Settlement questions..

[difficulttimes]

So after the audacity of HMRC last week to propose a one-off tax due in April 2019 on pre-2011 loans I am now looking at what settlement will set me back as litigation now looks to be a lose-lose situation.

My loan was around the £20K mark and to be honest I never properly looked into CLSO as I had faith in a now redundant legal system. A couple of questions (apologies if they have been answered previously..)

1 – Is settlement still available? I understand that CLSO is now over but I read recently that HMRC are sending out letters encouraging people to settle now so I guess it’s still open?
2 – With settlement will HMRC do a proper calculation because with my APN it was based on five times your pay from X and not my P11D loan amount even though I have now sent that through a couple of times during my letter of representation which they continue to ignore.
3 – What happens with IHT? Does this apply on loan amount of this size
4- Did I read somewhere that NIC isn’t payable on settlement? Or is that wishful thinking?
5 – When does interest start? Is it when the discovery assessment was sent and not at the end of that financial year?
6 – Did I read somewhere that the trustees have it within their power to ask for the loans to be paid back at any point?

Thanks in advance

[CDJ]

So after the audacity of HMRC last week to propose a one-off tax due in April 2019 on pre-2011 loans I am now looking at what settlement will set me back as litigation now looks to be a lose-lose situation.

My loan was around the £20K mark and to be honest I never properly looked into CLSO as I had faith in a now redundant legal system. A couple of questions (apologies if they have been answered previously..)

1 – Is settlement still available? I understand that CLSO is now over but I read recently that HMRC are sending out letters encouraging people to settle now so I guess it’s still open?
2 – With settlement will HMRC do a proper calculation because with my APN it was based on five times your pay from X and not my P11D loan amount even though I have now sent that through a couple of times during my letter of representation which they continue to ignore.
3 – What happens with IHT? Does this apply on loan amount of this size
4- Did I read somewhere that NIC isn’t payable on settlement? Or is that wishful thinking?
5 – When does interest start? Is it when the discovery assessment was sent and not at the end of that financial year?
6 – Did I read somewhere that the trustees have it within their power to ask for the loans to be paid back at any point?

Thanks in advance

Hi difficulttimes

Firstly - this isn't law yet - there will be a consultation, although history tells us that if the Govt wants something they will get it (APNs were on much shakier ground, legally - IMHO - than this, with a lot of high level anti commentary - and they still went through). for your questions.

1) the technical note from HMRC did seem to imply they will still accept settlement via CLSO or similar - [email protected] - I think is the email. I would reach out to them - if thats what you want to do and given the amount of your loan, I'd certainly think it was worth doing - and see what they offer, but I would be surprised if they are not interested.
2) They will ask you for the details of what loans you received and make a calculation based on those amounts and the other info they have - they may ask for documentary proof (I was on EBT, so they had our P11Ds, which provided the documentary backup)
3) It depends on the trust documents. The info I got on mine was that if we wrote off the loan, it would trigger an IHT charge - but it is very complex bit of tax law, so its something you'd need to get advise on
4) One of the offers of the CLSO was that they wouldn't go after NICs on the loans and they would allow the trust/scheme fees as allowable deductions - i.e. they would only tax us on what we actually received.
5) Interest begins on Jan31st of the year when the tax was original due.
6) They always had and have this power.

[difficulttimes]

Thanks CDJ - let's hope that the lawmakers will see what the ramifications would be on the wider tax and legal system if something like this was to pass through parliament.

Last question - Is the interest 3% per annum?

[CDJ]

Thanks CDJ - let's hope that the lawmakers will see what the ramifications would be on the wider tax and legal system if something like this was to pass through parliament.

Last question - Is the interest 3% per annum?

YEs.. its been 3% pretty much since 2008.. but its indexed to the BOE rate..

[DotasScandal]

Thanks CDJ - let's hope that the lawmakers will see what the ramifications would be on the wider tax and legal system if something like this was to pass through parliament.

Last question - Is the interest 3% per annum?

You're new to this,uh?
The credibility of the legal and tax system of the UK was damaged fatally when retrospectivity was introduced in 2014 (there was the S.58 trial balloon before that of course).
This went in completely unopposed, though it took some lies from psychopath in charge David Gauke (Osborne's hitman and human shield).
To assume that Parliament will have some sort of epiphany here is laughable.
The only way is to join together in Big Group and fight it as a collective (yeah, not something that contractors like, I know)

[difficulttimes]

Settlement for post 2011 schemes

Does anyone know what the Ts&Cs are for settlement for post 2011 schemes? ie. Does the carrot of not paying NIC exist for settling on these schemes exist?

[DotasScandal]

Does anyone know what the Ts&Cs are for settlement for post 2011 schemes? ie. Does the carrot of not paying NIC exist for settling on these schemes exist?

Nope.

[difficulttimes]

So paying the APN and settling is the same? Well worse because you have a 3% interest penalty to pay. Do you think HMRC will come up with settlement terms for post 2011 schemes? ie. CLSO v2.0?

[LandRover]

So paying the APN and settling is the same? Well worse because you have a 3% interest penalty to pay. Do you think HMRC will come up with settlement terms for post 2011 schemes? ie. CLSO v2.0?

And not forgetting that HMRC have added scheme provider fees too, even though no one actually saw that money.

[DotasScandal]

So paying the APN and settling is the same? Well worse because you have a 3% interest penalty to pay.

NO - APNs do NOT offer any kind of finality. APNs do not include interest it is NOT the same. NOT THE SAME!

Do you think HMRC will come up with settlement terms for post 2011 schemes? ie. CLSO v2.0?

They already did - though it is not widely publicised. They did send such a "SO" to whom it may concern. Of course, CLSO v2 is no better than CLSO v1, so expect a similar level of uptake.