BN66 - Time to fight back!!!

[DonkeyRhubarb]

DR, they all make their way into the bank of england accounts to be used (unwisely!) as the government see fit, doesnt matter if it comes from PAYE, NI, CTD, CT...you are still parting with your hard earned so in some ways they have won already when you buy a CTD....They hedge that you wont ever get it back and that they can pay you a miniscule % interest while they run round punting out YOUR cash to the highest bidder, Northern Rock anyone?

Don't disagree with any of that, and I can't say I got any satisfaction whatsoever writing out the cheque to HMRC for the CTD. Even the certificate they send you is a bit tatty.

For me it was a purely pragmatic decision in that I didn't want the potential liability getting any bigger.

[DonkeyRhubarb]

[QUOTE=akan;616159]

I just got my calculation off MontP - the amount for me is much closer to 40% (don't have the actual trust income handy). Plus a lot of interest.

I have been on the scheme for four years now and its a lot of money - this CTD is going to be painful.......

A minor consolation is that you "only" have to scrape together enough to cover the tax (40%) and not the accrued interest.

[SantaClaus]

Yep totally, but it still swells their bank balance and they use it, all of it in exactly the same way banks do....They aint getting a penny out of me with which to bolster their finances...

nor me Smalldog, they can go whistle

[akan]

[QUOTE=DonkeyRhubarb;616175]

A minor consolation is that you "only" have to scrape together enough to cover the tax (40%) and not the accrued interest.

The figure I was given is not 'one to scrape together' but I have been saving manically for the past few years.

Whats interesting is that the reply from MontP is

'to stop interest accruing you may wish to make a payment on account of the tax and NIC potentially due either direct or via a Certificate of Tax Deposit."

They do recommend a CTD over the POA.

I thought the Payment on Account was a payment for settlement with no possibility of getting the money back? Or would there be a refund when we win?

[BrilloPad]

I do hope Mr Brannigan (hello ) has sent me a birthday card. I shall open the Brown Envelope from him in a minute.......

BTW I will arrange for all my demonstration birthday gifts (see the happy birthday to BrilloPad thread) to be delivered to Mr Brannigan(hello )'s office.......

[mossman]

If you take out a CTD (for £30k) then HMRC won't charge you any more interest ie. your total liability of tax+interest will be frozen from the date of the CTD. HMRC will currently be charging you 7.5% p.a. simple interest on the £30k.

Are you sure it's simple interest? Is there some document where this is stated? Does it track the base rate?

I have seen a bank offering 7.1% on savings. By my calculation, £100 @ 7.5% simple interest = £122.50 after 3 years, whereas £100 @ 7.1% compound interest = £122.85 after 3 years. The longer it drags on, the greater the advantage of the compound interest, and since HMRC seem to love dragging things out as long as possible.....

Only disadvantages I can see are 1. tax on the bank interest. 2. Bank could do a Northern Rock.

No. 1 can presumably be avoided if your wife is a non-tax-payer i.e. the savings account will be in her name.

As for no. 2, I guess you have to choose your bank carefully.

Can anyone see an error in my maths/logic?

[DonkeyRhubarb]

[QUOTE=akan;616607]

I thought the Payment on Account was a payment for settlement with no possibility of getting the money back? Or would there be a refund when we win?

Payment on account is not the same as settlement. You can make a POA and still appeal against the closure notice. If we win you would get a refund + interest.

If you settle, then that's the end of the matter. In order to settle, you would need to come up with the tax and all the interest. MontP have indicated that you would never see this again even if they won.

[DonkeyRhubarb]

Are you sure it's simple interest? Is there some document where this is stated? Does it track the base rate?

I have seen a bank offering 7.1% on savings. By my calculation, £100 @ 7.5% simple interest = £122.50 after 3 years, whereas £100 @ 7.1% compound interest = £122.85 after 3 years. The longer it drags on, the greater the advantage of the compound interest, and since HMRC seem to love dragging things out as long as possible.....

Only disadvantages I can see are 1. tax on the bank interest. 2. Bank could do a Northern Rock.

No. 1 can presumably be avoided if your wife is a non-tax-payer i.e. the savings account will be in her name.

As for no. 2, I guess you have to choose your bank carefully.

Can anyone see an error in my maths/logic?

The simple interest is correct. I received a draft assessment from HMRC a couple of years ago and it was definitely not compounded.

The 7.5% rate could change. Last year it got as high as 8.5%.

Even if your wife is a non-tax payer, she can only earn about £6k tax free. Basic rate tax of 20% would reduce 7.1% down to 5.68%. It's worth using your ISA allowance but this is only £3k each per year in a cash ISA.

For me, there was also the psychological factor to take into account. The longer it drags on the bigger the cheque you might have to write out . Taking out a CTD now at least freezes the liability.

Of course, there is nothing to stop you doing a bit of both and putting some in a CTD and keeping the rest in savings.

[poppy01]

The time for whingeing is over. We need to organise into a proper group like the PCG, but just for people who are under threat from the retrospective legislation. We need to attack on various fronts: Lobbying, Investments to beat the 7.5%, Investigation of Escape Routes (I’m told there is no extradition treaty between the UK and Northern Cyprus), Direct Action (if French fisherman can blockade ports, and lorry drivers can block motorways, there is plenty we can do).

We don’t have to put up with this sh**.

Mossman, for me the best post in ages. We all have stories like this, and many of us I suspect are neither 'very rich' nor 'criminals'. I have felt for some time a great sense of frustration that everything is being left to MP. Since the farce of the Treasury Committee vote we have just been indulging in a private moan about our lot. Is there nothing we can do actively. We know where the SCO are based in Manchester, its on all my letters. What about a protest of some sort, if all 2000 of us showed up at Brannigans door it might at least make him feel uncomfortable. Thats what the internet is best at isnt it, organising... and before the howls of derision from the trolls, f**k you, an injustice is an injustice, and this government, with this 'law' (sic) have made a nonsense of our taxation and legal system, and it wouldnt surprise me at all if it does lasting damage to our country, I'd be interested to know how many companies are packing their head offices up and heading to Dublin. As for a name I suggest Federation Against Retrospective Taxation, or perhaps not on second reading

[ASB]

They do recommend a CTD over the POA.

I thought the Payment on Account was a payment for settlement with no possibility of getting the money back? Or would there be a refund when we win?

With a CTD you can withdraw it at any point - but the interest rate it pays is small. However if you make a payment on account then you will get this back if you win - but only at the very end of the process. However in this case you do get a better rate of credit interest. I guess that might be enough to make some people choose POA over CTD.