Sanzar Partnership? New IOM company

[BrilloPad]

The scheme that I was with is Steed. Also, I have confirmed with HMRC that making payments on account will stop interest incurring on any tax that may be owed. I have also confirmed that such payments would be refunded (including interest) should a final ruling go against HMRC. Having said that, HMRC may well take this as far as the house of lords so it could take a while for this to happen.

The main motivation for making a payment on a account is to avoid a very nasty surprise in a few years time if HMRC win. By that stage the effect of interest on the unpaid tax could be crippling.

I would be really interested to know what other people are doing.

I only started with the IOM company in April 2006 - so tax return not even in until Jan 2008. Several people are in scheme - for up to 5 years. One person never challenged once in 5 years. Others challenged for just some years.

I have 3 options IF I get challenged :-
1. Make payment on account as you have
2. Wait for final decision and go bankrupt if it goes wrong
3. Go abroad - which I might do anyway.

If I get challenged I might create a poll...

[tim123]

The main motivation for making a payment on a account is to avoid a very nasty surprise in a few years time if HMRC win. By that stage the effect of interest on the unpaid tax could be crippling.

Why will it be crippling. It will only be a couple of percent above what you can earn on the money. Even if it goes on for 5 years the difference will only compound to about 15%.

If HMRC win, a person has to pay back 100% of the owed tax plus penalties of say 30% (I think that likely to be a low estimate), So if somone has to find 130% of that tax due, why is having to find 145% going to be "crippling"?

tim

[ContractIn]

If you all believe these schemes are legal and law abiding why would you be worried if you are under investigation, surely HMRC will lose?

I only started with the IOM company in April 2006 - so tax return not even in until Jan 2008. Several people are in scheme - for up to 5 years. One person never challenged once in 5 years. Others challenged for just some years.

I have 3 options IF I get challenged :-
1. Make payment on account as you have
2. Wait for final decision and go bankrupt if it goes wrong
3. Go abroad - which I might do anyway.

If I get challenged I might create a poll...

[IR35 Avoider]

Surely if you make payments on account, you are effectively just paying the tax? HMRC then just sit back and do nothing - it's up to you to take legal action to prove they should return the money. If you make payments on account it looks like you think tax is owed.

On the other hand, with certificates of tax deposit, you don't even reveal to HMRC that you have provided for the possible tax bill until you lose, at which time you unveil them and get immunity from interest. As HMRC don't know you have the certiciates, while the argument is still going on you don't have to admit that you have any doubt that your scheme is completely effective.

[THEPUMA]

Why will it be crippling. It will only be a couple of percent above what you can earn on the money. Even if it goes on for 5 years the difference will only compound to about 15%.

If HMRC win, a person has to pay back 100% of the owed tax plus penalties of say 30% (I think that likely to be a low estimate), So if somone has to find 130% of that tax due, why is having to find 145% going to be "crippling"?

tim

There should be no penalties if the schemes have been disclosed correctly.

[tim123]

There should be no penalties if the schemes have been disclosed correctly.

but they weren't (and aren't).

tim

[THEPUMA]

but they weren't (and aren't).

tim

Is that right? I'm pretty sure the Montpelier ones are. If people haven't disclosed then they deserve everything they get.

[Chugnut]

Is that right? I'm pretty sure the Montpelier ones are. If people haven't disclosed then they deserve everything they get.

There are a number of variables (as usual) but in broad terms didn't the responsibility of disclosure falls to the user of the scheme where the promoter was based offshore? I don't know anything about Montpelier though.

[THEPUMA]

There are a number of variables (as usual) but in broad terms didn't the responsibility of disclosure falls to the user of the scheme where the promoter was based offshore? I don't know anything about Montpelier though.

I think the user of the scheme would always be heavily encouraged by its promoter to fully disclose details of the scheme on their returns in order to avoid penalties and to limit the window of opportunity for HMRC to challenge to a year from the deadline for submission of the return.

[tim123]

Is that right? I'm pretty sure the Montpelier ones are. If people haven't disclosed then they deserve everything they get.

The schemes in question pre-dated the disclosure rule.

But as someone else has indicated. I don't see how the disclosure rule can be used as a defence to an offshore scheme. The dodgy deal is the moving of the money offshore in the first place, not what is done with it when it gets there.

tim