Here’s something Psychic Sally didn’t see coming: An astronomical £2.9m tax bill and an Accelerated Payment Notice (APN).
Sally Morgan, a popular clairvoyant, is the director of Sally Morgan Enterprises. The troubled company has now gone into voluntary liquidation amid HMRC’s hefty claim and an Accelerated Payment Notice (APN).
A report by the liquidators, an Essex accounting firm called FRP Advisory, details Morgan’s extensive financial troubles. The tax authority’s claim against Morgan stands at a towering £2,919,354.
Morgan disputes the number, but HMRC has slapped her with an APN. The issue of an APN un-postpones any of the relevant tax which was already postponed and prevents any subsequent postponement of that tax.
Financially, it’s not looking good for Morgan. “Based on the information available to date and the assumptions made, it is currently uncertain as to the level of monies available to distribute to unsecured creditors,” FRP’s report stated.
Morgan’s case is yet another blockbuster application of the APN. Since APNs were introduced in the Finance Act 2014, HMRC has issued more than 79,000 to individuals using tax avoidance schemes.
Last year, HMRC reported that it had collected more than £4bn through APNs, with the average bill for large companies trying to avoid tax at around £6m.
On receipt of an APN, the taxpayer has 90 days in which to take action. If the taxpayer accepts the APN, the amount demanded should be settled. But there is no right of appeal against an APN and disputing the matter can be a Kafkaesque nightmare.
“The taxpayer may make representations to HMRC,” as Jacqueline Kimber explained on AccountingWEB, “if they wish to dispute either the amount demanded or the validity of the APN, if they believe that the conditions for issue have not been met. These representations must be made in writing within the 90 day period.”
But Psychic Sally might find it easier to commune with the dead than disputing her APN: HMRC has said it upholds 90% of decisions.
The effectiveness of the APN has been hailed by HMRC’s senior executives. At the time of HMRC’s sixth judicial review victory last year, David Richardson, HMRC’s director general for customer compliance group, hailed APNs as levelling “the playing field by changing the economics of avoidance”.
About Francois Badenhorst
I'm AccountingWEB's business editor. Feel free to get in touch with comments, tips, scoops or irreverent banter.