Calculating Potential APN

[webberg]

Hmmm... so should I expect the APN amount to be the same as the tax payable amount in my settlement calculation (ie, tax payable on loans / income and no interest)?

Or might the APN amount be totally different? (higher)

[The loans amount Hector used for my settlement calculation is pretty much accurate.]

Thanks

Likely that the APN is higher.

Certainly in schemes I've seen where settlement is offered at say 25% of original claim, the APN arrives for 100% of the tax in dispute. This is either a deliberate tactic from HMRC in trying to pressure people into settling or one HMRC hand not knowing what the other is doing.

In your cases I suspect that the numbers will be pretty close.

[pimpernell]

Nicely summed up mr weberg.

[squirrel]

Likely that the APN is higher.

Certainly in schemes I've seen where settlement is offered at say 25% of original claim, the APN arrives for 100% of the tax in dispute. This is either a deliberate tactic from HMRC in trying to pressure people into settling or one HMRC hand not knowing what the other is doing.

In your cases I suspect that the numbers will be pretty close.

HMRC have always maintained there will be no settlement other than the full figure haven't they? which schemes HMRC have offered 25% deals to prior to issuing APN's?

[webberg]

HMRC have always maintained there will be no settlement other than the full figure haven't they? which schemes HMRC have offered 25% deals to prior to issuing APN's?

Apologies, that was a bit clumsy.

In the sort of film schemes I deal with, a common settlement proposal is "tax relief on the cash invested", which can be between 5% and 36% of the gross claimed. I therefore get such offers across my desk with an APN for the 100%.

In your case, there is no "cash invested" and therefore HMRC say that the full amount received is the taxable amount.

I did sort of attempt to say that APN and settlement would be similar but it was not clear.

That said, I think that there is scope for putting a plan to HMRC that the taxable income should be less than 100% of the received value. I'm sure the providers are doing that.

[dangerouswhensober]

25% settlements

HMRC have always maintained there will be no settlement other than the full figure haven't they? which schemes HMRC have offered 25% deals to prior to issuing APN's?

I agree with the a previous poster - a very nice, concise summary from Mr Webburg - perhaps this post should go in a sticky somewhere, to give new forums visitors some background.

And to echo the previous question - to which schemes/individuals have HMRC have offered 25% deals (presumably after APNs and resistance) ?

(IMO, that level of discount would have seen / will see a lot more contractors likely to settle ...)

[dangerouswhensober]

Sorry ...

Apologies, that was a bit clumsy.

In the sort of film schemes I deal with, a common settlement proposal is "tax relief on the cash invested", which can be between 5% and 36% of the gross claimed. I therefore get such offers across my desk with an APN for the 100%.

In your case, there is no "cash invested" and therefore HMRC say that the full amount received is the taxable amount.

I did sort of attempt to say that APN and settlement would be similar but it was not clear.

That said, I think that there is scope for putting a plan to HMRC that the taxable income should be less than 100% of the received value. I'm sure the providers are doing that.

... I think my last post crossed with your reply ...

[webberg]

I agree with the a previous poster - a very nice, concise summary from Mr Webburg - perhaps this post should go in a sticky somewhere, to give new forums visitors some background.

And to echo the previous question - to which schemes/individuals have HMRC have offered 25% deals (presumably after APNs and resistance) ?

(IMO, that level of discount would have seen / will see a lot more contractors likely to settle ...)

Needs to be amended if it becomes a "sticky"

[squirrel]

Apologies, that was a bit clumsy.

In the sort of film schemes I deal with, a common settlement proposal is "tax relief on the cash invested", which can be between 5% and 36% of the gross claimed. I therefore get such offers across my desk with an APN for the 100%.

In your case, there is no "cash invested" and therefore HMRC say that the full amount received is the taxable amount.

I did sort of attempt to say that APN and settlement would be similar but it was not clear.

That said, I think that there is scope for putting a plan to HMRC that the taxable income should be less than 100% of the received value. I'm sure the providers are doing that.

That still seems odd but I'm no tax accountant so I'm not surprised I don't follow it :-) Is the 5% - 36% (or whatever the ranges may be) directly related to how much tax relief the individual tried to claim rather than the invested amount? If it's the former, I get it, and get why there is a difference in each case. If it's the latter then how can HMRC be asking for the full tax on, say a £100,000 investment when you've only tried to offset £20.000 for tax relief?!?

Or is the 5% - 36% the offer that the scheme user has made to HMRC?

I think what I'm trying to ascertain is if there are any breaks being given to users of some schemes but not others...

[webberg]

That still seems odd but I'm no tax accountant so I'm not surprised I don't follow it :-) Is the 5% - 36% (or whatever the ranges may be) directly related to how much tax relief the individual tried to claim rather than the invested amount? If it's the former, I get it, and get why there is a difference in each case. If it's the latter then how can HMRC be asking for the full tax on, say a £100,000 investment when you've only tried to offset £20.000 for tax relief?!?

Or is the 5% - 36% the offer that the scheme user has made to HMRC?

I think what I'm trying to ascertain is if there are any breaks being given to users of some schemes but not others...

Oh dear - Pandora's Box.

I'm happy to respond on PM but think that there is no direct read across from the film scheme scenario to EBT type scenarios.

I suspect to get into this will take up space and distract from the thread here.

As I said, PM if you're interested.

[DonkeyRhubarb]

Bottom line.

The tax stated in the APN should be the same as in any previous assessments.

There are no deals/discounts for EBTs.