What an APN looks like

[ContrataxLtd]

First payments of APN's collected!

Hi Guys

I'm not sure if this article has been covered but if it hasn't I thought it may be of relevance to you all facing the threat of APN's in the not so distant future.

I've not confirmed sources etc. so please take it on face value but to summarise, HMRC have collected the first £32million from APN's issued back in August with 99% of them being paid on time.

Full article is on Accountancyage - http://http://www.accountancyage.com/aa/news/2386767/hmrc-pockets-gbp32m-from-tax-avoidance-scheme-users

Martin
Contratax Ltd

[jbryce]

Hi Guys

I'm not sure if this article has been covered but if it hasn't I thought it may be of relevance to you all facing the threat of APN's in the not so distant future.

I've not confirmed sources etc. so please take it on face value but to summarise, HMRC have collected the first £32million from APN's issued back in August with 99% of them being paid on time.

Full article is on Accountancyage - http://http://www.accountancyage.com/aa/news/2386767/hmrc-pockets-gbp32m-from-tax-avoidance-scheme-users

Martin
Contratax Ltd

"Some 30 scheme users were told in August they had 90 days to pay a total of around £29m of disputed tax upfront"

....I think these users are probably not representative of the average contractor on this site I doubt if HMRC will see a 99% payment within 90 days once the other 40,000 are issued.
Hands up all those who can pay ?

[centurian]

I've not confirmed sources etc. so please take it on face value but to summarise, HMRC have collected the first £32million from APN's issued back in August with 99% of them being paid on time.

99% sounds incredibly dubious, given that

a) You can ask HMRC to check the numbers again - although they may remove these from the figures on the basis that the payment is not late.
b) Getting 99% of any debtor to pay on time is very high in any circumstance
c) The likelihood of a JR causing all APNs to be placed on-hold
d) In order to get to 99%, you need a minimum sample size of 67 - (i.e. 66/67 - 98.507%). The 30 sample scheme users isn't enough.

The only way they could approach 99% is if they targeted the first batch at those they knew were going to pay up. Even so, I still don't buy it could be as high as 99% - they are just not that smart to target so effectively.

[DonkeyRhubarb]

"Some 30 scheme users were told in August they had 90 days to pay a total of around £29m of disputed tax upfront"

....I think these users are probably not representative of the average contractor on this site I doubt if HMRC will see a 99% payment within 90 days once the other 40,000 are issued.
Hands up all those who can pay ?

£30m is only about 0.5% of what APNs were expected to bring in.

Only 99.5% to go.

[slatt]

99% sounds incredibly dubious, given that

a) You can ask HMRC to check the numbers again - although they may remove these from the figures on the basis that the payment is not late.
b) Getting 99% of any debtor to pay on time is very high in any circumstance
c) The likelihood of a JR causing all APNs to be placed on-hold
d) In order to get to 99%, you need a minimum sample size of 67 - (i.e. 66/67 - 98.507%). The 30 sample scheme users isn't enough.

The only way they could approach 99% is if they targeted the first batch at those they knew were going to pay up. Even so, I still don't buy it could be as high as 99% - they are just not that smart to target so effectively.

the 99% figure seems to be for the amount of money paid back rather than the number of users who have paid, although this still doesn't make much sense as they start off saying;

"Some 30 scheme users were told in August they had 90 days to pay a total of around £29m of disputed tax upfront under the new Accelerated Payments Regime"

and they go on to say

"HMRC said more than 99% of this money was paid within the deadline. Taking into account other payments, it has received £32m in disputed tax to date."

now I'm no accountant, but 99% of 29 is not 32....

[jamesbrown]

"HMRC said more than 99% of this money was paid within the deadline. Taking into account other payments, it has received £32m in disputed tax to date."

now I'm no accountant, but 99% of 29 is not 32....

The highlighted bit. The numbers may be correct, but they were obviously targeted to allow for favourable headlines at the beginning. Less favourable figures to follow.

[ContrataxLtd]

I'd pretty much agree with everything that's been said, HMRC are obviously trying to spin it in a very positive way.

Likewise, the article implies that the average APN was around £1million so for those to have been paid up so quickly (if that is correct) it implies to me that the recipients have a substantial wealth. This probably does not sit in the same ball park as the average contractor facing an APN so I would imagine the 99% figure to rapidly decrease with the issue of further APN's.

I'd love to be able to verify the accuracy of the report but time isn't permitting at the moment.

Martin
Contratax Ltd

[DonkeyRhubarb]

There's a world of difference between contractor schemes and the stamp duty/film partnership/etc arrangements.

Not only are the other schemes mainly used by higher net worth individuals but they would typically only put a portion of their wealth into a scheme. That's why they can afford to pay the APN.

Contractors, on the other hand, put 100% of their annual income through the schemes year after year. In many cases the sum total of the APNs will be substantially more than a contractor's gross annual income.

It ain't going to be pretty.

[StrengthInNumbers]

I think lords wanted some review of the powers in 6 months. This is HMRC starting to paint a pretty picture for them and playing with numbers.

[Rab]

Does anyone know, do HMRC need to win a judicial ruling on yours or a similar scheme before they can issue an APN? Would they issue you with a follower notice (if there is such as thing) first?

My scheme was with Premier/Tenon and as Premier is no more, I have no idea if HMRC have already challenged my scheme in the courts or plan to do so in the near future.