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Accelerated Payment Notices And Follower Notices Explained

You've had an accelerated payment notice or follower notice and discovered there's no appeal to the tribunal. Here's what these notices are, why the law works this way, the 90-day clock, the penalties—and the limited ways you can still challenge them.

Liam Williams

Liam Williams

— 17 min read
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A demand has landed. It tells you to pay a large sum of disputed tax within 90 days. And when you go looking for the appeal form, you find there isn't one—at least not against the notice itself.

If you used a tax-avoidance scheme years ago—a film partnership, an employee benefit trust, a contractor loan, an SDLT planning arrangement—and HMRC has been enquiring into it, this is the letter you may have been dreading. It is almost certainly an accelerated payment notice (APN), a partner payment notice (PPN), or a follower notice (FN). They are creatures of Part 4 of the Finance Act 2014, and they are designed to do one thing: make you pay now and argue later.

Here is the reassurance you need first. This is not the end of the road. The substantive question—does your scheme work, do you actually owe the tax—has not been decided, and you have not lost it. What has changed is the timing of the money and the route for any challenge.

Around around 45% of tribunal appellants handle their cases without a representative, and much of this site is written for them. But be honest with yourself about this one: these notices are unusually high-value, short-fuse and penalty-heavy, and this is the area where getting proper advice matters most. This guide will help you understand exactly what you are holding and what you can do with it.

What These Notices Are (And Why They Exist)

Normally, when you appeal a tax assessment, you can ask to postpone paying the disputed tax until the tribunal decides who is right. That is the ordinary rule under section 55 TMA 1970, explained in our guide to postponing payment during an appeal. You keep the money in your pocket while the dispute runs.

An accelerated payment notice is that rule in reverse. It switches the postponement off and demands the disputed tax up front. Parliament's thinking was blunt: someone sitting in a tax-avoidance scheme had been enjoying a cash-flow advantage—holding on to money HMRC said was tax—for as long as the enquiry dragged on. The 2014 regime was built to remove that advantage by moving the money to HMRC while the underlying argument continues.

It helps to see these as three different things, because people who receive them often blur them together:

  • A follower notice says, in effect, "another taxpayer already fought this exact point and lost in a court ruling that applies to you—so settle, or risk a penalty."
  • An accelerated payment notice says, "pay the disputed tax now," and can stand on its own once certain conditions are met.
  • A partner payment notice is the partnership version of an APN—each partner in the scheme gets their own.

A follower notice and an accelerated payment notice often arrive together, but they do separate jobs and carry separate consequences. The rest of this guide takes them one at a time.

Follower Notices

A follower notice is HMRC's way of saying that the point you are arguing has already been decided against people in your position, so you should give up now.

When HMRC Can Issue One

Section 204 FA 2014 sets four conditions, and all of them must be met:

  • Condition A: there is an open tax enquiry, or an appeal you have made that has not yet been determined.
  • Condition B: your return, claim or appeal asserts a "tax advantage" (a tax saving—less tax, a repayment, a deferral) from particular "chosen arrangements" (your scheme).
  • Condition C: HMRC is of the opinion that there is a relevant judicial ruling—a court or tribunal decision—about arrangements like yours.
  • Condition D: HMRC has not already given you a follower notice for the same matter.

The heart of it is Condition C, and the test is exacting. Under section 205 FA 2014, a ruling is only "relevant" if its reasoning would—if applied to your arrangements—deny you the advantage. The word is "would", not "might". The ruling also has to be final: a Supreme Court decision, or one where the time for any further appeal has run out. A live, still-appealable case does not count.

HMRC cannot sit on this indefinitely. Under section 204(6), it has 12 months to give the follower notice, measured from the later of the date of the ruling and the date HMRC received your return or claim (or you made the appeal).

Corrective Action—And The Penalty For Not Taking It

A follower notice asks you to take "necessary corrective action" under section 208 FA 2014: amend your return or claim to give up the tax advantage, or agree in writing to do so, and tell HMRC. Do that within the time allowed and there is no penalty. In plain terms, that is the choice the notice forces on you: concede the scheme point now and pay the tax it sheltered, with no penalty—or fight on and face the penalty below if the ruling really does apply to you.

Refuse, and a penalty follows. This is where you need the current figure, because the most commonly quoted number is now wrong. The follower-notice penalty is 30% of the denied tax advantage (section 209 FA 2014). It used to be 50%—and that is the number you will still see on GOV.UK and in older court judgments and practitioner articles. Finance Act 2021 cut it to 30%, but the published guidance has not caught up. Treat any "50%" you read as out of date; the operative law is 30%.

Two more numbers complete the picture. HMRC can reduce the penalty for the quality of your co-operation—helping it quantify and counteract the advantage—but section 210 FA 2014 sets a floor: it cannot go below 10% of the denied advantage. And if you fight on and your continued appeal is later found to have been unreasonable, Finance Act 2021 added a separate penalty of up to a further 20% (section 208A, assessed under section 209).

Before any of that bites, you get a window to object. Under section 207 FA 2014 you have 90 days to make written representations to HMRC—for example, that one of the conditions was not met, or that the ruling HMRC relies on is not actually relevant to your scheme.

The Follower-Notice Penalty IS Appealable

Here is the crucial distinction that runs through this whole guide. You cannot appeal the follower notice itself to the tribunal—but you can appeal the penalty for not taking corrective action.

Section 214 FA 2014 gives you a right of appeal to the First-tier Tribunal against the section 208 penalty, within 30 days, treated much like an appeal against a tax assessment. The grounds you can run include that a condition in section 204 was not met, that the ruling HMRC specified is not relevant to your arrangements, that the notice was out of time—and, importantly, that it was reasonable in all the circumstances for you not to take the corrective action. That last ground is your safety valve: if you genuinely and reasonably believed the ruling did not apply to you, the tribunal can cancel the penalty even though it cannot touch the notice. For help turning that into a proper written ground, see our guide to writing grounds of appeal.

Accelerated Payment Notices

An accelerated payment notice does something narrower and harder-edged: it makes you pay the disputed tax now, regardless of where your enquiry has got to.

The Three Conditions

Section 219 FA 2014 requires all three of the following:

  • Condition A: a tax enquiry is open, or you have an appeal that has not been determined.
  • Condition B: your return, claim or appeal asserts a tax advantage from the chosen arrangements.
  • Condition C: at least one of three things is true—HMRC has given (or is giving) you a follower notice for the same matter; or your scheme is a DOTAS scheme (DOTAS is the disclosure-of-tax-avoidance-schemes regime under which promoters register schemes and HMRC issues each one a scheme reference number, or SRN); or HMRC has given a counteraction notice under the General Anti-Abuse Rule.

Two common objections do not work, and it is worth being clear about them now so you do not waste your representations on them. "The promoter never told me the scheme's reference number" is not a valid objection—the DOTAS route into an APN turns on whether the scheme has an SRN, not on whether you were told it. And "my scheme isn't on HMRC's published list" is not a valid objection either—that list is a courtesy, not the gateway. If the statutory conditions are met, the APN stands.

The 90-Day Clock And The Penalty For Missing It

Once an APN is given, the payment period is 90 days (section 223 FA 2014). If you make representations, the deadline is the later of that 90 days and 30 days after HMRC notifies you of its decision on those representations. Either way, the clock is short—diarise the date the moment the notice arrives.

There is no appeal against an APN. Your only challenge short of court is written representations under section 222 FA 2014, within 90 days, on limited grounds: that one of the section 219 conditions was not met, or that the amount HMRC has specified is wrong. HMRC then either confirms the notice (with or without amendment), amends it, or withdraws it.

Missing the payment deadline carries its own escalating penalty under section 226 FA 2014. It comes in three tiers, each 5% of the unpaid amount:

  • 5% if the accelerated payment is still unpaid at the end of the payment period;
  • a further 5% if it is still unpaid 5 months after the "penalty day" (the day after the payment period ends);
  • a further 5% if it is still unpaid 11 months after the penalty day.

That is a cumulative penalty of up to 15% on top of the tax itself, before you even reach enforcement. These sit alongside HMRC's wider penalty framework, which we cover in HMRC penalties explained.

Partner Payment Notices

If your scheme was run through a partnership—as many film and investment schemes were—the mechanics shift slightly, but the effect is the same.

Where a partnership enquiry or appeal is in progress, HMRC does not issue a single APN to the partnership. Instead, under Schedule 32 FA 2014, it issues a partner payment notice to each relevant partner individually. Every partner is served with their own notice, for their own share of the disputed tax (their "understated partner tax"), and each runs their own 90 days clock.

The structure mirrors the APN regime: the same three-condition gateway, the same 90 days representations window, and the same 5% + 5% + 5% late-payment penalty under section 226. So if you are one of dozens of partners in a film partnership, do not assume someone else is dealing with it on the partnership's behalf. Your notice is yours, your clock is yours, and your penalty is yours.

Why There's No Tribunal Appeal—The Hok Problem

The instinct when one of these notices lands is to take it to the tribunal and say it is unfair: the scheme was sold to you years ago, the law has been applied retrospectively, you were misled. These feel like powerful arguments. The problem is that the First-tier Tribunal is the wrong room for them.

The First-tier Tribunal is a creature of statute. It can decide whether the law was applied correctly and whether an amount is right, and nothing more. It has no power to supervise how HMRC exercised its powers—no judicial-review jurisdiction. That is the lesson of HMRC v Hok Ltd [2012] UKUT 363 (TCC), explained in full in our guide to Hok and why "it's not fair" is not a ground of appeal. "This is unfair", "this is retrospective", "I was mis-sold this scheme"—these are public-law arguments. They are arguments about HMRC's conduct, and the place to make them is judicial review in the Administrative Court (the High Court), not the tribunal. Judicial review is the legal process for challenging whether a public body acted lawfully, rationally and fairly in the public-law sense. And if your real grievance is that you were mis-sold the scheme in the first place, that is a complaint against the promoter or adviser who sold it—through their professional body or the courts—not something the tax tribunal can put right. If you would rather simply draw a line under the scheme, you can also ask HMRC about settling the underlying dispute, which we cover in settling your tax tribunal case.

Be realistic about the odds there, though. The big judicial-review challenges to the APN regime were mostly fought and lost. In R (Rowe) v HMRC [2017] EWCA Civ 2105, the lead case for dozens of film-scheme taxpayers, the Court of Appeal dismissed arguments based on retrospectivity, the right to property under Article 1 of the First Protocol to the European Convention, and procedural fairness. It held that the interference with property was provided for by law and proportionate, and that the regime was not truly retrospective because scheme users had always known they might have to repay. Earlier, in R (Walapu) v HMRC [2016] EWHC 658 (Admin), the High Court reached the same conclusion: the statutory representations process gave taxpayers ample opportunity to be heard, and the human-rights and fairness arguments were "not sustainable". The outcome might feel stark, the court accepted—but it was lawful.

The Limits That Do Exist—Haworth And Locke

None of that means these notices are bulletproof. The courts have drawn real boundaries around HMRC's power, and on the right facts they bite.

The headline limit on follower notices comes from R (Haworth) v HMRC [2021] UKSC 25, the first follower-notice challenge to reach the Supreme Court—and the taxpayer won. The court held that to give a follower notice, HMRC cannot merely think the earlier ruling might or is likely to deny the advantage. It must be of the opinion that there is no scope for a reasonable person to disagree that the ruling would deny it. That is a high bar, deliberately so: the Supreme Court read the power narrowly because it intrudes on the constitutional right of access to the courts—it pressures people to give up a fight before a judge has heard it. On the facts, HMRC's own records showed it had only concluded the earlier case "likely" applied, which was not enough. The follower notice was quashed.

R (Locke) v HMRC [2019] EWCA Civ 1909 shows the same principle in action one rung down. The Court of Appeal quashed both a follower notice and an accelerated payment notice because the court ruling HMRC relied on was not actually relevant: it had decided a different question, about a different kind of arrangement, from the one in front of it. The "relevance" condition is not a formality.

So there is genuine hope here—but it lives in a precise argument that a statutory condition was not met, not in a general plea of unfairness. The bar is high, and these are exactly the points on which advice earns its keep.

What About The Penalty?—The Beadle Trap

You now know two things that sit awkwardly together: you cannot appeal the notice to the tribunal, but you can appeal a penalty to the tribunal. So can you challenge the notice indirectly—wait for the penalty, appeal that, and argue the underlying notice was invalid as your defence?

No. This is the trap, and it has a name: Beadle v HMRC [2020] EWCA Civ 562. The Court of Appeal held that on an appeal against the penalty for not paying a partner payment notice, the tribunal cannot entertain a collateral public-law challenge to the validity of the underlying notice as a defence. Letting that in would be, in the court's words, a statutory appeal by the back door against a notice Parliament had deliberately made non-appealable. The validity of an APN or PPN is for judicial review—not for the tribunal, even at the penalty stage. The same reasoning applies to APNs as to PPNs.

There is a sharp practical edge to this. The court also held that a genuine belief that the notice was invalid is not a reasonable excuse for paying late. So you cannot withhold payment on the basis that you think the notice is wrong and then rely on that belief to escape the late-payment penalty. If you want to challenge validity, you challenge it by representations and judicial review—and you generally pay (or arrange to pay) in the meantime.

It is worth being precise about how Beadle relates to Hok. They reach a consistent destination—public-law challenges to these notices belong in judicial review, not the tribunal—but they get there by different roads. Hok is about the powers the tribunal was given (it has no judicial-review jurisdiction). Beadle is about the route by which a public-law argument must be brought, and it reasons through long-standing case law on that point (O'Reilly v Mackman and Wandsworth LBC v Winder [1984] UKHL 2) rather than through Hok. They point the same way; one does not simply restate the other.

What the tribunal can still consider in a penalty appeal is the statutory penalty itself: was it correctly assessed, was there a reasonable excuse for late payment of the kind the law recognises. That is a narrower question than "was the notice valid"—but it is a real one.

How To Actually Challenge The Notice

So if the tribunal is closed to you on the notice itself, what is actually open? There are four moves, in rough order of priority.

One warning overrides all of them: none of these steps pauses the 90-day payment clock. Making representations, applying for judicial review, and fighting the underlying enquiry all leave the deadline—and the penalties—running. Beadle is the authority that you must pay, or arrange to pay, even while you dispute. So handle the money and the challenge in parallel, never one after the other.

1. Make written representations—within 90 days. This is your first and cheapest step, and it is the one the courts expect you to use. For an APN or PPN, that is section 222 or Schedule 32 paragraph 5; for a follower notice, section 207. Making representations is free: you send them in writing to HMRC, at the address on the notice, before the deadline. The grounds are limited—a condition was not met, or the amount is wrong—so set out clearly which condition you say fails or why the figure is too high, with any supporting evidence. A precise, well-evidenced representation can lead HMRC to amend or withdraw the notice, and it is reviewed by an officer unconnected with the team that issued it.

In R (Archer) v HMRC [2019] EWCA Civ 1021, the Court of Appeal made the practical point that representations should come first and judicial review is a last resort. Mrs Archer's costs claim failed in part because she had gone to court before exhausting the representations route. The court observed that a taxpayer normally has nothing to lose by making representations, because payment is not due until 30 days after HMRC's determination of them—so making them buys time as well as a chance of success.

2. Judicial review—as a genuine last resort. If representations fail and you have a real public-law argument—HMRC misapplied a condition, relied on an irrelevant ruling (as in Locke), or formed an opinion no reasonable person could form (as in Haworth)—judicial review in the Administrative Court is the formal route. Go in clear-eyed: it is procedurally strict, it carries real cost and costs-risk, the time limit is tight (promptly, and in any event within three months), and, as Rowe and Walapu show, the broad "it's unfair" challenges have mostly failed. This is not a step to take without advice.

3. Ask for Time to Pay if you cannot fund it. If the conditions are met and you simply cannot raise the money in 90 days, the answer is not to ignore the notice—it is to ask HMRC for a Time to Pay arrangement, which spreads the accelerated payment over instalments you can manage. Ask before the deadline, by phone or in writing; agreeing one generally heads off the 5% late-payment penalties, though late-payment interest (currently 7.75%) still runs on the outstanding amount until it is cleared. The alternative is worse: if you neither pay nor arrange Time to Pay, the 5% penalty tiers stack up and HMRC moves to enforcement—debt-collection action that can mean taking control of your goods, or in serious cases bankruptcy for an individual or winding-up for a company. Engaging early is far better than letting that run.

4. Keep fighting the real battle—the underlying enquiry. This is the point that should steady your nerves. An accelerated payment notice does not decide your tax. It is a payment on account of a dispute that is still live. The open enquiry or appeal—the one about whether your scheme actually works—continues in the normal way, and that is where the substantive tax is finally decided. Our guide to HMRC enquiries and closure notices explains how that process plays out. Be prepared for it to take time: these disputes commonly run for years, so HMRC may hold your accelerated payment for a long while before any refund. And if you ultimately win that underlying dispute, the accelerated payment is refunded with interest—repayment interest currently runs at 2.75%, as explained in interest on unpaid tax. Paying the APN is not conceding the war.

What To Do Now

If a notice has just arrived, work through this in order:

  1. Identify which notice it is. Is it a follower notice (settle this point or face a penalty), an accelerated payment notice (pay the disputed tax now), or a partner payment notice (your individual share of a partnership scheme)? The heading and the wording will tell you. You may have received more than one.

  2. Diarise the 90-day date immediately. The payment period and the representations window both run on tight clocks. Mark the deadline now, before anything else, and work back from it.

  3. Consider written representations. If you think a condition was not met or the amount is wrong, the section 222 / section 207 / Schedule 32 representations route is your first and cheapest challenge—and the courts expect you to use it before any thought of judicial review.

  4. Get advice—genuinely. These notices are high in value, short on time, and heavy on penalties. The arguments that work (relevance, conditions, Haworth-style challenges) are technical, and the consequences of getting it wrong are large. This is the part of tax disputes where professional advice is most worth its cost.

  5. Do not ignore it. Whatever you decide, silence is the worst option. The 5% + 5% + 5% late-payment penalties, and then enforcement, follow non-payment automatically. If you cannot pay, say so and ask for Time to Pay. If you want to challenge, make your representations in time.

Key Legislation And Resources

Legislation

Follower notices (Chapter 2, Part 4 FA 2014)

Accelerated payment notices (Chapter 3, Part 4 FA 2014)

Partner payment notices

  • Schedule 32, FA 2014 — partner payment notices: each partner served individually; section 226 penalty applies

Key Cases

  • R (Haworth) v HMRC [2021] UKSC 25 — Supreme Court; to give a follower notice HMRC must be of the opinion there is no scope for a reasonable person to disagree that the earlier ruling would deny the advantage; notice quashed
  • R (Locke) v HMRC [2019] EWCA Civ 1909 — Court of Appeal; follower notice and APN both quashed because the ruling HMRC relied on was not relevant to the taxpayer's arrangements
  • R (Archer) v HMRC [2019] EWCA Civ 1021 — Court of Appeal; make section 222 representations first—judicial review is a last resort, and a taxpayer normally has nothing to lose by making representations
  • R (Rowe) v HMRC [2017] EWCA Civ 2105 — Court of Appeal; lead film-scheme challenge dismissed; retrospectivity, property-rights and fairness arguments against APNs/PPNs rejected
  • R (Walapu) v HMRC [2016] EWHC 658 (Admin) — High Court; early APN judicial review dismissed; human-rights and fairness arguments held not sustainable
  • Beadle v HMRC [2020] EWCA Civ 562 — Court of Appeal; the tribunal cannot hear a collateral challenge to a notice's validity in a penalty appeal, and a belief the notice was invalid is not a reasonable excuse for late payment

GOV.UK Guidance

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This article is for informational purposes only and does not constitute legal or tax advice. For advice specific to your situation, consult a qualified tax adviser, accountant, or solicitor.

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