Settlement Opportunity

[TonyTucker]

She said the 2007/8 scheme came in to play because one loan payment from the 2007/8 scheme was made in 2008/9 tax year.

They also had me down for a scheme in 2009/10 but I'd gone PAYE by then.


I really don't think their info is great and the settlement opportunity is a guise for collecting missing data.

[Rob79]

...just out of interest are there any schemes that are not required to be notified under DOTAS? Many of the current (irritating) schemes seem to think that they fall outside DOTAS - surely that's an example of the failure to notify you mention above - which, hopefully, suggests that the current raft of suppliers will get their arse kicked at some point?

DOTAS rules are getting longer and longer but I reckon that a bit of careful planning and a peculiar slant on the law and we could knock up a non DOTAS scheme this afternoon.

Equally, we do share information with HMRC on structures we come across that escape DOTAS (allegedly).

One or two of them have had some "visits" from HMRC compliance. Shame.

If any company claims to be non DOTAS'able ask to the see the questions posed to a QC AND the answers.

[Rob79]

She said the 2007/8 scheme came in to play because one loan payment from the 2007/8 scheme was made in 2008/9 tax year.

They also had me down for a scheme in 2009/10 but I'd gone PAYE by then.


I really don't think their info is great and the settlement opportunity is a guise for collecting missing data.

That is nonsense.

Income is usually taxed on an arising basis and not a paid basis. If the income arose in 07/08 then it's taxable that year regardless of when paid.

I think you have a legitimate claim to have 07/08 dismissed.

[centurian]

If any company claims to be non DOTAS'able ask to the see the questions posed to a QC AND the answers.

Therein lies the problem - a scheme promoter may say they are non-DOTAS - without actually doing the slightest bit of background work to establish if they actually are.

Has anyone actually seen a QCs opinion of a scheme in advance of joining - I presume they just fob people off with - it's confidential - you might really be HMRC etc.

[jbryce]

Therein lies the problem - a scheme promoter may say they are non-DOTAS - without actually doing the slightest bit of background work to establish if they actually are.

Has anyone actually seen a QCs opinion of a scheme in advance of joining - I presume they just fob people off with - it's confidential - you might really be HMRC etc.

....a few of my ex-colleagues banded together a few years back and employed a tax barrister and a tax specialist from a reputable firm. They had sight of QC opinion of a scheme, validated it with their specialists who considered the scheme to be not only non-DOTAS but also a defensible avoidance scheme. They then had that validated by yet another specialist accountancy firm.
They do get paid at twice my rate. Their 'scheme' is expensive and I don't think it's representative of the typical contractor scheme that is still doing the rounds. They paid a lot of money for their DD, and they used the scheme until quite recently.
However, the horror stories of APN/FN has increased the risk to the point that, even with their legal and specialist opinion, two have left the scheme.

Avoidance schemes for contractors are dead. There's the hills - get running!

[DonkeyRhubarb]

Going forward DOTAS is probably dead.

No-one is going to want to join a scheme where they have to disclose it, pay the tax up front and then embark on costly and protracted litigation to try and get it back.

If AP doesn't kill off the mass marketed schemes altogether then it will drive them underground.

[Rob79]

Going forward DOTAS is probably dead.

No-one is going to want to join a scheme where they have to disclose it, pay the tax up front and then embark on costly and protracted litigation to try and get it back.

If AP doesn't kill off the mass marketed schemes altogether then it will drive them underground.

There used to be a defence for schemes not disclosed under DOTAS. If you could show that you had consulted with an "expert", normally a tax barrister, and his/her view was that you had grounds for not disclosing, then if a subsequent Court decision said you should have done, no penalty would be due. As you can imagine many promoters flocked to barristers who were well known for always saying "yes".

That defence is no longer available.

Instead many schemes are now said to be not eligible for disclosure on the flimsiest of grounds.

Treat any scheme that says is it non DOTAS with MAXIMUM CAUTION.

Not only is that self granted designation probably incorrect BUT any user of the scheme could be held liable for a penalty if they do not disclose it AND when HMRC find out (which they will), you will get APN's (on the grounds that the scheme was "notifiable") and a hefty tax penalty.

This is an area in which I have been know to rant, but I don't have time at the moment.

[Rex Munday]

Going forward DOTAS is probably dead.

No-one is going to want to join a scheme where they have to disclose it, pay the tax up front and then embark on costly and protracted litigation to try and get it back.

If AP doesn't kill off the mass marketed schemes altogether then it will drive them underground.

Which is exactly what Gauke wants so his missus and his mates can get back to making a motsa from bespoke schemes for toffs

[DownButNotOut]

Finally received my reply from the settlement offer

No HMRC cannot include 07/08 in an 08/09 assessment and to even think that is absurd and illegal.

If you genuinely have no 07/08 open enquiry or COP8 then you are home and clear for that year. Tell HMRC to either prove to you that the year is open or formally drop any claim.

Her advice on APN is also wide of the mark. An APN can be issued for any scheme that meets the conditions. DOTAS started in 2004 but really got going in April 2006. I suggest that almost all schemes should have been notified after that date. If it was not, then arguably an offence has occurred.

That offence is failure to notify. This carries a heavy fine these days (up to £1m!) but previously were much less. There is also a priority as to who is meant to notify which starts with promoter and ends with user.

So the letter finally arrived, it only took 6 weeks and to be honest hasn't told anything new

Dear XXXXXX

Thank you for contacting HMRC in respect of the settlement offer.

We have opened Section 9a into the tax years 5 April 2006, 2007 and 2008. We have issued a Discovery Assessment for the tax year ending 5 April 2009.

We sent a calculation for the 2008 - 2009 tax year on 1 March 2013 and I have enclosed a copy of this calculation. We haven't issued any calculations for the 2005-2006, 2006-2007 or 2007-2008 years yet. If you would like calculations for these years can you let us know the amount of loans you received while working for XXXXX. This can be done by completing the form DO3 which is online at.........

OK, so I understand the letter. They haven't sent out discovery assessments for the years with an open enquiry because they don't know what the adjustments are. That's for me to do!
The thing is I thought there's a time frame for opening a Section 9a Enquiry. I've the correspondence for the discovery assessment from 2008 - 2009 but I've never had any correspondence or been made aware of the Section 9a enquires for previous years.

Should I ask for proof from HMRC when they opened the Section 9a enquires or am I wrong about the timeframe. Also has anyone attempted to complete the DO3 form?

Please help...

[pimpernell]

So the letter finally arrived, it only took 6 weeks and to be honest hasn't told anything new

Dear XXXXXX

Thank you for contacting HMRC in respect of the settlement offer.

We have opened Section 9a into the tax years 5 April 2006, 2007 and 2008. We have issued a Discovery Assessment for the tax year ending 5 April 2009.

We sent a calculation for the 2008 - 2009 tax year on 1 March 2013 and I have enclosed a copy of this calculation. We haven't issued any calculations for the 2005-2006, 2006-2007 or 2007-2008 years yet. If you would like calculations for these years can you let us know the amount of loans you received while working for XXXXX. This can be done by completing the form DO3 which is online at.........

OK, so I understand the letter. They haven't sent out discovery assessments for the years with an open enquiry because they don't know what the adjustments are. That's for me to do!
The thing is I thought there's a time frame for opening a Section 9a Enquiry. I've the correspondence for the discovery assessment from 2008 - 2009 but I've never had any correspondence or been made aware of the Section 9a enquires for previous years.

Should I ask for proof from HMRC when they opened the Section 9a enquires or am I wrong about the timeframe. Also has anyone attempted to complete the DO3 form?

Please help...

As far as I understand, HMRC have 12 months from the date of filing to open a Section 9a, assuming you haven't asked them to amend the returns for that year. So if you haven't previously received enquiries for years 2005 -2008, then these years are effectively closed. But best get Rob79 to confirm this.

SALF404 - Enquiries into Tax Returns: some notes on HMRC enquiries

SACM8010 - Making Enquiries into Claims: Time Limits