The Revenue have been forced to acknowledge that Accelerated Payment Notices (APNs) sent to 2,000 Montpelier tax scheme participants, should never have been issued. In a letter notifying the affected individuals, HMRC advised the fact that one of the three conditions that must be present for it to be able to issue an APN, was missing. This being that the scheme was not strictly notifiable under the Disclosure of Tax Avoidance Schemes (DOTAS) provisions, and a salient point which had been overlooked by HMRC. It seems whilst Montpelier declared the scheme (IR 35 Manx Partnership) under DOTAS in 2004, it was not in fact notifiable under the DOTAS provisions, as they applied at the time. The HMRC letter also states: “Neither of the two alternative criteria for issuing an accelerated payment notice apply, and we have therefore withdrawn the notice.” But those affected are unlikely to celebrate. The demands for accelerated payments were issued back in April 2015 and some recipients have had to sell their homes to settle .Others have been forced to re-mortgage or empty savings accounts to meet the demands, which were often enforced by HMRC debt collectors or officials on the APN recipient’s doorstep. Fortunately for these investors, a refund of the sum their APN demanded appears to be a firm prospect, as implied in the Finance Act 2014, specifically Section 227 (12). This clause states “Where an APN is withdrawn, it is to be treated as never having had effect (and any accelerated payment made in accordance with, or penalties paid by virtue of, the notice are to be repaid).” However, to date the Revenue have declined to comment on the practical steps, nor shed any light on the timing of this .A spokesperson for HMRC said: “We don’t comment on individual cases. APNs are only issued in tightly defined circumstances, set out in legislation. We act quickly to correct the position, once we become aware that things are not correct. If an APN is withdrawn that doesn’t mean there is no tax to pay. The underlying tax dispute remains until it is settled or litigated. “We have issued over 32,000 APNs and collected over £1bn of tax since Accelerated Payments (AP) were introduced in 2014. We remain tough on avoidance and the AP regime is a key part of our work on tackling avoidance.” That said, this clearly represents an embarrassing U-turn by HMRC, and demonstrates the need for a careful review of all APN’s received to ensure that the somewhat draconian rules are being correctly applied.