Originally posted by DonkeyRhubarb
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Yes - why give a time limit? My understanding is that montpelier have been pushing HMRC - HMRC have been stalling. Personally I intend to give montpelier time to fight the case. -
Yes - why give a time limit? My understanding is that montpelier have been pushing HMRC - HMRC have been stalling. Personally I intend to give montpelier time to fight the case.
But there isn't that much time left. The Finance Bill will get royal ascent mid-July. By then, either Clause 55 will have been removed or it will become law. If it is the latter then surely it is reasonable to assume that our chances of success are greatly diminished?
Personally, I simply can't afford to keep racking up interest penalties @ 8.5%. If Clause 55 becomes law but I still thought there was an outside chance of winning, then I will buy a Certificate of Tax Deposit to protect my savings from further erosion.
OK, I guess I could have said the date when the bill gets royal ascent but, given that people are already very twitchy, if Montpelier haven't done anything by the end of June I'm not sure it would be fair of me to ask other people to hang on any longer.
Of course, at the end of the day it is down to the individual. You may be prepared to give Montpelier the benefit of the doubt and stick it out for as long as it takes but others may not be willing (or able) to afford that risk.Comment
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I understand your position. I only joined scheme in April 2006 and tax return for 1st year only went in January this year. I have not had anything from HMRC yet - but then few I know in the scheme have. I use all my spsare cash to pay off my enormous mortgage - so I save on interest.Originally posted by DonkeyRhubarb View Post
Not sure what I would do in your shoes.Comment
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I understand your position. I only joined scheme in April 2006 and tax return for 1st year only went in January this year.
In which case, you have got nothing to lose by seeing how it pans out.
I have not had anything from HMRC yet - but then few I know in the scheme have.
Whereas everyone I know has had many letters. Most of my contacts have been under the screws for almost 5 years.
Not sure what I would do in your shoes.
Exactly, rock and a hard place!Comment
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I know one chap - one of the first 5 in - who has heard nothing in 6 years. Another chap in for 5 years - gets a warning letter every year but no suggestion of how much he owes.Originally posted by DonkeyRhubarb View PostComment
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The period they are sniffing around for me is the 05-06 tax year. I was only only with MTM for 9 months of that year, so not really a big pile of cash was earned in comparision to you chaps.
I can see that HMRC are trying the scare mongering approach but at the same time they are not the sort of people you can choose to ignore. My recent feeling is to help resolve the outstanding issue and be done with it, as its too risky to spend the money anyway, therefore no point in having it.
If the revenue lose, then whats stopping them re challenging in court thus it running full circle again and making it too risky to spend the cash over the next few years ?
As for waiting 1 more month for MTM, I can see your point, but in my experience they are too useless on the communication side to be taken seriously - the reason why i left them in the first place in under a year.
I spoke to a director there late last year after my 1st HMRC letter and his advice was either hold on it and take a risk, or pay up - my choice.
Smell it ? I was sitting in it !Comment
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Rate Trap
HMRC are current charging 8.5% p.a. interest for late payment of tax. To achieve this as a basic rate tax payer you would need to earn 10.6% on your savings; for a higher rate tax payer you would need 14.1%. Bottom line is no low-risk investment can achieve anywhere this.
The best way to protect yourself is to buy a Certificate of Tax Deposit (CTD). This guarantees from the moment you buy it that you can't be charged any more interest. You can get your money out any time, although it pays a miserly rate of interest. For more details see here:
http://www.icaew.com/index.cfm?route=108094
Details of how to make a CTD deposit can be found here:
http://www.hmrc.gov.uk/howtopay/cert_tax_deposit.htm#b
Beware of putting savings in your name. If the scheme fails then Hector will hit you for 40% on the interest from your savings. If spouse is not working then put it in their account.
An offset mortgage is one way to use the cash to save you interest and you don't get taxed on this. Even so, this is still unlikely to match HMRC's 8.5%.
The following table shows the difference on £100k between HMRC's rate and a high street savings rate of 6% for a basic rate and high rate tax payer.
Year.......8.5%......6%(basic).....6%(higher)
1...........108.5........104.8.............103.6
2...........117.7........109.8.............107
3...........127.7........115................111
4...........139...........120...............115
5...........150..........126................119
In other words, as a higher rate tax payer, after 5 years you would need to find an extra 31k to cover HMRC's bill! Be careful you don't get caught out.Last edited by DonkeyRhubarb; 26 May 2008, 12:12. Reason: Include details of how to make CTD depositComment
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perosnally im gonna give them some time. I would be very curious to see how HMRC can be justified in charging full penalties even with retrospection in court. Surely there is a case against HMRC to say they should have played fair and shut it down when they questioned its validity rather than letting time drag on and us all rack up lots and lots of interest and a potentially bankrupting charges.
Dont see that as far or above board and cant see how they can justify stalling all this time....Even if 66 does become law, think there is a very good case for striking a dealComment
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VEry Very interesting post - in fact I wow say worthy of its own thread.Originally posted by smalldog View PostComment
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