APN’s (accelerated payment notices)

APN’s  (accelerated payment notices)  were introduced in 2014, but are now starting to bite on UK businesses.

Basically, any business utilising a tax avoidance scheme, will now need to pay up first and dispute later.  This has far reaching consequences on UK businesses, especially on Cash Flow.

Since the new rules were introduced in 2014, over 60,000 APN’s have been issued , this has forced tax avoidance scheme users to pay up £3bn of disputed tax upfront while their tax affairs are investigated by HMRC.

Under the scheme, which removes the economic advantage of taking part in tax avoidance by forcing them to pay up first and dispute later, a taxpayer with an outstanding tax bill has 90 days once an APN is received to pay up or make representation to HMRC if they consider the notice incorrect.

HMRC comment: “The vast majority of avoidance schemes just don’t work. We’re determined to change the economics of tax avoidance by making it harder for the dishonest minority to cheat the system – collecting disputed tax upfront and tough new sanctions for enablers of tax avoidance will mean people will think twice.”

We have recently seen many businesses approach us for finance that are  “trapped” in this situation.  Typically, they have taken out a tax scheme, and enjoyed the extraction of cash blissfully thinking that the issue will “go away”.

Now HMRC come along and demand a “deposit” of the amount of tax potentially avoided, if you want to contest the case, obviously all businesses do…..  HMRC’s attitude is – If “we win” we keep it, “if you win, you can have it back”.

This has a potentially massive impact on cash flow, especially as HMRC are reluctant to enter into any Time to Pay agreements beyond 12m (if you are lucky).

As a bCommercial Finance Brokerage, we have access to funders more than happy to provide funding against these sort of scenarios.   
We have arranged 3 similar refinances this week alone.

Looking for No 4 …………..Contact us

Concentrated contractual debtors, can be tough to fund through Invoice Finance but…

Concentrated contractual debtors, in this case construction, can be tough to fund through Invoice Finance but…

We recently took a call from one of our Invoice Finance contacts, they were unable to help a prospect which had secured  significant work with a PLC main contractor.

In the evolving Alternative Finance sector there are now a number of lenders/platforms who will consider lending in circumstances like this and some will even led against applications rather than waiting for the invoice to be raised.

In this instance we were able to arrange a 75% prepayment against the invoice with the Lender content to continue to support the business through the term of the contract.

Happy client, and the introducer has indirectly supported the prospect, added value and strengthened its relationship with the prospect which may well lead to future business.

The Commercial Finance / Alternative Finance Market is constantly changing not every situation is fundable but It’s always worth giving us a call.