can I contact HMRC to settle

[HebdenMole]

Wow thanks all for your advice. A lot of differing opinions.

I am not entirely sure how I would go about working out the exact amount of tax I owe, perhaps this is where I should seek independent advice.

Any recommendations for independent advisors?

[washed up contractor]

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....

Yep, which is why I said you dont need to bother about the interest when calculating the CTD.

The only time you would be bothered is if your CTD did not fully cover the disputed tax 'debt.' In that case interest would accrue on the difference between the CTD and total tax 'debt.'

If you hold a CTD of 100k or more, HMRC kindly give you a measeley amount of interest back but only upto 6 years.

[webberg]

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.

Oh well, seems that having professional qualifications in this area and 40 year experience is not enough. I'll just have to work a bit harder.

[HebdenMole]

Does anyone know how much it costs for independent advice?

[HebdenMole]

Just be aware that by settling the tax position, you are not removing any loan liability.

Doing that subsequently, may well incur more tax charges that HMTV will be reluctant to give you an indemnity for, even if you have settled.

Tread carefully.

If you can afford it, go and get some advice.

What is loan liability? My scheme are no longer running.

[BrilloPad]

What is loan liability? My scheme are no longer running.

That does not mean that the beneficiaries are no longer around.....

[webberg]

What is loan liability? My scheme are no longer running.

You'll find that the liability to repay the lender will survive the scheme closing down.

[HebdenMole]

You'll find that the liability to repay the lender will survive the scheme closing down.

So you are saying I might have to repay the loans plus pay HMRC tax?

[webberg]

It's certainly possible.

HMRC are tax collectors. They did not sign the loan agreement - you did.

Consequently, whether the tax is paid or not, the loan remains outstanding and HMRC has absolutely ZERO authority to intervene if repayment is demanded.

We have seen situations painted whereby HMRC say that if you settle the tax, they will assume that the loan will be worthless or be deemed to be written off. That is an assumption made as part of an extra statutory settlement.

Unless you have a statement from the lender saying that they will take action to remove the liability (and that in itself may create an income tax or IHT liability), then the agreement with HMRC means NOTHING if the lender presses for repayment.

I think the lesson is that you need to be happy that both tax and loan are dealt with before agreeing any settlement.

[HebdenMole]

It's certainly possible.

HMRC are tax collectors. They did not sign the loan agreement - you did.

Consequently, whether the tax is paid or not, the loan remains outstanding and HMRC has absolutely ZERO authority to intervene if repayment is demanded.

We have seen situations painted whereby HMRC say that if you settle the tax, they will assume that the loan will be worthless or be deemed to be written off. That is an assumption made as part of an extra statutory settlement.

Unless you have a statement from the lender saying that they will take action to remove the liability (and that in itself may create an income tax or IHT liability), then the agreement with HMRC means NOTHING if the lender presses for repayment.

I think the lesson is that you need to be happy that both tax and loan are dealt with before agreeing any settlement.

Thank you. I am considering joining Big Group. Don't know if this is a better option than settling directly with HMRC.

Appreciate any thoughts as I am really all at sea here.