Our website uses cookies to enhance the visitor experience (what's a cookieCookies are small text files that are stored on your computer when you visit a website. They are mainly used as a way of improving the website functionalities or to provide more advanced statistical data.). Are you happy for us to use cookies during your visits?
Please note: continuing without making a choice equates to giving us your consent, which you can withdraw at any time via our cookies policy page.

Follower Notices and Accelerated Payment Notices (APNs)

Newsletter issue - November 2015.

When a court or the tribunal issue a ruling that potentially resolves a large number of cases, many 'followers' (i.e. taxpayers with similar circumstances) agree to settle their affairs with HMRC, but some do not. They argue that small differences in the arrangements mean that the decision does not apply to them. HMRC will issue a follower notice to such taxpayers requesting them to settle the liability they believe is due.

Alongside the 'follower' rules are the accelerated payment rules. HMRC may issue an accelerated payment notice (APN) requesting the recipient to pay the disputed tax and/or NICs. This means that if a person is given a follower notice but decides not to settle up with HMRC, HMRC can still request the tax they believe is due under the accelerated payment rules. The broad effect of these double-edged rules is that the Exchequer gets to hold on to the tax during a dispute period, so removing any cashflow advantage from the taxpayer.

APNs should not be ignored - anyone receiving a notice has 90 days to either pay the amount requested or make appropriate representations. Failure to act by the due date could lead to late payment penalties or surcharges becoming due and potential enforcement action being taken to recover the tax or NICs.

It is also worth noting that an APN will only cover the tax or NICs advantage relating to the specific avoidance scheme covered by that notice. The amount shown may not be the final liability agreed, which may be larger or smaller than the amount of the APN. It will not include any interest, penalties or other tax that may be due in the year. Therefore when the enquiry or appeal is finalised, there may be additional amounts to pay.

HMRC may issue a 'follower notice' if the following four conditions are satisfied:

Condition A: There must be an enquiry in progress into a tax return or claim made by the taxpayer and there must be a 'live' appeal with HMRC or the Tribunal;

Condition B: the return, claim or appeal must be made on the basis that particular tax arrangements lead to tax advantages;

Condition C: HMRC are of the opinion that there is a judicial ruling which is relevant to the chosen arrangements. In addition, any follower notice must be given within 12 months of the later of:

  • the date the claim, return or appeal was received; or
  • the date the relevant judicial ruling was made;

Condition D: no previous follower notice has been given to the same person in the same circumstances.

When a person is served with a follower notice, they have 90 days from the date of the notice within which to make representations in writing to HMRC objecting to the notice on the grounds that:

  • conditions A, B or D above are not met;
  • the judicial ruling specified in the notice is not relevant to the arrangements entered into; or
  • the notice was given outside the 12-month statutory limit.

HMRC must consider the representations taking into account the grounds for objection and must then decide whether to confirm (with or without amendment) or withdraw the notice and notify the taxpayer accordingly. There is no right to appeal against a follower notice, which means that the only way in which to challenge a HMRC decision is by making an application for judicial review.

With regards to APNs, HMRC may issue an APN where one or more of the following conditions are satisfied:

  • a follower notice has been issued;
  • a DOTAS notifiable arrangement has been used; or
  • they are subject to a GAAR counteraction notice.

Further information and guidance on this subject can be found at: www.gov.uk/government/publications/follower-notices-and-accelerated-payments/follower-notices-and-accelerated-payments.

  • Auto enrolment icon

    Auto Enrolment

    Workplace pensions rules are changing.
    Be prepared for auto enrolment, see how we
    can help and read up on our guidance notes.


  • Cloud accounting icon

    Cloud Accounting

    With our online bookkeeping packages, our support
    services are only a click away.
    Discover cloud accountancy solutions to bring your finances up to date.

  • Pay less tax icon

    Pay Less Tax

    Our experienced tax advisors can help you
    make the most of your options to reduce
    your tax bills.


  • Make more profit icon

    Make More Profit

    From business plans to management accounts,
    our business services will ensure you are in
    control of your business finances.


  • Source finance icon

    Source Finance

    Our experienced partners can guide you
    in getting the finance you need to make
    your business grow. Read our guides or
    contact us for a free consultation.

  • Outsource your payroll icon

    Outsource Your Payroll

    Let us handle payroll compliance for your
    business. We can deal with HMRC on your
    behalf, and take the stress out of RTI.