HMRC Enquiries: Bedouin/Redstone

[Peasnall]

I don't know. Some of these schemes have the added complication of IHT, so even paying the tax doesn't completely finalise things.

Given that you were only in the scheme for 5 weeks, the tax can't be very much. Even a few years interest on that would be pretty small; the HMRC interest rate is currently 3% per year. The lads you mention must have a hefty tax exposure to have clocked up £20,000 in interest.

You might be better off getting in touch with HMRC and saying you want to "settle" this, rather than just filing a self-assessment. (Settle/settlement is the term HMRC use for finalising matters.)

So you think it's worth writing to hmrc and explaining the situation and asking if I can settle this ?

[DonkeyRhubarb]

So you think it's worth writing to hmrc and explaining the situation and asking if I can settle this ?

If you want to get shut of it completely, then yes.

Two things I should point out:

1) If you settle, it is final and irrevocable. If the scheme was subsequently proved to be effective, then you would NOT get your money back.

2) I'm not sure where HMRC stand, with the Bedouin scheme, in terms of penalties. These are further charges (fines) that can be imposed in addition to interest. Hopefully this is a non-issue but best to be forewarned.

One final thing. I am not an accountant or tax advisor. If you want proper advice, consult a professional.

[Peasnall]

If you want to get shut of it completely, then yes.

Two things I should point out:

1) If you settle, it is final and irrevocable. If the scheme was subsequently proved to be effective, then you would NOT get your money back.

2) I'm not sure where HMRC stand, with the Bedouin scheme, in terms of penalties. These are further charges (fines) that can be imposed in addition to interest. Hopefully this is a non-issue but best to be forewarned.

One final thing. I am not an accountant or tax advisor. If you want proper advice, consult a professional.

Thanks for the advice. I'm off to see an accountant on Friday.

[DonkeyRhubarb]

Thanks for the advice. I'm off to see an accountant on Friday.

Just watch the accountant doesn't end up charging you an amount which is sizable in comparison to the tax bill.

For example, no point paying an accountant £1000 to deal with a tax bill of £2000.

[webberg]

Just watch the accountant doesn't end up charging you an amount which is sizable in comparison to the tax bill.

For example, no point paying an accountant £1000 to deal with a tax bill of £2000.

When you see the accountant ask him/her exactly what they intend to do, how long it will take and a fixed fee.

Settling with HMRC absorbs time and accountants charge by the hour.

Understand exactly what you're getting.

[Peasnall]

When you see the accountant ask him/her exactly what they intend to do, how long it will take and a fixed fee.

Settling with HMRC absorbs time and accountants charge by the hour.

Understand exactly what you're getting.

do you think I should just write then a letter myself ?

[Peasnall]

Had a chat with someone who's had a letter from hmrc regarding this. His bill was £22,000 for 5 weeks work (a ridiculous figure for the money he earnt) He spoke to his accountant and basically he said the tax man is on drugs and hmrc are clutching at straws with this one. He said because we signed a contract with Bedouin to pay us then Bedouin is responsible for this. So he told him not to worry and he will sort it for him.

[chubacabra]

He said because we signed a contract with Bedouin to pay us then Bedouin is responsible for this.

Wrong you are responsible for your tax affairs. The buck will stop with the individual.

Whether or not Bedouin will sort anything out on your behalf is another matter. Unfortunately as I found out, with many other schemes that simply is not the case.

[Peasnall]

Wrong you are responsible for your tax affairs. The buck will stop with the individual.

Whether or not Bedouin will sort anything out on your behalf is another matter. Unfortunately as I found out, with many other schemes that simply is not the case.

If someone is using a scheme like this what's the best thing todo? Put in a self assessment at the end of the tax year and declare everything (loans in particular)

[chubacabra]

If someone is using a scheme like this what's the best thing todo? Put in a self assessment at the end of the tax year and declare everything (loans in particular)

I can't answer that Peasnall, you definitely need to take professional advice on this as you could make the situation worse potentially.

I'm sure webberg will post at some point, he can give some better advice.

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