BN66 - Time to fight back (Chapter 3)

[DonkeyRhubarb]

I am sure it is on here - I have looked at the link on the front page - but can someone explain (in 4 year old language!) how the CTD scheme works? thanks

Let's suppose your tax liability is £100k and you have already racked up £30k in interest. If you do nothing then the interest will keep growing, currently at 4.5% of the £100k per annum (ie. £4500 pa). Note that the interest is "simple" in that it is calculated on the £100k not compounded on the £30k.

Anyway, your total liability today is £130k.

If you take out a CTD today for £100k, then no further interest will be charged from this day onwards. So your total liability will be frozen at £130k.

The process for taking out a CTD is very simple, and is described in the HMRC link. Basically either

1) Send them a cheque with a covering letter
OR
2) Transfer the money to their bank account, and then send them a covering letter

You can only make a deposit of upto £100k using method (1).

A few weeks later they will send you a tatty looking certificate.

Does that cover it?

PS. missed a few points

a) just like a savings account, you can withdraw all or part of the money at any time eg. if you needed the cash in an emergency

b) if we lose the appeal, then you just instruct them to use it to settle your liability

c) if we win, then you just cash in the CTD. It pays out a tiny bit of interest but in reality it's hardly worth having.

d) in theory, the investigations arm of HMRC has no access to CTD records, so having a CTD should not affect your bargaining position

[xantamisch]

thanks - that really is clear!

So there is no charge for this?

My only liability (but it is bad enough) is for 2007 - 08 tax year. Presumably I can use a CTD for this and use it to prevent interest charges or surcharges?

cheers

[nuffsaid]

Does appealing to the closure notices stop the interest too?

I'm guessing not, which is a shame.

[DonkeyRhubarb]

Does appealing to the closure notices stop the interest too?

I'm guessing not, which is a shame.

You guessed correctly.

[mossman]

a) just like a savings account, you can withdraw all or part of the money at any time eg. if you needed the cash in an emergency


Sorry for being an untrusting sort of bloke, but has anyone tested the take out part, i.e. cashed in all or part of a CTD? How long does it take before requesting it and getting your dosh out?

[DonkeyRhubarb]

Prima facie case of discrimination?

Just picking up on my previous post.

http://forums.contractoruk.com/735954-post876.html

If you recall, HMRC responded to the Judicial Review proceedings stating that Section 58 is not incompatible with the UK Human Rights Act for the following reason:

There is no unfairness to taxpayers who used the scheme because they sought to reduce their tax liabilities below what other people not using the scheme paid.

Now this is a pretty dubious position anyway. But let's say for the sake of argument that this was upheld on the grounds that it was "in the public interest".

If one of the "Big 4" has uncovered evidence that concessions were made to some users and their enquiries were closed, then HMRC would find themselves also having to defend an even more proposterous position:

There is no unfairness to this group of taxpayers who used the scheme even though we treated other people using the scheme more favourably.

I can't see any court in the land upholding that.

[Toocan]

There is no unfairness to taxpayers who used the scheme because they sought to reduce their tax liabilities below what other people not using the scheme paid.

Now this is a pretty dubious position anyway. But let's say for the sake of argument that this was upheld on the grounds that it was "in the public interest".

.
.

I can't see any court in the land upholding that.

The HMRC quote is quite simply ridiculous. If one were to follow it to it’s conclusion:

• Anyone using a Pension is acting unfairly
• Anyone using an ISA is acting unfairly
• Anyone earning less than the upper tax band is acting unfairly
• Anyone receiving any kind of benefit or tax credit is acting unfairly

HMRC are wasting money by pursuing this – they can only lose more:

• They will lose the money they spent pursuing this.
• They will likely have to pay between 75% and 100% of both our (Montpelier’s) costs and whoever else gets involved.
• In addition, because they have brought it to public attention they may have to refund tax paid by others who have offshore arrangements that paid tax but to whom there was no enquiry. [This is because there is the suggestion that the Padmore fix failed entirely]

Once it’s settled, if there is a way to claim against them for this unfair treatment, then many of us will do that too.

This will not increase the amount of cash HMRC collect – it will reduce it. It will increase their costs. Do the MP’s realise they have supported a dead parrot?

It’s truly a mad way for HMRC to proceed. This is truly institutional incompetence. The more we find out, the more insane it appears.

It doesn’t matter that HMRC go after “anyone and everyone”, or that they are “bullies” – they will fail. The Courts will put them back in their place and ultimately people like me are going to be demanding answers.

That will mean that eventually individual HMRC officers are going to have very public questions to answer. You may not like your name mentioned on here Mr B, how do you feel about giving evidence to a Parliamentary committee?

[DonkeyRhubarb]

That will mean that eventually individual HMRC officers are going to have very public questions to answer. You may not like your name mentioned on here Mr B, how do you feel about giving evidence to a Parliamentary committee?

There could be serious repercussions for some in HMRC/Treasury, especially if it turns out that they misled parliament to cover up their own incompetence. This is very different to the Arctic Systems case which, whilst also a complete waste of public money, only involved litigation. Getting legislation enacted under false pretences must be a pretty serious business.

I don't know how senior Mr B is but I suspect someone higher up is ultimately responsible for this mess.

I bet they were really smug when the legislation got passed but they may not be quite so cocky now, particularly when the big guns join the fray.

[BrilloPad]

Let's suppose your tax liability is £100k and you have already racked up £30k in interest. If you do nothing then the interest will keep growing, currently at 4.5% of the £100k per annum (ie. £4500 pa). Note that the interest is "simple" in that it is calculated on the £100k not compounded on the £30k.

Anyway, your total liability today is £130k.

If you take out a CTD today for £100k, then no further interest will be charged from this day onwards. So your total liability will be frozen at £130k.

The process for taking out a CTD is very simple, and is described in the HMRC link. Basically either

1) Send them a cheque with a covering letter
OR
2) Transfer the money to their bank account, and then send them a covering letter

You can only make a deposit of upto £100k using method (1).

A few weeks later they will send you a tatty looking certificate.

Does that cover it?

PS. missed a few points

a) just like a savings account, you can withdraw all or part of the money at any time eg. if you needed the cash in an emergency

b) if we lose the appeal, then you just instruct them to use it to settle your liability

c) if we win, then you just cash in the CTD. It pays out a tiny bit of interest but in reality it's hardly worth having.

d) in theory, the investigations arm of HMRC has no access to CTD records, so having a CTD should not affect your bargaining position

top CTD post

Could you add to page 1 under the CTD section?

[DonkeyRhubarb]

Could you add to page 1 under the CTD section?

One step ahead of you, already added it.