Overdrawn Capital Account Scheme (Aston Mae / Glen Mae / Procorre)

[DealorNoDeal]

Well I don’t think I would trust anything I was told by someone at HMRC!

the only definite way to find out is to get a professional advisor to comment but as far as I know this is a final closure. Can they reopen it at a later date? Maybe but only if there is compelling new information.

The closure notice means that they have found no errors on your return and there is, therefore, no tax due.

I know of cases where they issued CNs to the wrong people, due to an administrative error, but they didn't try to withdraw them and reopen the returns.

So, in answer to your question, I would say no.

[Chevalier]

Re closure notices notices issued in error, refer to Bristol & West vs HMRC. Certainly once you’ve received them (probably once they been posted in fact), that’s it…it’s all over and done. After that they can only be withdrawn by consent of both parties.

https://www.gov.uk/tax-and-chancery-...-ukut-0073-tcc

[handyandy]

So, in short, if you got a CN then buy a bottle of bubbly and breath!

[DealorNoDeal]

So, in short, if you got a CN then buy a bottle of bubbly and breath!

Yep. You're one of very few lucky ones in the HMRC lottery.

[rhubarb]

I was with Actinium for those two years and also received the same two letters yesterday.
Quite a relief I have to say, given life has basically gone down the toilet since then, and I would have absolutely no way of paying anything.

[DealorNoDeal]

I was with Actinium for those two years and also received the same two letters yesterday.
Quite a relief I have to say, given life has basically gone down the toilet since then, and I would have absolutely no way of paying anything.

That may be one of the reasons HMRC have dropped the case. They had just left it way too long to reasonably take any action.

I've certainly never heard of HMRC accepting that a scheme worked before, which is effectively what they've done by issuing those CNs.

[eek]

That may be one of the reasons HMRC have dropped the case. They had just left it way too long to reasonably take any action.

I've certainly never heard of HMRC accepting that a scheme worked before, which is effectively what they've done by issuing those CNs.

I suspect the issue that would never be admitted is that all the case work related to the case has been lost and everyone involved has left - leaving nothing for HMRC to work with

[DealorNoDeal]

I suspect the issue that would never be admitted is that all the case work related to the case has been lost and everyone involved has left - leaving nothing for HMRC to work with

That's certainly possible if a case is left to go cold for 15 years.

However, thinking about it a bit more. Someone mentioned earlier that it was an MSC type structure which pre-dated the MSC legislation, so I'm not sure where HMRC could have gone with this anyway.

[handyandy]

The aspect they were investigating was related to the dividend scheme that actinium used to pay out what the contractor had invoiced from the end client (except for a minimal salary that was paid this was how contractors got their money). It was never a loan scheme (which is what HMRC put the majority of their effort into as many other providers were using loan based methods to pay contractors). The structure of the companies that paid dividends on shares that had been awarded was quite complicated. I also understand that the whole structure of the scheme was designed by a tax counsel who approached Actinium (rather than the usual method which is for the provider to design the scheme and then ask counsel for advice) - that apparently made HMRCs job quite hard as they couldn’t then get any documentation that revealed any flaws or weak spots in the scheme (which a counsel would point out if they had been asked to provide an opinion) and this was a popular tactic of HMRC (ie use your own knowledge of where your scheme might fail against you).

I suspect the reason HMRC dropped inquiries on this scheme is for several reasons: 1. They realised they didn’t have a strong case (for the above reasons), 2. The amount of time that passed might be seen as a strong defence against them, 3. HMRC always had a strategy that they would attack schemes they felt were weaker first and leave the more complex ones till later - that way they got faster results and also chipped away at peoples resolve if they simply had to wait for a knock on the door.

However, I believe one member of this forum wrote to the FTT asking for HMRC to be required to provide a closure notice for this specific scheme. I do wonder if that forced their hand and, not being prepared to either fight that or provide a decision against the taxpayer they decided to give up. The risk to them of having to either defend closure or issue a detailed decision for more tax to be paid might have forced them to reveal their strategy against all similar schemes.

So one thing I;d be interested in knowing is whether the person who requested closure from the FTT ever heard anything. Also be interesting to hear if any other schemes have received closure notices saying no tax due.

Finally, I think this shows that HMRC are not quite the omnipotent beast they are sometimes feared to be. There real power is that they operate outside of a normal legal framework which means they can use delay tactics and threats of increasing sanctions to cow people into settling something that is legitimate - this would be against natural justice in almost all other circumstances in the UK.

[hudson]

The aspect they were investigating was related to the dividend scheme that actinium used to pay out what the contractor had invoiced from the end client (except for a minimal salary that was paid this was how contractors got their money). It was never a loan scheme (which is what HMRC put the majority of their effort into as many other providers were using loan based methods to pay contractors). The structure of the companies that paid dividends on shares that had been awarded was quite complicated. I also understand that the whole structure of the scheme was designed by a tax counsel who approached Actinium (rather than the usual method which is for the provider to design the scheme and then ask counsel for advice) - that apparently made HMRCs job quite hard as they couldn’t then get any documentation that revealed any flaws or weak spots in the scheme (which a counsel would point out if they had been asked to provide an opinion) and this was a popular tactic of HMRC (ie use your own knowledge of where your scheme might fail against you).

I suspect the reason HMRC dropped inquiries on this scheme is for several reasons: 1. They realised they didn’t have a strong case (for the above reasons), 2. The amount of time that passed might be seen as a strong defence against them, 3. HMRC always had a strategy that they would attack schemes they felt were weaker first and leave the more complex ones till later - that way they got faster results and also chipped away at peoples resolve if they simply had to wait for a knock on the door.

However, I believe one member of this forum wrote to the FTT asking for HMRC to be required to provide a closure notice for this specific scheme. I do wonder if that forced their hand and, not being prepared to either fight that or provide a decision against the taxpayer they decided to give up. The risk to them of having to either defend closure or issue a detailed decision for more tax to be paid might have forced them to reveal their strategy against all similar schemes.

So one thing I;d be interested in knowing is whether the person who requested closure from the FTT ever heard anything. Also be interesting to hear if any other schemes have received closure notices saying no tax due.

Finally, I think this shows that HMRC are not quite the omnipotent beast they are sometimes feared to be. There real power is that they operate outside of a normal legal framework which means they can use delay tactics and threats of increasing sanctions to cow people into settling something that is legitimate - this would be against natural justice in almost all other circumstances in the UK.

Call me a cynic but my opinion is that HMRC do not always want to close loopholes (for whatever reason ) , especially if fear, intimidation and paranoia deliver the returns they are looking for without having to tinker with legislation and risk "unintended consequences" to other parties.