Finance Bill 2017-18 V HMRC DR Settlement Terms

[pimpernell]

Finance Bill 2017-18 V HMRC DR Settlement Terms

I settled in September this year. I applied for clso1 in June 2015 and that meant submitting a D03 form with loan amounts. HMRC never got back to me for over 18 months and when they did asked me to pay voluntary restitution for closed years. I wrote to them, pointed out that I had applied for clso1 and they changed the settlement terms accordingly. They were fair with me but I also pushed for what i believed I was entitled and stood up for my rights. That’s why I take exception to the continual HMRC slating and accusations that they’re all lying cheating duplicitous thugs and equally that we’re all hapless victims. I don’t think that mind set serves anyone. As far as I can tell they’re just doing a job ( not one I’d choose) however unpleasant. However I had acknowledged at least to myself that what I had done ( by being in a scheme) was dodgy and that I had to pay dues. Others may feel more aggrieved.

You settle a scheme for years - in my case to April 2011 If you were in more than one scheme and that’s not in the settlement then you are still liable for 2019 lc for the scheme not settled - or so I understand from others.

[pimpernell]

Finance Bill 2017-18 V HMRC DR Settlement Terms

It’s not a level playing field either. BG have had to show their hand and HMRC seem to have reacted accordingly. Considering 2017 FB HMRC have payed a blinder imho. They seem to have covered almost all angles: employer ( end client) not liable explicitly stated which in a game of chess puts the BG resolution one move off being checkmated as I understand it. Maybe BG see it differently however and I guess it all needs to be tested in law but I only see one winner as it stands.

[ConfusedEasily]

I settled in September this year. I applied for clso1 in June 2015 and that meant submitting a D03 form with loan amounts. HMRC never got back to me for over 18 months and when they did asked me to pay voluntary restitution for closed years. I wrote to them, pointed out that I had applied for clso1 and they changed the settlement terms accordingly. They were fair with me but I also pushed for what i believed I was entitled and stood up for my rights. That’s why I take exception to the continual HMRC slating and accusations that they’re all lying cheating duplicitous thugs and equally that we’re all hapless victims. I don’t think that mind set serves anyone. As far as I can tell they’re just doing a job ( not one I’d choose) however unpleasant. However I had acknowledged at least to myself that what I had done ( by being in a scheme) was dodgy and that I had to pay dues. Others may feel more aggrieved.

You settle a scheme for years - in my case to April 2011 If you were in more than one scheme and that’s not in the settlement then you are still liable for 2019 lc for the scheme not settled - or so I understand from others.

Ok - thanks. That makes sense. You settled at a time when the 2019 charge was known. You received a settlement that absolved you from closed years and has that written down.

The advice we paid for, and confirmed by HMRC, is that the 2019 legislation will require those who have settled years to declare closed years under 2019.

As you say they're just doing their job, and that job now gives them the ability to reopen closed years (in effect) so unless you have, like pimpernell, something explicitly stating that closed years for the same, different, whatever schemes are not going to be caught under the new legislation then you should seek legal tax advice and show them your settlement agreement.

Nothing in the two agreements I have seen mentions that closed years are covered, that years closed within the scheme are covered. Nothing in the legislation states that they are covered under CLSO1.

I think, pimpernell, that you are in a slightly different position to others who settled under CLSO1.

Don't assume that CLSO1 exempts you from anything. The agreement you signed captures the facts of the agreement and that is what will matter.

Luckily, of course, you can go to HMRC and point out that pimpernell got a different deal and they have to treat everyone the same. They will, of course, point out that CLSO1 was not a legal requirement and that the law has changed.

As ever - get advice.

[ConfusedEasily]

Don't be glib. Get advice.

One final thing. Pimpernel got a really good deal and managed to leave all of this behind (although why he is posting on here is beyond me). His deal was made very recently, he's probably the only one who has a deal at a time when the 2019 loan charge was known.

If you glibly assume that pimpernel's bespoke deal will apply to you, then you are taking the same attitude that got you into this mess in the first place.

Get advice.

[BrilloPad]

One final thing. Pimpernel got a really good deal and managed to leave all of this behind (although why he is posting on here is beyond me). His deal was made very recently, he's probably the only one who has a deal at a time when the 2019 loan charge was known.

If you glibly assume that pimpernel's bespoke deal will apply to you, then you are taking the same attitude that got you into this mess in the first place.

Get advice.

Someone else did settle in May this year.

[trotro]

One final thing. Pimpernel got a really good deal and managed to leave all of this behind (although why he is posting on here is beyond me). His deal was made very recently, he's probably the only one who has a deal at a time when the 2019 loan charge was known.

If you glibly assume that pimpernel's bespoke deal will apply to you, then you are taking the same attitude that got you into this mess in the first place.

Get advice.

HMRC cannot give special deals to just some people and not to others. Pimpernell is not an exception. Those who settled under CLSO1 are exempt of the loan charge under the scheme they settled for all years up and until 2010-2011.

HMRC published in 'writing' back in 2014 all conditions of CLSO1 and have referred back to those terms in subsequent documents regarding the Loan Charge and the CLSO2.

Initial wording of CLSO1 T&Cs stated the following:

"Reaching agreement now will mean that liabilities in relation to sums you have received under these arrangements for years up to an including 2010/11 are final” and “During this settlement opportunity we will restrict settlement to 2010/11, and earlier years for which we have open enquiries or assessments. In any future proceedings we will consider the conditions for all potential years of charge to 2010/2011, which could include years where there is no current enquiry or assessment"

Technical Note for the Loan Charge form HMRC (10th August 2016) confirmed this:

"Interaction with settlements

38. As also set out in chapter 5 of the technical note, the loan charge will not apply where income tax has been paid on a DR loan, or on the money from which the DR loan was made. This is provided for by the new double taxation provisions that are outlined in chapter 5 of this document. This includes cases where DR loans have been included in a settlement reached with HMRC.

39. Generally, where a DR loan hasn’t been included in a settlement, and tax hasn’t been paid on it, the loan charge will apply.

40. However, there are some cases where this does not apply due to the details of the terms on which those settlements were reached. For example, this is the case for those who settled on the terms offered as part of HMRC’s “Contractor Loans Settlement Opportunity”.

41. This means that where one of those individuals has had an offer of settlement accepted by HMRC on one or more loans from a DR scheme on such terms, the loan charge will not apply to those loans, or to any earlier DR loans implicitly covered by that settlement as a result of those terms.
"

...and in the recent document describing the CLSO2 HMRC clearly states:

"2.6 Previous settlements
Some employment based contractor loans schemes operated until 5 April 2011. If someone settled their use of these schemes by 16 March 2016, they don’t need to pay any further Income Tax or NICs to obtain relief from a future DR charge (including the loan charge) which would otherwise arise in relation to those schemes. This doesn’t apply to any scheme which they asked us to exclude from the settlement.

For any settlement entered into after 16 March 2016, or any settlement in relation to a scheme which operated after 5 April 2011, the amounts in respect of which relief from a DR charge can be claimed will be restricted to those specified in the settlement agreement."

As stated in other previous comments, CLSO1 covered only pre-2011 loan schemes. The "carrot" that invited pre-2011 users to settle was the fact that the liabilities were final. If you did not settle the liabilities (open years with enquiries and/or discovery assessments + interest), HMRC were going to try to go for the closed years too, and some time later they came up with the loan charge magic trick.

If the above is not sufficient written confirmation, I am not sure then what else is.

[ConfusedEasily]

Someone else did settle in May this year.

I'd count May as recently and the devil is in the detail. The facts.

Just because one assumes that a CLSO1 type settlement covers closed years doesn't make it fact unless it is enumerated in the agreement or the 2019 legislation states it is covered.

Don't assume anything. Some assumed that that EBTs were effective or the agency that made you use the 'Umbrella' knew what they were doing.

Get advice.

[BrilloPad]

I'd count May as recently and the devil is in the detail. The facts.

Just because one assumes that a CLSO1 type settlement covers closed years doesn't make it fact unless it is enumerated in the agreement or the 2019 legislation states it is covered.

Don't assume anything. Some assumed that that EBTs were effective or the agency that made you use the 'Umbrella' knew what they were doing.

Get advice.

There will be no details or facts about this one.....

[ConfusedEasily]

And calm....

My exposure to this is only for a closed year and CLSO1 didn't apply to me (I didn't even know about it).
My exposure isn't as high as many and I don't want to wind anyone up. This is a tragedy for many (I think eek said there had even been suicides).

I'm not going to settle with CLSO2 because:
a. HMRC haven't actually told me about it.
b. I have no records for the period in question.
c. I'd rather give the money to charity.

If I've wound anyone up I apologise. But please, get advice, join BG, anything - just don't rely on this forum to offer solutions that fit your circumstances.

[pimpernell]

Finance Bill 2017-18 V HMRC DR Settlement Terms

One final thing. Pimpernel got a really good deal and managed to leave all of this behind (although why he is posting on here is beyond me). His deal was made very recently, he's probably the only one who has a deal at a time when the 2019 loan charge was known.

If you glibly assume that pimpernel's bespoke deal will apply to you, then you are taking the same attitude that got you into this mess in the first place.

Get advice.

My deal wasn’t bespoke. It was the same deal as everyone got under clso1. You seem to struggle to grasp this? HMRC were just late that’s all - admin problems their side - and I admit I used it to my advantage because I could see clearer as time went by which way the wind was blowing.

I post here because 1) thought it would help to know my settlement terms - I had a hard time finding out about clso 1 terms - 2) I think there are inherent injustices (people with all years closed pre 2011 would never have settled in clso1 because they didn’t know they had a problem and 3) because I was embroiled in this for 10 years and can’t quite get used to the fact I can put it behind me.

But enough’s enough.