Rangers Tax Case

[DonkeyRhubarb]

When HMRC can just issue you an APN what does it matter?

No one wants to go to court. It's expensive. For you and HMRC.
They're hoping that once they've bankrupted you and taken your money you won't want the additional stress and expense of going to court to attempt to win your money back.

They won't be in any rush to go to court either. Even if you decide the fight is worth it, you go and you win they can appeal.
AND they don't have to pay you your money back as the case goes to a tribunal.

Guilty until proven innocent.

On the other hand, many taxpayers may feel they have nothing to lose going to the FTT (first-tier tribunal).

1) there are no court fees to pay
2) the FTT doesn't award costs, so there is no risk of having to pick up HMRC's legal bill
3) it only costs if you hire legal representation; in theory you could represent yourself and it would cost nothing other than your own time

I'm not advocating people represent themselves. If money is an issue then folks could club together to hire a decent lawyer. A few hundred people chipping in a few hundred quid each would go a long way.

That's what we (NTRT) are doing. It can be done if you put your minds to it.

Alternatively, you can just throw the towel in and let them beat you without even putting up a fight.

[StrengthInNumbers]

I think HMRC will issues APNs in bulk very soon. By targeting the weak cases they could easy satisfy lords by give 6 months data and then comes a tsunami is APNs. Courts are the only rescue

[dangerouswhensober]

I think HMRC will issues APNs in bulk very soon. By targeting the weak cases they could easy satisfy lords by give 6 months data and then comes a tsunami is APNs. Courts are the only rescue

I think (and I have no special inside knowledge of the workings of HMRC) that this is unlikely, for two reasons:

(1) HMRC stated in July 2014 that they would be issuing an average of 4,000 APNs per month, from August 2014 through to the end of 2015. This seems to be their capacity to handle the paperwork. Remember that APN paperwork has to be accurate (regarding figures, loan details, etc.), otherwise it can be challenged on the grounds of material error. All of that detail takes resources to produce and check, and

(2) The election timing means that any APNs issued now (in January and February) have the potential to cause 'bad' headlines 90 days later i.e. around April and May time - just when the election is due. It seems that the earlier APNs were issued in cases which were fairly easy to attack legally (from the HMRC viewpoint), and the recipients were fairly high net-worth individuals (who could afford to settle the APNs quickly). Roughly speaking, the APNs during this year will be on untested schemes (e.g. EBT schemes) and will be going to people who (by and large) can't settle quickly (if at all) - and that vastly increases the risk of bad headlines in public for both HMRC and the government. (BTW - this also partly explains the extension of the Settlement Offer - until the election is well out of the way and HMRC know which masters they have to satisfy in July).

I would guess that HMRC have 'graded' the schemes they are attacking, with the easiest targets getting the first APNs, and so on down the list. And, given that they haven't won an EBT case in court yet, then the EBT schemes should be fairly well down the list. (By which time, hopefully, the Judicial Review of FN/APN will have been completed and the Rangers case will have been finally lost to HMRC in the Supreme Court).

I've stopped worrying about getting a brown letter on the door-mat - the future course of this purge by the government and HMRC seems to me to be far too unclear ...

[DonkeyRhubarb]

(1) HMRC stated in July 2014 that they would be issuing an average of 4,000 APNs per month, from August 2014 through to the end of 2015.

Actually it was 2000/month and it would take 2 years to 2016 to issue all 43,000. Even this is an aggressive/optimistic target.

Apart from that, I pretty much agree with your analysis.

[StrengthInNumbers]

1) settlement opportunity was/is a data collection exercise. HMRC get a sample pool from each scheme to template/ model what should be figures based on p11d and pay slips. Even if p11d missing the can estimate based on sample pool. Burden reduced and issuing APNS become easy.
2) HMRC can also twist stats and good headlined. General joe on street has been told tax avoiders are evil. Money collected can also be used to get more election winning budget in mar.

I also have no insight into how HMRC works. My thinking above.

[dangerouswhensober]

Actually it was 2000/month and it would take 2 years to 2016 to issue all 43,000. Even this is an aggressive/optimistic target.

Apart from that, I pretty much agree with your analysis.

Yes - sorry for my figure of 4,000 APNs per month - you are much closer ...

Here is a quote from AccountingWeb published last October:

'HMRC expects to be issuing 2,500 notices per month by January 2015 and is “on track” to deliver notices to 43,000 scheme users, covering £7.1bn of disputed tax, by the end of March 2016.'

Accelerated payment notices reach £250m | AccountingWEB

[DonkeyRhubarb]

I bet it will be pandemonium on CUK when tens of thousands of contractors start receiving APNs.

If I was a moderator I think I might take an extended holiday.

[dangerouswhensober]

How much has HMRC collected from APNs so far ...

There was an article in AccountancyAge dated December 15th which stated how much HMRC had collected to date.

And the grand total number of all the scheme individual users who had paid up to December is ....... only slightly more than 30 !!!

The article is headlined "HMRC pockets £32m from tax avoidance scheme users"

Here are a couple of quotes from the article:

"Some 30 scheme users were told in August they had 90 days to pay a total of around £29m of disputed tax upfront under the new Accelerated Payments Regime. HM Revenue and Customs (HMRC) has secured almost all of the disputed tax due, reports sister publication Professional Adviser."

"HMRC said more than 99% of this money was paid within the deadline. Taking into account other payments, it has received £32m in disputed tax to date."

"Financial secretary to the Treasury David Gauke said: 'The high success rate for the first set of accelerated payments notices shows avoidance scheme users are having to face up to the reality that they should pay their tax upfront, like the vast majority of taxpayers.'"

The whole article is here:

HMRC pockets £32m from tax avoidance scheme users - 15 Dec 2014 - Accountancy Age

So basically HMRC is crowing that using APNs it recovered money relatively quickly from a small number of fairly well-heeled individuals (and these 30 must have been quite wealthy to be able to collectively pony-up £29m within 90 days).

It looks like the HMRC positive spin machine has ramped-up into over-drive ... I hope the House Of Lords isn't dumb enough to believe the majority of what HMRC is saying ...

[comeonrangers]

APN expected to be Recieved for an EBT case

Have not posted before as I am not a contractor but rather an employer who used an EBT scheme in 2010.

However thought you would want to know we received a notification letter over the festive period saying we would be getting an APN in the next 2 - 4 weeks.

I had assumed due to Rangers case that EBT cases would be put to the bottom of the pile as there are far easier film schemes to tackle first. Looks like I was wrong and actually HMRC may be trying to get the money in from the EBT schemes before the Ranger case is concluded. Puts them in a much better position to argue holding the cash than not I guess.

Our scheme is almost identical to the rangers one apart from the fact that we put through about 0.1% of the money.

[dangerouswhensober]

Have not posted before as I am not a contractor but rather an employer who used an EBT scheme in 2010.

However thought you would want to know we received a notification letter over the festive period saying we would be getting an APN in the next 2 - 4 weeks.

I had assumed due to Rangers case that EBT cases would be put to the bottom of the pile as there are far easier film schemes to tackle first. Looks like I was wrong and actually HMRC may be trying to get the money in from the EBT schemes before the Ranger case is concluded. Puts them in a much better position to argue holding the cash than not I guess.

Our scheme is almost identical to the rangers one apart from the fact that we put through about 0.1% of the money.

Thank you posting this !

Has there been a First Tax Tribunal decision in the case of your scheme ?

(On 9th July 2014, during the committee stages of the Finance Act, Lin Homer said that they will at this stage only seek accelerated payment in cases where there has already been a FTT tribunal decision in their favor.)