• Visitors can check out the Forum FAQ by clicking this link. You have to register before you can post: click the REGISTER link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below. View our Forum Privacy Policy.
  • Want to receive the latest contracting news and advice straight to your inbox? Sign up to the ContractorUK newsletter here. Every sign up will also be entered into a draw to WIN £100 Amazon vouchers!

Just received my settlement pack

Collapse
X
  •  
  • Filter
  • Time
  • Show
Clear All
new posts

    Just received my settlement pack

    Precursor: I phoned up the HMRC helpline for answers but she couldn't give me any help as she didn't know.

    Some things that stand out on my pack:

    They've calculated in interested for income tax (understand that) but then they've added something called Forward Tax. My wife had only messaged me the front two pages so I don't know if it goes into detail explaining what it is but they don't on the front two pages and the lady on the phone didn't know either. If I was to guess I'd have guessed it is to cover interest for the period of the installments they've suggested.

    Also, they mention 'not letting them if I intend to release the loans' and 'if I intend to release the loans to let them know immediately' without explaining why.

    #2
    Originally posted by Doggysoft View Post
    Precursor: I phoned up the HMRC helpline for answers but she couldn't give me any help as she didn't know.

    Some things that stand out on my pack:

    They've calculated in interested for income tax (understand that) but then they've added something called Forward Tax. My wife had only messaged me the front two pages so I don't know if it goes into detail explaining what it is but they don't on the front two pages and the lady on the phone didn't know either. If I was to guess I'd have guessed it is to cover interest for the period of the installments they've suggested.

    Also, they mention 'not letting them if I intend to release the loans' and 'if I intend to release the loans to let them know immediately' without explaining why.
    Forward tax should only apply to the tax on TTP arrangements. Late payment tax is currently 3.25% - TTP adds 1% to this for the period of the TTP.

    Comment


      #3
      Originally posted by Delendog View Post
      Forward tax should only apply to the tax on TTP arrangements. Late payment tax is currently 3.25% - TTP adds 1% to this for the period of the TTP.
      Apologies for basic questions are I'm ignorant but what would count as 'late'? Late because it's after 5th April of late because I didn't pay it when it was earned ie back in 2015?

      Comment


        #4
        Originally posted by Doggysoft View Post
        Apologies for basic questions are I'm ignorant but what would count as 'late'? Late because it's after 5th April of late because I didn't pay it when it was earned ie back in 2015?
        the late payment interest is applied for settlement to open years from the tax year until the settlement date. Then if you need TTP it is applied for the future period of the TTP (+1% forward interest) - but then also includes open and closed years.

        Comment


          #5
          I've never heard of forward tax.

          I suspect that this is interest calculated at 4.25% on unpaid instalments from the date of settlement to date of payment.
          Best Forum Adviser & Forum Personality of the Year 2018.

          (No, me neither).

          Comment


            #6
            Originally posted by webberg View Post
            I've never heard of forward tax.

            I suspect that this is interest calculated at 4.25% on unpaid instalments from the date of settlement to date of payment.
            Graham I am surprised you have not heard of forward tax, suggest you ask Tom to tell you. It is in HMRC manual and is an additional 1% applied to settlement TTP to cover as HMRC say "additional risk".

            Comment


              #7
              Just received my settlement pack

              Maybe your terminology is what’s confused him[emoji6]

              As Webberg said the TTP interest is actually 4.25% of the amount agreed to settle over the agreed time( not 1%). That is separate to the 3.25 % they would have already added to previous open years from each respective tax year due date.
              Last edited by Iter; 9 April 2019, 13:50.

              Comment


                #8
                Originally posted by Iter View Post
                Maybe your terminology is what’s confused him[emoji6]

                As Webberg said the TTP interest is actually 4.25% of the amount agreed to settle over the agreed time( not 1%). That is separate to the 3.25 % they would have already added to previous open years from each respective tax year due date.
                TTP interest is the current 3.25% late payment interest + the 1% forward interest = 4.25% total.

                Comment


                  #9
                  Are you sure?

                  Comment


                    #10
                    Originally posted by Iter View Post
                    Are you sure?
                    EM6250 - Enquiry Manual - HMRC internal manual - GOV.UK

                    Comment

                    Working...
                    X