HMRC Notice of Assessment APSE Consulting Ltd

[webberg]

There are two avenues HMRC use when preparing settlement calculations for schemes in which your own limited company was involved.

In very short summary, where your Own Co is used to route funds from an end client to a promoter vehicle and back to you, the fact that Own Co has some legal claim on the funds at some point in their transit has tax implications.

Add the fact that your Own Co and you are very closely linked for tax law purposes, it is almost certainly a "close" company and for many purposes seen as an extension of you, and the settlement calculations become complicated.

To deal with this, the settlement terms published in November 2017 suggests that one of two approaches will be adopted.

One is that the company is, to all intents and purposes, ignored. You are deemed to have received funds and as long as you pay the settlement on your own behalf, none of the money is deemed to have belonged to the Own Co at any time and as such the company has no claim for increased tax relief and you have no benefit arising from the company meeting liabilities on your behalf.

The other is that the company is deemed to be liable to certain sums (employers NIC especially) and that if the Own Co has no funds, but you have settled on their behalf, you are deemed to have lent the Own Co money to meet its liabilities. This may avoid the charge that the company has met certain of your liabilities (and therefore a BIK charge) and create a tax deductible amount for the company (CT relief) but could be more expensive in cash terms.

The second route might be useful if Own Co is still around but pretty pointless is not.

We have seen calculations on both routes (HMRC tends to send out two calculations and two offer letters which creates confusion) and all I can say is that we have yet to agree one because of multiple errors in concept and calculation.

In summary, where the Own Co is still around and can make use of additional CT deductions, the calculation is worth looking at.

[Iter]

Thanks webberg

Advice noted. One other thing I forgot to mention was that there is actually a deduction in the calculation related to Corp Tax, almost like a rebate is factored in. I wasn’t expecting this?

Just bumping[emoji846]
For one of the tax years in settlement there is CT offset against company liabilities.

Also has anyone on this forum discussed writing off loans with the trust?

[Iter]

Thanks webberg

Advice noted. One other thing I forgot to mention was that there is actually a deduction in the calculation related to Corp Tax, almost like a rebate is factored in. I wasn’t expecting this?

[webberg]

I’ve received some settlement figures now. During a period of approx 1.5 yrs I was operating LTD and receiving the MW trust loans. Prior to this I was Employed by via trade for about 6 months.
It seems the calculations have a separate liability for LTD and SA, for the limited company side of things I’m trying to understand if the figures would include all tax, employee AND employer NI? I read previously from webberg that in this situation this double taxation may occur.

I take it that tax paid at source (ie in this case what is now declared as the ltd PAYE and NI figures) should be reflected in any SA liabilities?

Before responding back, just wanted to understand anyone else opinions if settling. The calculation spreadsheet they have used looks like something a 5 year old could have created.

The following may not help I'm afraid.

We have seen a number of calculations in similar circumstances. Like you, we have struggled to find much integrity in them. We contacted HMRC who (eventually) spoke with us and as a result around half of the calculations we received, were withdrawn and we are told will be remade.

The principle here is that your limited company is liable to the tax on alleged remuneration paid to you via various means and there is a difference in the tax and NI due depending on whether you pay that settlement or the company does. This is what the rather naive settlement paper in November 2017 said.

Unfortunately the 5 year old who built the spreadsheet for HMRC is no longer around (probably a contractor who left) and the officers now using it appear to be struggling.

We are about to suggest a simpler version of the calculation but given that it falls short of the "maximise revenue" dogma of HMRC, I'm not holding me breath that it will be accepted.

Be careful - probe all the numbers and principles.

[Iter]

I’ve received some settlement figures now. During a period of approx 1.5 yrs I was operating LTD and receiving the MW trust loans. Prior to this I was Employed by via trade for about 6 months.
It seems the calculations have a separate liability for LTD and SA, for the limited company side of things I’m trying to understand if the figures would include all tax, employee AND employer NI? I read previously from webberg that in this situation this double taxation may occur.

I take it that tax paid at source (ie in this case what is now declared as the ltd PAYE and NI figures) should be reflected in any SA liabilities?

Before responding back, just wanted to understand anyone else opinions if settling. The calculation spreadsheet they have used looks like something a 5 year old could have created.

[WalterWhite]

Did you get any more information on this? I am also looking for independent advice. There seems to be so much vagueness and uncertainty around this area from hmrc and providers alike!

Happy to discuss if you would like to DM me

[heatsensor]

Hi,

I have also received a similar letter for my trust arrangement with MW solutions which was arranged and set up by Imagen - any recommendations of who to take advise that is independant?

I want to ensure I have a second opinion as I am being investigated for 3 years and being told by the trust advisors that everything is being managed by them and I do not need to worry - but I am!!

Did you get any more information on this? I am also looking for independent advice. There seems to be so much vagueness and uncertainty around this area from hmrc and providers alike!

[bizzle50]

PM

can I have access rights to PM please? I am new and need help urgently!!!!

[webberg]

Unfortunately I too have been involved with HMRC with regards to APSE. I'm now looking for closure and would like to know if I can disclose this under the Disguised Remuneration Scheme which ends 30th September 2018. Does anyone know if this can be done, even though HMRC have already contacted me?

Yes you can.

If you get the data to HMRC before Sunday 30th September apparently they "guarantee" you will reach a settlement before 5th April 2019. (!).

If you get info to them after that you will need to go full gas on them to get it done.

[WalterWhite]

Unfortunately I too have been involved with HMRC with regards to APSE. I'm now looking for closure and would like to know if I can disclose this under the Disguised Remuneration Scheme which ends 30th September 2018. Does anyone know if this can be done, even though HMRC have already contacted me?

I don't see why you wouldn't be able to, although you will need to be quick.