Aml pbt 2011/12 hmrc

[patrickegan75]

MARD

Thanks for that info - really useful. Best wishes, Pat

[mst1958]

HMRC Assessment

I too received the AML email regarding 2011/12 (which incidentally HMRC are out of time on but used a 'discrepancy' in 2012/13 to 'open the door' to 2011/12) and subsequently the HMRC assessment (not APN) on 16/10/15 (dated 8/12/15) giving until 7th Nov to pay what HMRC claim to be outstanding tax or incur penaties of 5% after 30 days and then 5% every 6 months thereafter.
AML say they are appealing ... but appealing what? ... and does this stop interest until appeal decision? ... or if appeal fails then 'postponed' interest will be payable? If appeal is successful then will HMRC be paying us 5% compounded if we make payment on account (yeah right)?

Also HMRC figures are based on gross salary received (declared) and net loan figures (provided by AML after HMRC enquiry) and then factored up to 100% i.e. they assume that as you received 82% (presumably taken from AML literature) then the liability is on 100%. Surely this cannot be right and fair ... we are being expected to pay tax on money not received i.e. AML's fees/commission.

Anyone know what the appeal is based on - PBT scheme or simply the assessment?
How long is this likely to take?
What are the odds on successful appeal?
Could this drag on for years and rack up huge compounded interest. All well and good AML appealing but they won't be left with the interest to pay if appeal fails.
Finally, if the appeal is for the scheme will this halt assessments for further years until resolved or will each assessment need to be appealed separately?

I guess only AML can answer ... but I have several outstanding queries with them. No doubt they are snowed under with queries at present - perhaps somes has had a response from them?

[webberg]

The letter AML are responding to is one that HMRC is issuing to many at the moment.

This is driven by a timeline that for 11/12 enquiries expires at the end of this tax year, 5/4/16.

Before then HMRC must issue a discovery assessment to all those who have not had a valid enquiry notice for 11/12. HMRC is trying to essentially create grounds for discovery and to be able to point to "hidden" information that had they been aware of, would have led to an enquiry notice and/or assessment earlier.

They need perhaps 3 months to get the admin system cranked up and therefore many of these requests come with a deadline for response for late this year.

This argument conveniently overlooks the fact that in many cases HMRC has made a positive statement to individuals that a return was not required for the year and that the enquiry into all contractor schemes had been running up to 7 years plus by the usual deadline for a section 9A enquiry. An inconvenient truth that will no doubt be glossed over in Tribunal in due course.

Having AML still around and dealing with the enquiries is an undoubted advantage.

I'm not entirely sure whether AML has a professional/client relationship or a less formal provider/HMRC relationship, but either way it seems to be working.

[EBTContractor]

The letter AML are responding to is one that HMRC is issuing to many at the moment.

This is driven by a timeline that for 11/12 enquiries expires at the end of this tax year, 5/4/16.

Before then HMRC must issue a discovery assessment to all those who have not had a valid enquiry notice for 11/12. HMRC is trying to essentially create grounds for discovery and to be able to point to "hidden" information that had they been aware of, would have led to an enquiry notice and/or assessment earlier.

They need perhaps 3 months to get the admin system cranked up and therefore many of these requests come with a deadline for response for late this year.

This argument conveniently overlooks the fact that in many cases HMRC has made a positive statement to individuals that a return was not required for the year and that the enquiry into all contractor schemes had been running up to 7 years plus by the usual deadline for a section 9A enquiry. An inconvenient truth that will no doubt be glossed over in Tribunal in due course.

Having AML still around and dealing with the enquiries is an undoubted advantage.

I'm not entirely sure whether AML has a professional/client relationship or a less formal provider/HMRC relationship, but either way it seems to be working.

Hi webberg

What are they arguing they have discovered, is the issue here that?

1. People didn't submit a SA for 2011/12 and HMRC is now asking for one

or

2. People submitted a SA with no loan details, only a low salary coming from self employment (and AML submitted the loan details of people to HMRC for whatever reason, and HMRC is now putting two and two together)

or

3. People submitted a SA with loan details and HMRC is only now getting round to assessing the tax they believe is due

or

4. People submitted a SA with salary from self employment and no other details, and HMRC now wants more information whether people received loans as well as income

[mst1958]

Discovery provisions of section 29 Tax Management Act 1970

In my case they have presented a notice of assessment under discovery provisions of section 29 Tax Management Act 1970. They received SA 2011/12 with salary only and made enquires regarding loan payments to AML. AML provided these and now HMRC has added gross salary to net loans and then factored up to 100%

e.g. £10 salary + £50k loans = £60k / 82% (figure presumably taken from AML marketing) = £73,170 and then applied tax and NI rates at the appropriate rates and then subtracted tax & NI declared on SA (and applied late payment penalty interest of approx £1k).

They have stated that this amount is payable within 30 days or 5% interest will be charged and additional increments of 5% charged after 6 months and 12 months on unpaid amounts. It is not clear what happens after this but I presume interest will be payable in 5% 6 monthly installments? .. which is a concern if a/ appeal takes a long time b/ appeal is unsuccesful

AML are appealing. By this is assume that they will need to take it to tribunal (FTT)? My primary concern is how long this will take as if appeal is unsuccessful interest will have accrued and be payable from Jan 2013.
... but the I guess that's what HMRC are banking on! If this is a long drawn out case (I've heard 6-7 years) the interest alone could double the tax owed (i.e. rule of 7 - 10% per annum componded over 7 years = 100%)


Also any advice on the tax/NI being applied to the 18% not received i.e. AMLs fees/commission and other deductions? I may be wrong, but surely we can't be taxed on funds we have not received? The letter states that if the figures are wrong to let them know. As AML are dealing with this I don't want to contact HMRC directly and confuse the situation.

[LandRover]

In my case they have presented a notice of assessment under discovery provisions of section 29 Tax Management Act 1970. They received SA 2011/12 with salary only and made enquires regarding loan payments to AML. AML provided these and now HMRC has added gross salary to net loans and then factored up to 100%

e.g. £10 salary + £50k loans = £60k / 82% (figure presumably taken from AML marketing) = £73,170 and then applied tax and NI rates at the appropriate rates and then subtracted tax & NI declared on SA (and applied late payment penalty interest of approx £1k).

They have stated that this amount is payable within 30 days or 5% interest will be charged and additional increments of 5% charged after 6 months and 12 months on unpaid amounts. It is not clear what happens after this but I presume interest will be payable in 5% 6 monthly installments? .. which is a concern if a/ appeal takes a long time b/ appeal is unsuccesful

AML are appealing. By this is assume that they will need to take it to tribunal (FTT)? My primary concern is how long this will take as if appeal is unsuccessful interest will have accrued and be payable from Jan 2013.
... but the I guess that's what HMRC are banking on! If this is a long drawn out case (I've heard 6-7 years) the interest alone could double the tax owed (i.e. rule of 7 - 10% per annum componded over 7 years = 100%)


Also any advice on the tax/NI being applied to the 18% not received i.e. AMLs fees/commission and other deductions? I may be wrong, but surely we can't be taxed on funds we have not received? The letter states that if the figures are wrong to let them know. As AML are dealing with this I don't want to contact HMRC directly and confuse the situation.

It's a nightmare, many of us wish we could wake up from. Please insist on all correspondence is copied to you that AML send to HMRC. You signed an authority for AML to act on you behalf but ensure you see what the correspondence is at all times.

Some may question whether AML has to supply any individual details if the scheme was not DoTAS, so did they take legal advice to do so? Surely they must understand the tremendous stress that these demands are causing, so did they have to help HMRC?

HMRC are being utter scumbags in their ridiculous attitude to all this, the vindictiveness is appalling.

[patrickegan75]

p11d

Did AML submit a P11D for anyone on here for 2011/12? I had thought that AML would submit this with the Tax return for 2011/12 but this was not the case.

[LandRover]

Did AML submit a P11D for anyone on here for 2011/12? I had thought that AML would submit this with the Tax return for 2011/12 but this was not the case.

I understand that anyone on AML PBT was self-employed....so if you are self-employed you don't fill out a P11D for yourself. You just include the amount of allowable business expenses you personally have incurred in the total allowable business expenses figure on your tax return. (In other words, you don't need to spell out your own individual expenses, you just lump them together with the rest of the company's).

Speak to AML or email them.

[mst1958]

P11D

I do not believe that AML would have submitted P11D as the loan is NOT interest free (well mine isn't) so there is no BIK to declare. 2011/12 is PBT not EBT scheme.

Good points made LandRover. AML did not consult with me whether they could/should submit figures (and gave the impression that this was just a routine enquiry) and I have not had any copies of letters AML are sending HMRC. I will now request these and thanks for raising this.

[webberg]

Hi webberg

What are they arguing they have discovered, is the issue here that?

1. People didn't submit a SA for 2011/12 and HMRC is now asking for one

or

2. People submitted a SA with no loan details, only a low salary coming from self employment (and AML submitted the loan details of people to HMRC for whatever reason, and HMRC is now putting two and two together)

or

3. People submitted a SA with loan details and HMRC is only now getting round to assessing the tax they believe is due

or

4. People submitted a SA with salary from self employment and no other details, and HMRC now wants more information whether people received loans as well as income

Discovery - how long do you have?

HMRC has not really set out their detailed reasoning but my interpretation is that because they consider (without any judicial sanction) that the loans are really income and they have discovered that they have not been returned and as such HMRC has had no chance to tax them.

be interesting to see that in more detail eventually.

The counter might be that these loan schemes have been under enquiry for several years, the employer is always on the return and all that has happened is HMRC has made an internal decision that the loans are taxable and has "discovered" that their system failed.

Whatever grounds an appeal is made upon against discovery, I predict a long and bitter fight on section 29 even before the question of liability arises.