Psychic Sally didn't see her £2.9m APN coming

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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

Francois

I'm AccountingWEB's business editor. Feel free to get in touch with comments, tips, scoops or irreverent banter. 

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03rd Aug 2018 09:42

But this c£3m APN is for her bust company (which she owes c£300k), so her problem (almost certainly unless IA 1986 comes into play - which is most unlikely) is just a tenth of what the headline says here. (So perhaps she did see this coming after all?)

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to Justin Bryant
03rd Aug 2018 10:36

But if the company cannot pay the APN and get settlement with HMRC, she will have a loan outstanding in April 2019. Bet she didn't see that coming!

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to Rammstein1
03rd Aug 2018 12:51

Agreed (assuming that's right), but my point of course was that the story headline is misleading in saying there is a different c£3m APN problem for her personally, which clearly is not the case.

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By hiu612
03rd Aug 2018 10:17

Hard to imagine how a clairvoyant generates enough income to have a £3m tax bill to avoid in the first place. Surely not all of it was from the National Lottery programme in the 1990s.

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By Duhamel
to hiu612
03rd Aug 2018 11:45

Think you have confused her with Mystic Meg.

Psychic Sally's profits just show that there are a lot of gullible people out there.

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By Locutus
03rd Aug 2018 10:53

I have never heard of this lady.

Evidently there is a huge amount of money to be made “entertaining” people.

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03rd Aug 2018 11:13

Judge, jury, and executioner? How long will it be before a brief challenges that?

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to moneymanager
03rd Aug 2018 16:17

Challenges to APNs have been tried. Unfortunately the European Convention on Human Rights is mostly toothless when it comes to tax law.

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By TMR
03rd Aug 2018 16:59

I've now got an APN against my company which is disputed in its entirety but asking HMRC to internally review my matter is like watching paint dry. So the APN remains in place. I'm advised as a director I should call insolvency of my company as a result of the APN, the hell I will and why should I because I dispute the whole amount on what I see as 'reasonable grounds'. So the question is will HMRC do the dastardly deed, and did it do so on Psychic Sally - I don't know? If a creditor tries to enforce a disputed debt on a company it needs to go to court to prove it's debt to then serve relevant insolvency notice, so if HMRC can do this without having to go to court based solely on their own internal opinions how does that square with 'levelling the playing field' ? Me thinks David Richardson's playing field is slightly sloped towards HMRC and hardly level

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to TMR
06th Aug 2018 10:48

If your company gets served with an HMRC winding up petition (which will inevitably happen if it doesn't pay the APN) then you need to act quickly and hire a very good barrister who knows this area inside out and can turn up at the Insolvency Court to defend this, otherwise the company will definitely have a winding up order issued against it with all that entails i.e. the immediate death of the company. Ben Elliott at Pump Court Tax Chambers is pretty good in this area.

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By TMR
03rd Aug 2018 17:03

And the last time we witnessed such bully boy tactics was when a certain small Austrian German said to his Polish counterparts if you don't do as I say I'll send in the tanks. Now that levelled a lot of playing fields!

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to TMR
07th Aug 2018 12:04

Godwin's Law within 10, is that an AW record?

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