Tick tock for 2011/12

[webberg]

On 5th April 2016, HMRC's ability to issue a discovery assessment for 2011/12 within the "non contentious" 4 year window, CLOSES.

If you are exposed for that year and have had no valid section 9A enquiry notice, then you are likely to be on the receiving end of a discovery notice.

HMRC is preparing the ground now. They are collecting data, making requests for information - sometimes with the support of the law, sometimes not - and certainly speaking with some providers from that time who are still around (not many).

They will run this information exercise until perhaps Christmas and start issuing assessments in early 2016.

(I'm not running a book on whether these start arriving around December 18th in order to use Christmas as lever).

If you receive such a beast - GET ADVICE.

You can make an appeal yourself. You can include a request to postpone payment.

To date, almost all postponement requests have been granted. where the Discovery Assessment is for a scheme that has not been disclosed under DOTAS, will that continue to be the case?

I have a real fear that it may not. If it is refused, you may have to appeal that decision. That may mean a Tribunal appearance. (I'm also sure that if this happens a lot, we will hear talk of Judicial review. My views on JR are well known but for what it's worth I'll repeat that I see JR as an expensive waste of time and money in this situation and for APN).

We may also see changes in APN law in the Autumn Statement and/or the March 2016 Budget.

So forewarned is forearmed.

You may well get a Discovery Assessment in the next 6 months for 2011/12.

If you do and are not confident in making an appeal as above, get advice.

[EBTContractor]

Question..

Will this be going to people who did or did not submit a SA for 2011/12, with/without loan details, with/without name of employer/scheme promoter? What if you were self employed?

If you submitted a SA in 2011/12 then the enquiry window would have closed in April 2013.

is HMRC now saying that they will issue a discovery assessment to people who DID submit a SA, because they believe not all information was divulged on the SA?

[zimbtar]

If you were in the unfortunate position to have used any form of mechanism to simplify your tax affairs (escape the brutality and legislative burden of IR35) then the assumption and tone of the letter is that you are still using one.

There is no - "If you haven't used a Trust or loan scheme or any other form of avoidance please let us know" section to the letter.

DOES help if they send their letters to the right address though.

[mst1958]

In response to EBTContractor.
I think they have 12 months after the SA so 2011/12 would be due 31/01/2013 so they have until Jan 2014 unless it was submitted late.
However they can get around this as I was sent a SA check for 2012/13 in Dec 2014 which was followed up by a SA check for 2011/12 in May 2015 as they stated that as there were inaccuracies in 2012/13 they were now looking into earlier returns.
They requested details of loans (from AML) and last week I received an assessment for 2011/12 which is for the full amount of fees earned i.e. they have added gross salary declared on SA to loan amounts and then factored up assuming that salary + loan is 82%. I don't think this is right and probably a deliberate ploy to 'get your attention'. I will certainly be disputing the 18% I have not personally received that they are charging tax & NI on.

[webberg]

Will this be going to people who did or did not submit a SA for 2011/12, with/without loan details, with/without name of employer/scheme promoter? What if you were self employed?

If you submitted a SA in 2011/12 then the enquiry window would have closed in April 2013.

is HMRC now saying that they will issue a discovery assessment to people who DID submit a SA, because they believe not all information was divulged on the SA?

Yes.

Whether you submitted an SA or not, whether you were told NOT to submit an SA return, if you received loan income form a scheme in 11/12 then chances are your Christmas present is a discovery assessment.

[webberg]

In response to EBTContractor.
I think they have 12 months after the SA so 2011/12 would be due 31/01/2013 so they have until Jan 2014 unless it was submitted late.
However they can get around this as I was sent a SA check for 2012/13 in Dec 2014 which was followed up by a SA check for 2011/12 in May 2015 as they stated that as there were inaccuracies in 2012/13 they were now looking into earlier returns.
They requested details of loans (from AML) and last week I received an assessment for 2011/12 which is for the full amount of fees earned i.e. they have added gross salary declared on SA to loan amounts and then factored up assuming that salary + loan is 82%. I don't think this is right and probably a deliberate ploy to 'get your attention'. I will certainly be disputing the 18% I have not personally received that they are charging tax & NI on.

The HMRC approach is to say that actually you did receive the 18% but then paid it to the scheme provider and that is not a business/employment expense.

It's a question of what income has been earned (if we're looking at employment) or has arisen (if other income). Is it 100% from which 18% is paid or 82%?

How long have you got for an answer?

[EBTContractor]

Yes.

Whether you submitted an SA or not, whether you were told NOT to submit an SA return, if you received loan income form a scheme in 11/12 then chances are your Christmas present is a discovery assessment.

Thanks

But surely hmrc will only send out a discovery assessment if they have actual proof of any loans?

I received an enquiry into 2012/13 which was closed.

Not been enquired about or received assessments for other years and i have completed SAs every year.

[regron]

Thanks

But surely hmrc will only send out a discovery assessment if they have actual proof of any loans?

This is what I thought and questioned my provider about this. Their response was that HMRC could, if they wanted, send a Schedule 36 notice (link below) to receive this information anyway. Not sure how true that is and haven't tested it as they have received my figures for 2011/12.

Webberg, do you have an opinion on this ?

CH20150 - Information & Inspection Powers: Overview: Schedule 36 FA 2008

[EBTContractor]

This is what I thought and questioned my provider about this. Their response was that HMRC could, if they wanted, send a Schedule 36 notice (link below) to receive this information anyway. Not sure how true that is and haven't tested it as they have received my figures for 2011/12.

Webberg, do you have an opinion on this ?

CH20150 - Information & Inspection Powers: Overview: Schedule 36 FA 2008

They must have proof of or assume a connection with AML in earlier tax years. Especially if AML was used in 2012/13.

But to be asking about 2011/12 without stating what they know sounds like a fishing expedition to me and they're hoping for people to fall for it.

I'd tell them to divulge said facts and inaccuracies.

[SCR]

They must have proof of or assume a connection with AML in earlier tax years. Especially if AML was used in 2012/13.

But to be asking about 2011/12 without stating what they know sounds like a fishing expedition to me and they're hoping for people to fall for it.

I'd tell them to divulge said facts and inaccuracies.

Hi

I have also been caught up in 1 year EBT and 4 years PBT - not a nice few years ahead of more brown envelopes hitting the door mat.

I am in the process of trying to work out if I had funds available (at the moment I dont) to pay all this off how much it would and how likely HMRC would be at collating it together and agreeing to a settlement.....

I am looking at a 6 figure sum which I am obviously going to struggle to pay this... Does anyone have any information on what HMRC would agree to if I went to them and agreed to try and close this once and for all. I.e would they accept 75% of the amount to be paid off if I agreed to do this over x amount of years and paid a lump sum up front?

I may be fortunate enough that I can get a loan from a relative.

I am just stressed to the max over it all - I have spoken to WTT who btw are fantastic and are really the first point of call I would advise anyone worrying about this to go to. You can lay all your cards openly and they will advise what the next steps for your situation should be. Each and everyone's situation is likely to be different however the large majority cannot pay within the unrealistic timescales HMRC throw at us.

BTW HMRC im sure you are reading this - I read recently that PBT loans need to be paid back to the company within 56 years....

Any info appreciated - please no negativity this is difficult for everyone and im sure is affecting each person and family just as hard.