Settlement Opportunity

[Boobetty]

I agree, there is no way that HMRC can say the loans are net income, because implicit in this is that they were taxed in the first place.

I think I have read in the APN guidance or elsewhere that the amount of the APN will be the same as the amount of the assessment under dispute. I have had two discovery assessments and neither mention grossing up my loans.

[Rob79]

I agree, there is no way that HMRC can say the loans are net income, because implicit in this is that they were taxed in the first place.

I think I have read in the APN guidance or elsewhere that the amount of the APN will be the same as the amount of the assessment under dispute. I have had two discovery assessments and neither mention grossing up my loans.

If you're both happy, then I have nothing more to add.

I suppose we'll have to wait and see.

[AlCapone]

Interest charges

Hi - I have a question about interest.

I found this statement on http://www.contractorumbrella.com/ne..._appeals.html:

"Interest will continue to accrue on all amounts outstanding and is calculated from the original due date up to the date of payment. This may also include interest on payments that should have been made on account on the relevant due dates."

To me this implies that you pay interest twice; once on the overall amount and twice more for each missed payment on account. Using HMRC's own interest calculator tool confirms this.

http://www.hmrc.gov.uk/campaigns/19years-calc.pdf

Settlement figures given by HMRC seem only to include interest for the overall interest due, not for the missed payments on account.

Probably something else to think about if there are people considering settling?

[DonkeyRhubarb]

Hi - I have a question about interest.

I found this statement on http://www.contractorumbrella.com/ne..._appeals.html:

"Interest will continue to accrue on all amounts outstanding and is calculated from the original due date up to the date of payment. This may also include interest on payments that should have been made on account on the relevant due dates."

To me this implies that you pay interest twice; once on the overall amount and twice more for each missed payment on account. Using HMRC's own interest calculator tool confirms this.

http://www.hmrc.gov.uk/campaigns/19years-calc.pdf

Settlement figures given by HMRC seem only to include interest for the overall interest due, not for the missed payments on account.

Probably something else to think about if there are people considering settling?

You don't pay interest twice. The issue is about when the interest starts accruing from.

Take for example 2008/9. The normal due date would be January 2010.

However, payments on account (PoA) of 50% may (I believe) have been due in January 2009 and July 2009.

The bottom line is that the interest, if it's taken from the PoA dates, may be slightly higher.

[AlCapone]

You don't pay interest twice. The issue is about when the interest starts accruing from.

Take for example 2008/9. The normal due date would be January 2010.

However, payments on account (PoA) of 50% may (I believe) have been due in January 2009 and July 2009.

The bottom line is that the interest, if it's taken from the PoA dates, may be slightly higher.

Not sure I agree or maybe I don’t understand. Using HMRC’s tool http://www.hmrc.gov.uk/campaigns/19years-calc.pdf, enter an example: Select year 06/07 and enter £10,000 as income due. It gives you a total of £14,573 and it breaks it down with 3 interest charges:

1. £2,380.15 in interest for the balancing payment of £10.000.
2. £1190.10 in interest on the first PoA of £5,000
3. £1,003.62 in interest on second PoA of £5,000

This gives a total interest charge of £4,573.

The first amount (£2,380.15) would be the correct amount of accrued interest for £10,000 from 06 to present day. So how can being charged interest on the two missed PoA payments not be seen as paying interest twice on the same amount?

[LadyPenelope]

Has anyone actually received a settlement figure yet?

I phoned HMRC just over a month ago to request a settlement quote. I was informed they already had details of the loan amounts and I would would receive a settlement figure within 3 weeks.

I still haven't got anything back yet.

Anyone interested in getting a settlement figure, I would recommend requesting it ASAP if you want to get anything back before Jan 2015

Yes, I have been quoted a figure of £28590 on a loan figure of approx. £63,000 from 2006/7. They are only charging me for this year as this is the one with a COP8 enquiry.

[Fred Flinstone]

Yes, I have been quoted a figure of £28590 on a loan figure of approx. £63,000 from 2006/7. They are only charging me for this year as this is the one with a COP8 enquiry.

Is this the full settlement figure incl interest and penalties?

[LadyPenelope]

Is this the full settlement figure incl interest and penalties?

I am still waiting for the paperwork but it's according to the original Settlement letter, i.e. tax plus interest. They have finished the calculation and have posted the letter to me second class so it should arrive Saturday. I haven't seen a breakdown or anything written yet, so I don't know if it includes IHT or not.

When I first called them (yes I have been nagging them on the phone) I was quoted £25k but the calc hadn't been finalised. I posted on here before I got the letter in the hope of putting some minds at rest, as there has been some scary speculation. I'd still rather keep the money but really don't need the whole thing dragging on for years.

Will update when I get the lovely brown letter. The amount quoted is rather less than my own estimated calculation of interest plus 6 years tax.

[AlCapone]

Yes, I have been quoted a figure of £28590 on a loan figure of approx. £63,000 from 2006/7. They are only charging me for this year as this is the one with a COP8 enquiry.

That's 45%. Sounds high. Could be 40% tax and 5% IHT. Did you eat up your 20% allowance in salary?

[centurian]

That's 45%. Sounds high. Could be 40% tax and 5% IHT. Did you eat up your 20% allowance in salary?

It's also suspiciously close to the value it would be if HMRC were treating the amounts paid as net of tax - and grossing them up.

Look back a couple of pages - Rob79 suggested this is what might be happening (and was promptly shot down for saying so).