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Calculating Potential APN

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    Calculating Potential APN

    I am trying to determine a potential APN amount. The association managing the issue has said hold off until the APN actually arrives.

    Is this simply a matter of determining what your tax position should have been for a tax period; then working out the correct amount and applying penalties?

    I've had a search around but nothing is quite clear. Does HMRC have some clear guidance or is every APN different depending on the "scheme"?

    #2
    They will give you an outrageous 'estimate'. To get this reduced you will have to provide bank statements detailing any loans.

    Comment


      #3
      Originally posted by dmuk View Post
      I am trying to determine a potential APN amount. The association managing the issue has said hold off until the APN actually arrives.

      Is this simply a matter of determining what your tax position should have been for a tax period; then working out the correct amount and applying penalties?

      I've had a search around but nothing is quite clear. Does HMRC have some clear guidance or is every APN different depending on the "scheme"?
      APNs do not include penalties (or interest, for that matter), only "tax in dispute".
      There is no clear guidance, and on the APNs already received by some of our guys, HMRC couldn't be bothered to include calculations.
      But it will depend on the strucutre of your scheme, of course.
      Help preserve the right to be a contractor in the UK

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        #4
        This probably won't be that much help to many but APNs only apply to tax year 2004/5 onwards.

        Tax years 2003/4 and earlier are excluded.

        Comment


          #5
          Originally posted by DonkeyRhubarb View Post
          This probably won't be that much help to many but APNs only apply to tax year 2004/5 onwards.

          Tax years 2003/4 and earlier are excluded.
          Are you sure?

          I am anticipating receiving one for '09/10 and '10/11.

          I am also calculating on the assumption the full amount that was not taxed in these periods is taxable at normal rates plus interest etc

          Comment


            #6
            Originally posted by DotasScandal View Post
            APNs do not include penalties (or interest, for that matter), only "tax in dispute".
            There is no clear guidance, and on the APNs already received by some of our guys, HMRC couldn't be bothered to include calculations.
            But it will depend on the strucutre of your scheme, of course.
            Interesting. Is this simply the tax HMRC believe you owe for the tax period? Do they add anything on top?

            Comment


              #7
              Originally posted by dmuk View Post
              Interesting. Is this simply the tax HMRC believe you owe for the tax period? Do they add anything on top?
              Yes, it is the tax they "believe you owe", without any sides (interest, penalties...).
              How they came to their "belief", though...your guess is as good as mine.
              Help preserve the right to be a contractor in the UK

              Comment


                #8
                I don't think "clear guidance" and "HMRC" belong in the same sentence.

                Comment


                  #9
                  Originally posted by DotasScandal View Post
                  Yes, it is the tax they "believe you owe", without any sides (interest, penalties...).
                  How they came to their "belief", though...your guess is as good as mine.
                  Fingers crossed it will be less than I am anticipating. Odd they don't add any interest and penalties. I guess I need to wait for the APN to arrive.

                  Comment


                    #10
                    Originally posted by dmuk View Post
                    Fingers crossed it will be less than I am anticipating. Odd they don't add any interest and penalties. I guess I need to wait for the APN to arrive.
                    As has been observed above, the APN is for the tax in dispute.

                    HMRC cannot charge interest and penalties without there being some form of appeal process as that would not be legal. The APN regime is a way of getting the cash without the danger that the prols might revolt.

                    Only when the final tax position has been settled (5 years from now if you're lucky) can interest etc be calculated. Penalty depends on behaviour, not tax liability.

                    The APN is likely to be based on the amount of the loan you received x your marginal rate of tax. There is ample evidence that HMRC does not have enough data to make an accurate assessment and that might allow you to delay the amount payable.
                    Best Forum Adviser & Forum Personality of the Year 2018.

                    (No, me neither).

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