What is the difference between Advanced and Accelerated Payment Notifications?

Ever since HMRC changed the rules regarding upfront tax payments for users of tax avoidance schemes last year, there has been constant confusion surrounding the two biggest terms that have come about as a result of this new taxing policy – Advanced Payment Notifications and Accelerated Payment Notifications.

The truth is, there is absolutely no difference between the two. They both refer to the exact same method undertaken by HMRC in which an individual or business that has been using a tax avoidance scheme is issued an Advanced/Accelerated Payment Notification instructing the taxpayer to pay a sum of tax upfront, mirroring the policy used for the vast majority of other taxpayers.

The terms can therefore be used interchangeably. Accelerated Payment Notification is the official term as stated in the policy guidelines publicly released by HMRC to introduce and explain the new scheme, whereas Advanced Payment Notification was coined by those in the industry simply seeking a new, and possibly less forceful, term for the plan.

Any disputes that arise following an Accelerated Payment Notification and subsequent tax payment to HMRC are then resolved by the two parties involved. However, unlike before where the taxpayer would be entitled to keep the disputed amount until a decision is made, HMRC now hold onto the disputed tax until a suitable outcome is reached.

Advanced Payment Notifications have therefore been put in place to remove any tax advantages gained by users of tax avoidance schemes.