can I contact HMRC to settle

[washed up contractor]

hi, I was in a scheme for 2014/15 so I know I will receive a demand to pay at some point. I would much rather just contact HMRC to say look, I was in this scheme, here are my bank statements, what do I owe?

Has anyone else done this? Is it a terrible idea? I just hate being in limbo and would much rather just pay it now and stop it hanging over me.

I have savings. Probably not quite enough but could pay a good chunk of what I owe and would hope I might be able to pay the rest in instalments . I was only in the scheme for a year.

At least being pre emptive rather than waiting for HMRC to issue closure notices, APN and possibly FNs, will save you from the stress.

It will also lessen any potential interest as well. Do what you consider is right for you. Even if HMRC havent opened an enquiry yet, you can still buy a certificate of tax deposit (CTD) for an amount you think you may owe. You do not need to take into account the interest that HMRC may add as the CTD stops this from the day you take it out.

You will have to work out how much tax you did pay and the amount of tax you should have paid then buy a CTD for that amount.

If you wait for HMRC to open an investigation, you might find the interest accrued without a CTD to be an eye watering amount.

[BrilloPad]

At least being pre emptive rather than waiting for HMRC to issue closure notices, APN and possibly FNs, will save you from the stress.

It will also lessen any potential interest as well. Do what you consider is right for you. Even if HMRC havent opened an enquiry yet, you can still buy a certificate of tax deposit (CTD) for an amount you think you may owe. You do not need to take into account the interest that HMRC may add as the CTD stops this from the day you take it out.

You will have to work out how much tax you did pay and the amount of tax you should have paid then buy a CTD for that amount.

If you wait for HMRC to open an investigation, you might find the interest accrued without a CTD to be an eye watering amount.

Just to clarift, interest does NOT compound. It is simple interest. And at the moment its quite low - only 3%.

However thats alot more than you get in most savings accounts....

[webberg]

At least being pre emptive rather than waiting for HMRC to issue closure notices, APN and possibly FNs, will save you from the stress.

It will also lessen any potential interest as well. Do what you consider is right for you. Even if HMRC havent opened an enquiry yet, you can still buy a certificate of tax deposit (CTD) for an amount you think you may owe. You do not need to take into account the interest that HMRC may add as the CTD stops this from the day you take it out.

You will have to work out how much tax you did pay and the amount of tax you should have paid then buy a CTD for that amount.

If you wait for HMRC to open an investigation, you might find the interest accrued without a CTD to be an eye watering amount.

It will save interest ONLY if you settle a year which has no open enquiry. Interest is charged in tax. If you make a voluntary payment, that is not tax and can't have interest added.

A year that has a valid enquiry will have interest charged on the settlement tax/NIC amount from the usual due date.

A CTD stops interest running from the date the CTD is acquired. For example, if your liability is due 31/1/15 (2013/14) and you buy the CTD 31/7/17 and you eventually settle 31/12/17, then you have saved 5 months interest or around 1.2% of the liability.

Interest is NOT compound.

[ChimpMaster]

It will save interest ONLY if you settle a year which has no open enquiry. Interest is charged in tax. If you make a voluntary payment, that is not tax and can't have interest added.

A year that has a valid enquiry will have interest charged on the settlement tax/NIC amount from the usual due date.

That's interesting (excuse the pun) because it means that there will be many people caught by the 2019 legislation - assuming it comes in - who do not have open enquiries on years going well back into the early 2000s.

[BrilloPad]

That's interesting (excuse the pun) because it means that there will be many people caught by the 2019 legislation - assuming it comes in - who do not have open enquiries on years going well back into the early 2000s.

And indeed it is entirely correct. REmember that often these "loans" did not need to appear on tax returns.

It will be interesting to see if it can be proved that any money transfered(I recently tried to get bank statements from 7 years ago - that was fun) or that these monies were actually loans.

[webberg]

That's interesting (excuse the pun) because it means that there will be many people caught by the 2019 legislation - assuming it comes in - who do not have open enquiries on years going well back into the early 2000s.

Or in other words we are looking at a RETROSPECTIVE TAX CHARGE.

That is egregious in the extreme.

[BrilloPad]

Or in other words we are looking at a RETROSPECTIVE TAX CHARGE.

That is egregious in the extreme.

And yet sadly legal since 2008. 2019 will be fun.

[ChimpMaster]

Or in other words we are looking at a RETROSPECTIVE TAX CHARGE.

That is egregious in the extreme.

Not as far as HMRC see it anyway.

And yet sadly legal since 2008. 2019 will be fun.

Legal since 2008 but the 2019 charge will extend back further than odd. Sounds odd doesn't it.

Best way is to avoid working from 2018 onwards so that you don't have to complete a tax return in 2019 onwards

[webberg]

Not as far as HMRC see it anyway.




Legal since 2008 but the 2019 charge will extend back further than odd. Sounds odd doesn't it.

Best way is to avoid working from 2018 onwards so that you don't have to complete a tax return in 2019 onwards

If only it were that simple.

[washed up contractor]

It will save interest ONLY if you settle a year which has no open enquiry. Interest is charged in tax. If you make a voluntary payment, that is not tax and can't have interest added.

A year that has a valid enquiry will have interest charged on the settlement tax/NIC amount from the usual due date.

A CTD stops interest running from the date the CTD is acquired. For example, if your liability is due 31/1/15 (2013/14) and you buy the CTD 31/7/17 and you eventually settle 31/12/17, then you have saved 5 months interest or around 1.2% of the liability.

Interest is NOT compound.

Nope, a CTD will not only stop interest which has no open enquiry. You can take a CTD any time you want so ergo, it will stop any interest HMRC later may deem to be applicable.

You do not even have to tell the CTD issuing department what tax dispute, potential or real, the deposit is against. You pay the money, they give you a certificate. You use that certificate to settle and stop any interest (provided the CTD cover the whole of the disputed tax) in the dispute such as the OP may have.

If it turned out HMRC decided there was no investigation needed (unlikely I know) you cash in your CTD and get your money back. If its for over 100K and held less than 6 years,you even get a measeley bit of interest too.

About the only thing you got right (and not for the first time LOL!) was that interest is not compound hence why you do not get a CTD of the tax 'debt' plus interest.