BN66 - JR Judgement Day

[DonkeyRhubarb]

Hello,

First post:

I received my closure letter today.
They worked out the tax I owed but there was no mention of interest.

(1) Does anyone know, will they send me the interest once I have paid (I'm obviously not going to pay right now)?
Also, they mention 5% surcharge if not paid within 28 days and another 5% if not paid after 6 months.
(2)So if we appeal and finally loose, will we be liable for the extra 10% on top of everything else?

Hi, and welcome.

(1) Montpelier can give you an estimate of the interest to date. Or, you can use my rough figures here:

http://forums.contractoruk.com/1066442-post800.html

(2) No. If you appeal now, there will be no surcharges.

You should get all of the paperwork across to Montpelier ASAP so they can appeal for you.

[smalldog]

oh dear

whoops....I didnt realise the CN's didnt include the accumulated interest, in which case if we lose its bankruptcy for me....I could just about pay if I had too without the interest calcs, but the interest makes it unachievable...thats basically another 50% on top!!! jesus.....

[johnnyguitar]

leading accountancy group has voiced concern about the apparent increasing use of retrospective action in the UK tax system.

The Chartered Institute of Taxation spoke out after the Treasury’s decision last week that tax rules on manufactured dividends would be amended with retrospection.

Speaking on Tuesday, Stephen Timms, financial secretary to the Treasury, announced that the new legislation would be introduced to apply from October 1st, 2007.

John Whiting, tax policy director at the CIOT, said: “We think it [retrospective legislation] damages the key principle of certainty in the tax system that is so important to its reputation and is inherently unfair.”

Evidencing fears that tax laws with retrospective effect are becoming more common, the institute pointed to the introduction of Section 58 of the Finance Act 2008, in March of that year.

According to the CIOT, the provision’s aim was to close an apparent loophole in the law but, most controversially, it has retrospective effect that goes back 20 years.

“We can understand that at times the government wants to take action to ‘confirm the general understanding of the tax system’ in the light of questions raised,” the institute said.

“However, this needs to be used with great caution: it must not dislodge the principle that the taxpayer is taxed on the wording of the legislation in place at the time of their actions. We are taxed on what legislation says, not what HMRC thinks it says”.

Reflecting on the issue, Mr Whiting added: “We need a clear statement as to when retrospection will be used and its boundaries – and parliament needs to consider such boundaries with care.”

Feb 16, 2010


HMRC can go bounce naked on a very large cactus.....

But come to think of it, they may enjoy that!

Does anyone know what they mean by 'manufactured dividends' ?
does this mean that they will now claim that my LTD Co dividends are not 'real' and force me to only operate under PAYE ??

[DonkeyRhubarb]

Don't panic (just yet)

whoops....I didnt realise the CN's didnt include the accumulated interest, in which case if we lose its bankruptcy for me....I could just about pay if I had too without the interest calcs, but the interest makes it unachievable...thats basically another 50% on top!!! jesus.....

Check the statement of account with your CNs. Mine did include interest.

If you are registered with the Government Gateway, then the figures shown on-line do not include interest.

If you were in the scheme a long time then there will be a huge difference between the total with and without interest.

In my case, tax/nic was in the order of £100k; with interest £150k.

Quick and Dirty Estimate
This works in my case but may not for others.

To get an estimate of tax/nic, add up the total trust income for the years in the scheme. Then multiply by 0.4 (40%).

It should be obvious whether the figure you are looking at includes interest or not. If it is over 50% of the total trust income, then it must include interest, since the maximum tax rate is 40%.

[DonkeyRhubarb]

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[OnYourBikeGB]

leading accountancy group has voiced concern about the apparent increasing use of retrospective action in the UK tax system.

The Chartered Institute of Taxation spoke out after the Treasury’s decision last week that tax rules on manufactured dividends would be amended with retrospection.

Speaking on Tuesday, Stephen Timms, financial secretary to the Treasury, announced that the new legislation would be introduced to apply from October 1st, 2007.

...

Is this S660? If it is then, I thought this legislation was meant to be deferred during the economic downturn. I suppose now we know what 'deferred' means. Interesting way to increase out ranks 1000 fold if it is. Brings to mind the Niemollers poem:

First they came for the communists, and I did not speak out—because I was not a communist;
Then they came for the trade unionists, and I did not speak out—because I was not a trade unionist;
Then they came for the Jews, and I did not speak out—because I was not a Jew;
Then they came for me—and there was no one left to speak out for me.


We must fight and see this through. We are most definitely on the road to tyranny. And anyone who thinks otherwise should think on how people who have never done anything illegal, who have been open and honest, will be destroyed by this Government, their HMRC masters and now, apparently, the judiciary.

[smalldog]

turn the lights off

could the last person out please turn the light off:

http://www.pru.co.uk/guides_tools/ar...rospective-ta/

Meanwhile, a recent article for the Telegraph suggested that pensioners move abroad to avoid some of the taxes hitting them in Britain.

Hansard debate:

Taxation
Mr. Frank Field: To ask the Chancellor of the Exchequer what tax schemes have been closed as a result of the retrospective application of legislation since 1997. [298739]

Mr. Timms: Legislation enacted with retrospective effect (to a date before the announcement date) is rarely used. A separate record has only been kept since 2004.

Since December 2004 the following schemes have been closed by legislation enacted with retrospective effect:

Section 92 Finance Act 2006 (avoidance using options etc);

Section 58 Finance Act 2008 (UK residents and foreign partnerships);

Section 67 Finance Act 2009 (deductions for employee liabilities);

Section 68 Finance Act 2009 (employment loss relief); and

Section 61 and schedule 30 FA 2009 (Financial arrangements avoidance).

you sure rarely applies here Mr Timms, I can only assume this is another rare incident in that case??

http://www.ft.com/cms/s/0/529854b4-1...44feab49a.html

Dominic Stuttaford of Norton Rose, the law firm, said: “It is another example of HMRC [Revenue & Customs] passing legislation with retrospective effect to correct gaps in the old legislation.”

The move seemed “odd” to lawyers who believed that people ought to be taxed on the basis of what the law says, rather than what the Revenue thought it ought to say. But such moves served as warnings to those who tried to exploit loopholes, Mr Stuttaford added.

Bill Dodwell of Deloitte said the amendment was intrinsically sensible and unlikely to disrupt the market but should not have been retrospective.

“The rule of law surely means we should have the law for a particular period. It is not easy to understand why they thought it right to backdate it,” he said.

[OnYourBikeGB]

could the last person out please turn the light off:

http://www.pru.co.uk/guides_tools/ar...rospective-ta/

Meanwhile, a recent article for the Telegraph suggested that pensioners move abroad to avoid some of the taxes hitting them in Britain.

Ah, maybe not S660 after all, but nonetheless, a prime example of how you can work all your life, pay your 'fair share', and they'll strip you of everything they can, and change the rules if they need to. Now they're destroying pensioners with retro taxes. What sort of country is this?

[PlaneSailing]

Does anyone know what they mean by 'manufactured dividends' ?
does this mean that they will now claim that my LTD Co dividends are not 'real' and force me to only operate under PAYE ??

It's OK, nothing to do with LTD companies. The dividends
they are talking about here are dividends on stock market
shares or bonds. It looks like a clever little trick to avoid tax
around dividend payment dates.

It seemed OK as long as banks were doing it, but then some pesky
'individuals' got involved and Timms got shirty.

Looks like the Pru think some pensioners are going to get hit.
Another great impact assesment by the HMRC.

[screwthis]

Thanks DR for clearing that up..

I spoke to Montpelier today and they said that some tax offices are including the interest and some are not. Mine came from Bootle which looks like it is not including it.
I wonder why they do that?? They are asking for the tax within 28 days so why are they not asking for the interest. Is it possible that they are not charging it (dream on) or are they just trying to secure the tax first then come after the interest?

Changing the subject, do you think there is any way to offset the tax with expenses? This will be hard to justify and small compared to the bill but anything is worth trying.