Finance Bill 2017-18 V HMRC DR Settlement Terms

[ConfusedEasily]

When Dave did CLSO1, did he tell HMRC about the 5 closed years?

HMRC was aware of the closed years. However, as the years we closed, they were unable to address them at the time.

For me, my problem is my closed period is so long ago that I have no idea htf HMRC will work it out. They have (apparantly) no info.

[stonehenge]

HMRC was aware of the closed years. However, as the years we closed, they were unable to address them at the time.

HMRC were able to address the closed years in pimpernell's case, so why not in Dave's?

[webberg]

I'd like to make a couple of points.

1. The UK has a self assessment regime for tax. This applies for reporting and for paying tax. It means that the Government expect you to be sufficiently acquainted with the laws of the land so as to make a report to comply with those laws.

It is NOT for the tax agency (HMRC) to contact you personally and advise you of your obligations. A defence of "I wasn't told" to a penalty for non compliance will not work. If you do not report as legally required, you run the risk of a penalty.

2. The announcements in the Technical Papers about years that were "implicitly" included in CLSO 1 (i.e. closed years for 2010/11 and earlier) being exempt from the DR charge in 2019, have not, or at least not clearly, made it into the legislation. It must therefore be the case that HMRC has either made an error and will include an amendment or reneged on their promise. Until we see the final version of the Finance Act, with Royal Assent in place, we will not know.

[ConfusedEasily]

HMRC were able to address the closed years in pimpernell's case, so why not in Dave's?

Because they were closed. When CLSO1 was out - there was no looming 2019 charge and HMRC considered the years closed. There was no need for those years to be addressed.
When pimpernel got his settlement in May this year, the 2019 charge was an obvious worry.

[ConfusedEasily]

I'd like to make a couple of points.

1. The UK has a self assessment regime for tax. This applies for reporting and for paying tax. It means that the Government expect you to be sufficiently acquainted with the laws of the land so as to make a report to comply with those laws.

It is NOT for the tax agency (HMRC) to contact you personally and advise you of your obligations. A defence of "I wasn't told" to a penalty for non compliance will not work. If you do not report as legally required, you run the risk of a penalty.

2. The announcements in the Technical Papers about years that were "implicitly" included in CLSO 1 (i.e. closed years for 2010/11 and earlier) being exempt from the DR charge in 2019, have not, or at least not clearly, made it into the legislation. It must therefore be the case that HMRC has either made an error and will include an amendment or reneged on their promise. Until we see the final version of the Finance Act, with Royal Assent in place, we will not know.

Although it does beg the question, if you were unable to take the benefit of CLSO1, because your years were closed then, you may be treated unfairly against those who did take CLSO1.

This was the reason our advisor postulated that the 2019 charge did not include such an undertaking.

It's all a bit silly.

[webberg]

Although it does beg the question, if you were unable to take the benefit of CLSO1, because your years were closed then, you may be treated unfairly against those who did take CLSO1.

This was the reason our advisor postulated that the 2019 charge did not include such an undertaking.

It's all a bit silly.

Possibly.

You'll find however that unless a special clause has been inserted into CLSO 1, there is no protection against amounts being subject to tax as a result of future (i.e. post contract date) legislation.

My guess is that HMRC is reviewing ALL CLSO 1 agreements in order to see what might become due and payable as a result of the DR charge.

[stonehenge]

Because they were closed. When CLSO1 was out - there was no looming 2019 charge and HMRC considered the years closed. There was no need for those years to be addressed.
When pimpernel got his settlement in May this year, the 2019 charge was an obvious worry.

If I was Dave, I'd take this up with my Member of Parliament.

It would not be right if people who declared all their loans to HMRC, as part of CLSO1, now get hit by the loan charge.

[luxCon]

2. The announcements in the Technical Papers about years that were "implicitly" included in CLSO 1 (i.e. closed years for 2010/11 and earlier) being exempt from the DR charge in 2019, have not, or at least not clearly, made it into the legislation. It must therefore be the case that HMRC has either made an error and will include an amendment or reneged on their promise. Until we see the final version of the Finance Act, with Royal Assent in place, we will not know.

webberb, for clarity ; in this paragraph are you referring to those individuals who have settled a year under CLSO 1 and if the Fin Act is explicitly including or excluding them from the DR?

[BrownOwl]

If I was Dave, I'd take this up with my Member of Parliament.

It would not be right if people who declared all their loans to HMRC, as part of CLSO1, now get hit by the loan charge.

Unfortunately what's right and wrong doesn't come into it. HMRC just want maximum tax intake for their masters in Parliament. Parliament will put the legislation in place for them to get the money, if required.

The new settlement opportunity lets you to voluntarily pay some money for unprotected years. Is that money actually tax? HMRC could introduce future retrospective rules and tax you on those unprotected years because you haven't actually paid any tax, just a voluntary payment.

Settlement opportunities appear to be a way to get you to admit liability and then tax you in the future if HMRC so choose.

There's only one winner in this game of chess.

[ConfusedEasily]

Unfortunately what's right and wrong doesn't come into it. HMRC just want maximum tax intake for their masters in Parliament. Parliament will put the legislation in place for them to get the money, if required.

The new settlement opportunity lets you to voluntarily pay some money for unprotected years. Is that money actually tax? HMRC could introduce future retrospective rules and tax you on those unprotected years because you haven't actually paid any tax, just a voluntary payment.

Settlement opportunities appear to be a way to get you to admit liability and then tax you in the future if HMRC so choose.

There's only one winner in this game of chess.

CLSO1 dealt with open years. The law has changed. HMRC have targets to fulfill for their lords and masters and targets to terrorise - you.

Nothing here is fair.