BN66 - JR Judgement Day

[DonkeyRhubarb]

Slightly unrelated question…

Can you take out a CTD now, to stop potential interest on a potential liability? Ie if your return is under query, but you haven’t received a Closure notice yet.
Almost like insurance against interest being added?

Yes.

[Morlock]

Slightly unrelated question…

Can you take out a CTD now, to stop potential interest on a potential liability? Ie if your return is under query, but you haven’t received a Closure notice yet.
Almost like insurance against interest being added?

As DR has said, "Yes". But the interest accrues from the date the original tax would have been due, not from the date the closure notice is issued. More retrospection in action!!

[sal626]

As DR has said, "Yes". But the interest accrues from the date the original tax would have been due, not from the date the closure notice is issued. More retrospection in action!!

Yeah, and no time limit means an enquiry could be open for 10 years before they issue a CN!!

[DonkeyRhubarb]

Yeah, and no time limit means an enquiry could be open for 10 years before they issue a CN!!

I heard of a case recently where someone was placed under enquiry in the early 1990s, and they have only just received closure notices.

I bet there are even people who have died of old age before they received a CN.

According to a recent FOI response, HMRC currently have 28,000 people under enquiry.

I wonder how many of them have already passed away?

[sal626]

shocking....what were they doing for 20 years?
I hope thier CNs weren't asking for money....the interest would have been more then the capital!

Can you not appeal the amount of interest, on the basis of inaction for x number of years?

[ASB]

shocking....what were they doing for 20 years?
I hope thier CNs weren't asking for money....the interest would have been more then the capital!

Can you not appeal the amount of interest, on the basis of inaction for x number of years?

Well, in theory no. Apparently interest is applied by statute and there is no discretion. At least this is how it panned out with me. I negotiated penalties down after a protracted enquiry but no dice with the interest.

At this time it didn't actually bother me because this was the time when the credit rate and debit rate were the same and much closer to base rate. I personally took the view then that the interests I was paying was effectively the same as I had received so didn't worry. I don't think this is quite the same in your cases though.

I am sure however that deals are done.

[silver_lining]

Not sure if anyone has seen this yet. It was posted this morning.

http://news.bbc.co.uk/1/low/business/8496921.stm

its not the worst article I have read on the subject, but of course maybe I am struggling to remain objective given I know the intricate detail; I would argue its not completely balanced.

The old chestnut of Padmore, and the intended signal.. is all in there but of course failure to mention, no one impacted by retrospection in that case, leglislation enacted immediately once it became known etc.etc ...

and can anyone really ignore specific sections of the judgement.. this one for example still haunts me

'In any event, even if Mr Elvin QC had persuaded me that the arrangements worked under the DTA and the legislation then applicable, and that HMRC would inevitably have lost in any putative proceedings in respect of the arrangements, the outcome in this claim would be no different.'

Let me try and paraphrase:

If HMRC had simply explained the details of the arrangement, the outcome in this claim would be no different.

Tempted to drop her a note...

[Toocan]

Tempted to drop her a note...

Well if you are, then you might find one of my previous posts to be useful:

http://forums.contractoruk.com/960309-post646.html

[DonkeyRhubarb]

'In any event, even if Mr Elvin QC had persuaded me that the arrangements worked under the DTA and the legislation then applicable, and that HMRC would inevitably have lost in any putative proceedings in respect of the arrangements, the outcome in this claim would be no different.'

Let me try and paraphrase:

If HMRC had simply explained the details of the arrangement, the outcome in this claim would be no different.

Knowing what we know now...

Could this lower Court have ever ruled primary legislation incompatible with A1P1?

I wouldn't be surprised if the Court of Appeal also passes the buck.

[TaxDude]

Below is my calculation of the accrued interest for each tax year:

2001/2 - 48%
2002/3 - 42%
2003/4 - 35%
2004/5 - 28%
2005/6 - 21%
2006/7 - 14%
2007/8 - 6%

For example, if your tax/nic liability for 2001/2 was £10000, then the interest would be approximately £4800.

DR - many thanks. Can you confirm what the actual interest rate per year was (so that I can check HMRC calculations). Sounds like 2001/2 rate was around 6% - many thanks