, in their submissions regarding the same, both the Law Society and the tax institutes also raised serious concerns.
Further, HMRC have very wide powers of collection and on issue of a demand has unfettered powers to seek to distrain a taxpayer's assets and also seek a county court judgement. There is little doubt that HMRC will seek to use these powers if APNs go unchallenged and unpaid.
Our tax investigation and litigation team at UHY have been engaged by Cotter Solutions Ltd, a company specifically set up to challenge APNs and HMRC collection actions where it is believed these are beyond HMRC's legal powers. The aim of the company is to ensure that individual taxpayers have the knowledge and resources to balance the scales where it is believed there are bona fide legal reasons for challenging HMRC when they seek to enforce a payment of tax.
Together with leading tax counsel, we have identified a number of grounds for challenging APNs for Cotter Solutions Ltd. However, it is clear that the grounds depend on the circumstances of the particular taxpayer and, therefore, 'one size fits all' is unlikely to be the case. Consequently, it may be necessary to take a number of separate cases forward.
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