Any settlement figures yet?

[webberg]

Hi

First post today so I got my tax bill 98k in loans 38k tax bill and 3k interest from tax years 13 to 16.
I was a contractor thru AML 2013 to 2015 and smartpay 2015/16 I cannot pay it up front even over 10 years it’s going to be difficult as I don’t earn that type of money any more.
Just want to know is there someone who can check this as it seems a lot of money.
If you take the AML tax 14/15 income on which tax due £53000 they want £19000 is this even in the Park.

Let's assume you have the years:

2013/14
2014/15
2015/16

And that the loans were spread evenly so £32,600 a year.

Let's also assume that you had a salary that took out your personal allowances.

If that is true, then bill should be roughly £20,000 plus interest.

Therefore the allocation of loans must be such that some years you were into the 40% band or that you had significant other income.

It's arithmetic though. You should be able to do this.

If you need it checked, we will do it for you but we will charge a fee. (Other advisers are available).

How much?

Just a basic check and a simple - correct or not, perhaps £300.

If you wanted us to help with Time To Pay - and bear in mind that if you earn less than £50k a year, then a 5 year window is your starting point - perhaps add the same again.

[webberg]

I intend to, but obviously I was interested to know on what basis you made your statement? If you could elaborate a bit, that'd be much appreciated.

Because I speak with insolvency people and HMRC.

[webberg]

I received my settlement figures back last week.

As I didn't have accurate figures (2006/7) to send them so I sent best guess estimates, by email before the September deadline. I have not had to fill the much talked about Spreadsheet or had any other communication with them.

The letter mentions that they have accepted my loan estimates, so I guess they don't have the figures either, but were in line with Salary * (4.75).

With the documentation they sent:

• A letter explaining their decision, including that they have deemed NO IHT
• A full calc of my 2006/7 Tax return and Revised calcs inclusive of loan as income on the same page
• A separate breakdown of interest charged.
• A acceptance letter with extra pages for payment by installments

I have a month to accept the settlement

As I intend to pay in full, should I accept and deal with the matter myself or are there any advantages to using Phil or Graham

Sounds straightforward to me, so I suggest that you are coping perfectly well on your own and you can save yourself a few hundred quid by carrying on like that.

[webberg]

CowBoy - I would chat to Graham or Phil at least. There is a real chance that CLOSED (Unprotected) may be removed from the Loan Charge 2019. This could potentially save you a fortune.

I've said below that the poster seems to be coping on his/her own.

For the sake of the record, I have no view - positive or negative - on whether the loan charge may be amended as suggested.

I am dealing with the law as it stands and not as it might or might not be.

[webberg]

...but as suggested to in other thread not settling may mean you can't get loans written off and achieve closure. So ups and downs.

That is not correct.

You can settle with HMRC and have loans written off if the lender agrees.

You can settle with HMRC and NOT have loans written off.

You can NOT settle with HMRC but have the loans written off if the lender agrees.

This last route WILL be a taxable event in its own right.

[webberg]

But I though they stated that they might "PUT A CHARGE ON YOUR PROPERTY", that's not great

From: citizensadvice.org.uk
A charging order secures the debt against your home or other property you own. This makes the debt very serious. It means that you could lose your home if you don't pay back what you owe. Once a charging order has been made, your creditor can apply to the court for another order to force you to sell your home.

@Joolsey The Loan charge may apply BUT the enquiry is still remains open. My settlement figure is new family car money so I want closure even if Loan Charge does not apply.

A charge on your property is not forcing you to sell. It's an order to the solicitor or other party dealing with the money from a sale of the property - when you choose to sell it - that HMRC has a first claim on a portion.

You are correct that it's not good news because to get that charge, HMRC must apply for and be granted a County Court Judgement - CCJ - and that appears on your credit record.

You need to discuss with an insolvency specialist but anecdotally our experience has been that where a reasonable offer has been made to HMRC and a Judge can see that there is little to be gained by imposing a charge, then either HMRC don't take the case to County Court or a Judge refuses the order.

Like I say - anecdotal.

We did hear HMRC make their statement on houses yesterday and it was tweeted by TSC today. I hope this is not another example of mealy mouthed, limited, conditional promises from HMRC who subsequently hide behind semantic wording.

[piebaps]

There's another effect too Graham. If you are selling a property on which such a charge is secured, the charge will appear on searches undertaken by prospective buyers. This can result in attempts to drive down the price as the buyer senses a "fire sale". While the charge is HMRC's security on their debt it can turn into a millstone for someone who is genuinely trying to sell a property as it can delay sales. Best avoided if you can, although no real harm if there's no intention to sell.

[webberg]

There's another effect too Graham. If you are selling a property on which such a charge is secured, the charge will appear on searches undertaken by prospective buyers. This can result in attempts to drive down the price as the buyer senses a "fire sale". While the charge is HMRC's security on their debt it can turn into a millstone for someone who is genuinely trying to sell a property as it can delay sales. Best avoided if you can, although no real harm if there's no intention to sell.

Agreed.

It's also the case that if you want to work in financial services a CCJ is not good.

HMRC know all this and use it to apply pressure.

[DavidD]

Just to share knowledge – I just received my wife’s settlement figures (we were both on the K2 scheme and its successors.)

The payment terms given by HMRC are exactly as proposed by us in my wife’ settlement pack, it essentially equates to 8 years to pay the money demanded (which includes past interest) with a 3.5% future interest rate which generates ~£2k in total forward interest. An APN already paid is subtracted from the amount. Unusually for HMRC all the calculations etc. look to be correct – though I will be going through them as soon as I get a chance.

In my own settlement pack I have offered terms that HMRC are far more likely to reject (i have no choice as my loans are ‘hefty’) my proposal would equate to nearly 20 years of payments…..

I will let people know what they say when my offer comes in.

D.

PS – My trust wants £900 to write off the loans…

[Ltdoptions]

Ok so they made a commitment to the TSC about not forcing house sales (although they'll claim the equity anyway), but as I think WTT commented elsewhere, that promise can be by-passed if they push for insolvency.

Mary Aiston seemed to say that insolvency would only be sought if a) there was an existing tax debt (presumably she meant non-LC related) or b) there was no willingness shown to settle.....so basically, if you can't / won't settle, then they reserve the right to bankrupt you & take your house. Presumably that's why they brought back preferential creditor status.

A fair reading of the situation?