Have you received an APN – an Accelerated Payment Notice – from HMRC?

If you have, you’ll know just how truly horrible they are because the tax has to be paid within 90 days of the date of the notice, there’s no right of appeal and all you can do is make ‘representations’ to HMRC to challenge the APNs on limited grounds – you cannot challenge it because you think it’s either unjust or inappropriate.  If you’ cannot pay the APN, you might need my help.  We’ve also put together a team of very experienced lawyers and tax experts who can help with claims against the professionals who advised you to go into and set up the scheme for which you’re falling foul.

So how many people are effected and how much tax is involved?

HMRC have recently reported that in the year and a half since their introduction in 2014, they have issued 44,000 APNs and collected in £2 billion of tax.  They have also said they expect to issue another 20,000 APNs in 2016, bringing in another £3.5 billion in tax, so the numbers are huge and the size of the individual payments are expected to rise, heaping more pressure on people to pay.

Do HMRC always get it right? Well no… they recently withdrew 2,000 notices that frankly they should never have issued.  They didn’t withdraw them until after a good number of the recipients paid up, even selling their homes to raise the cash.

If you receive an APN and can’t pay, please call me, Paul Brindley, licensed insolvency practitioner, on 01902 672323. 

Other useful links for you to read:

Pinsent’s summary of APNs – probably the shortest and best summary there is on the web.  Choose the download pdf option on that page.

DOTA – a link to the list of schemes for which HMRC has, or will soon, issue APNs.  If you are a member of a scheme that’s on the list, you’re in trouble!  Updated about every 3 months – you need to put it in your diary to look at the updated list every 3 months.  Last list issued January 2016.


Entrepreneur’s Relief and a Solvent Liquidation can see you keeping 90% of the money in your business

What’s Entrepreneur’s Relief?

Entrepreneur’s Relief is a UK government created scheme open to directors who own 5% or more of a company, which which allows them to enjoy a 10% tax rate when they sell their shares, on gains up to a lifetime limit of £10m, saving them two thirds of the tax they would otherwise have to pay without the relief.

The government are effectively saying ‘we know you’ve paid corporation tax on the profits in the company thus far, thanks for that, we are going to give you a break now that you are retiring / leaving this business, we are going to allow you to keep more of your money’.  It’s not one of those dodgy tax schemes we all read about!  And unlike a lot of tax law, this one is pretty simple.

Want to know more about Entrepreneur’s Relief?

Here are a few links you might like to go to to find out more:

Gov.uk’s site giving guidance on eligibility

Institute of Chartered Accountants In England & Wales webinar 

(A full hour’s webinar, more appropriate for accountants or tax advisers.  Skip the first 3 and a half minutes’ introduction)

Gov.uk’s site giving guidance on how your accountant claims relief for you.


So how do you make use of this?

  1. First off, talk to your accountant / tax adviser.  Their help will be needed, this is not something you will be able to do yourself.  They will assess whether your circumstances fit the legislation and later on they will submit your self assessment form claiming the relief.  Speak to your adviser before you sell the company/its business.  And if you don’t have an an accountant/tax adviser who can help you, call us, we’ll recommend one.
  2. You and your tax adviser liaise with us – we will plan how and when to put your company into a solvent, members’ voluntary liquidation.  The purpose of that liquidation is to distribute to you as shareholder what’s in the company whether it be cash or other assets (talk to us about the latter point, we have our own route for getting the cash / assets into your hands as shareholder very early indeed – not all liquidators do this).
  3. Your accountant claims for you the relief on your next self assessment tax return. You pay the 10% tax.

How much does it cost?

There’s no straight forward answer to this… it depends.  It depends on your and the company’s circumstances.  Ask for a fixed fee quotation – we are willing to work on a fixed fee basis, but will need to know what the role involves before we commit.  Suffice to say we work with companies whose owners save tens, even hundreds of thousands of pounds, making the exercise worthwhile.



Entrepreneurs' Relief and a Solvent Liquidation can see you keeping 90% of the money in your business

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Another (small) screw in the coffin of smaller community credit unions

A good many small community based credit unions have had a torrid time in recent years and probably right now aren’t seeing much of an improvement.  The Co-Op Bank’s decision to cut the interest it pays on its community bank accounts – such s their Community Directplus, Co-Operatives Directplu and Social Enterprise Directplus accounts – will prove to be another, small and slow, but certain turn on the screw in the coffin of already beleagured credit unions.

Small community based credit unions are really struggling – at best, they have seen flat income levels, at worst they’ve seen their income fall away, especially from grants and interest receipts.   Yet there is often little opportunity for them to reduce their overheads in line with the fall in income.  Trying to increase income by growing the loan book can often carry a disproportionate risk of bad debts so for some they have a stark choice – grow or merge or die a death of a thousand cuts.  The Co-Op decision will prove to be just another cut…

Let’s look at what the Co-Op is doing…

Interest rates paid on customer balances have never been lower, certainly not in my lifetime.  Until June the Co-Op will be paying a tiered rate of interest – Nil% on balances up to £1,999; 0.12%  on balances £2,000 to £9,999; 0.15% on balances £10,000 to £24,999; 0.18% on balances £25,000 to £99,999; 0.21% on balances £100,000 to £249,999; and 0.25% on balances over £250,000.

That’s to say the most the Co-Op will ever pay any credit union right now is one quarter of one per cent per annum… peanuts.

Yet those peanuts are being crushed!

The new rates from June 2015 will be: balances up to £24,999 Nothing, yes absolutely nothing – the Co-Op will get to keep your money for free!; £25,000 to £99,999 0.06% – a third of the already derisory amount it had paid previously; £100,000 to £249,000 0.09% – less than half it had previously paid; £250,000 to £499,000 0.18% – a cut of one third from the rate it had paid previously; over £500,000 0.25%, no change.

The message is clear… the Co-Op isn’t interested in supporting small organisations, it’s using you, the small credit union, to extract itself from its own financial difficulties … it doesn’t have the cohonas to abuse bigger organisations in the same way as they’re prepared to abuse you.

So it’s you, the smaller community based credit unions, and organisations just like you who will feel the brunt of this decision… it will be another straw on the camel’s back…

You see, right now, because you’re getting virtually nothing on the money you are sitting on and with additional grant income difficult to come by, the only way you can meet the regulator’s solvency targets might be by increasing the interest you receive on your loan book.  As you’re limited by law as to the maximum interest rate you can charge on the loans you make, this means you need to grow your loan volumes – the number of loans you put out and the amount you loan out.

The issue is you need to do this without increasing your bad debts.  Desperate people will go to any lengths – you will be lied to, some applications will be pure fabrication. How robust are your application procedures throughout your credit union?  You might get credit reports on potential new lending, but how reliable are those reports? – they are not as accurate as you’d hope!  And you probably can’t always rely on your longstanding members’ past savings history as an indication of their ability to repay any new loans – because people have so many ways nowadays of avoiding repaying their debts – not just the formal insolvency processes of bankruptcy, DRO, and IVA, and informal debt solutions such as DMP and DRO, but also pleading poverty in any debt collection process passing through the courts, and even disappearing.

It’s easy to see the situation whereby a credit union that’s already struggling with the the regulator could be forced into administration and then closure because of its bad debt experience and low level of bank interest income.