Settlement Opportunity

[NeedTheSunshine]

Thanks... normally I'm the fighting kind but in this case I want to settle and be done with it. I'm no longer in the UK, I have a toddler and a baby, and zero energy to try and battle an organisation that sounds like it can and will change the rules in their favour!

So yes, I want to be sure the amount I'm paying is accurate. Reading other people's posts it seems as though HMRC's calculations are a tad dubious.

My calculation was pretty much what I expected other than the Inheritance Tax bit (which I was not expecting). If you add the loans to all other income on your tax return for the year under enquiry you can use the published income tax bands and rates for that year to work out what the additional tax would be. The interest rates for late payments are also available on the HMRC website.

I'm not clear how the inheritance tax is calculated though. Looking through posts it would seem that not everyone has had inheritance tax added to their calculation.

[AlCapone]

If you're looking to buy time it might be better to just wait for an APN.

I may be wrong but I suspect HMRC will be more amenable to TTP with an APN. APNs are controversial and they may tread more lightly enforcing them.

I would have thought you're in a better position to discuss TTP with them if you volunteer your co-operation through settlement rather than them having to force your hand with an APN

[Rob79]

I would have thought you're in a better position to discuss TTP with them if you volunteer your co-operation through settlement rather than them having to force your hand with an APN

In some instances where HMRC is holding out a settlement formula, they already have time to pay arrangements agreed but very unhelpfully won't release any guidelines.

Once an APN is out there I think I would agree that a time to pay might be more difficult but... speak to HMRC as early as possible because if you've not been stupid and withheld information etc then I can see DMB agreeing to a time to pay arrangement.

[MrsB1974]

Don't understand why settle. You can conclude it with paying an APN and have a chance in court - but each to its own

In the July letter from hector they say that if you settle then you won't be charged NIC, "which may be pursued at the Tribunal".

Would that be just employEE NI or employER NI as well? (I was charged both whilst working through an EBT.)

Of course if IHT is charged on the settlement amount but (very?) unlikely via Tribunal then that 40% far outweighs the 12.5% + 8% in NIC (assuming I'd have to pay both employee and employer NI).

Urgh.........

[StrengthInNumbers]

NI will require retrospective legislation.

IHT is because loans are considered settled. But legally unless you get a letter from trustee to write the loan off, IHT is not correct. HMRC is not getting loans written off but charging IHT and u will still be liable if loans r recalled.

Think 1000 times before settling. HMRC is not acting responsibly and have not thought this through.

[DonkeyRhubarb]

Is the possibility of NIC/IHT/penaties just a bluff?

[Rob79]

Is the possibility of NIC/IHT/penaties just a bluff?

I need to investigate the NIC position further. I've started looking at this but it's fearsomely complicated and liability may depend on which analysis HMRC favours.

In short, if they treat you as having received salary from a non UK employer, then you would become liable to EmployEE's NIC on the sum.

If the analysis is that you become a deemed employer, then you could be liable to both ER's and EE's.

I know that there is a view expressed in this forum that NIC will never be due and hopefully I'll find the magic piece of legislation that says that. I have not done so yet and for the moment therefore would caution that NIC will be include in calculations.

If anybody can point me to the legislation I'm missing, I'd appreciate it.

[DonkeyRhubarb]

It would be interesting to know what Boyle ended up liable for. He was employed by a non-UK employer and received loans which the FTT deemed were employment income.

[AlCapone]

Think 1000 times before settling. HMRC is not acting responsibly and have not thought this through.

What's the real alternative to settling when your scheme provider has gone and nobody is defending your scheme?

[StrengthInNumbers]

Form a group, collect documents and get someone like Saleos to help and go to tribunal. Pay the APN but fight in court to have a chance. Defo u need analysis of what documents u have and what u don't. If it was a trust, it should be still around.