LC, APN - despair ?

[webberg]

If there are any financial risks, these need to be pointed out.

For example, does fighting the LC risk penalties?
Could more interest be racked up while the fight goes on?

Agreed - I could, perhaps should have mentioned them.

1. "Risks" - yes. How much risk? hard to say. Normally penalties are based on inaccurate returns and not the fact that you have defended a reasonable case. If the risk is the inaccurate return, then that has already happened.

2. Interest continues to run on outstanding liability presently at 3.25% per annum, simple. So a litigation lasting 3 years will potentially rack up another 9.75% (of the tax) as a liability.

[divine-elle]

In all cases would like to avoid bankruptcy

[stonehenge]

1. "Risks" - yes. How much risk? hard to say. Normally penalties are based on inaccurate returns and not the fact that you have defended a reasonable case. If the risk is the inaccurate return, then that has already happened.

I was thinking more of the case of someone who doesn't pay the LC and fights it.

Presumably the advice is to pay it if you can, either as a lump sum or TTP?

[stonehenge]

Thank you so much for taking the time out to reply
I'll contact AML / SPM and ask for the information

In terms of Vanquish - should i put a stop to them contacting HMRC with the loan repayment info (assuming that what they have told me is correct and nothing has been set to HMRC yet)?

I've been mulling over this.

Is it worth a punt? (Especially, as you've already paid the fee for it.)

I guess you'd need to know what the worse case scenario is, penalties wise, if it backfires. Unfortunately, I don't know the answer to that.

[webberg]

I was thinking more of the case of someone who doesn't pay the LC and fights it.

Presumably the advice is to pay it if you can, either as a lump sum or TTP?

Apologies if I misunderstood.

If the loan charge does fall due, the best scenario is to have it subjected to an assessment rather than a self assessment "statement".

Simplifying the legislation here, a SA statement cannot be appealed. Assessments can be appealed.

If there is an assessment and it's appealed the tax can be postponed (or postponement can be requested) until the substance of the charge is agreed. That would be perhaps after a Tribunal sequence.

Once that is over, the liability becomes due (or not). If it is due, then HMRC will almost certainly try to claim a late payment surcharge but again I think this can be resisted on the grounds that the due date is actually 30 days from the postponement being removed.

I would NOT recommend incurring the loan charge and not paying it. That would bring the full power of Debt Management into operation and the ability to resist their tender mercies is limited.

[webberg]

I've been mulling over this.

Is it worth a punt? (Especially, as you've already paid the fee for it.)

I guess you'd need to know what the worse case scenario is, penalties wise, if it backfires. Unfortunately, I don't know the answer to that.

If - and it's a big if - Vanquish and/or another party are obliged to report the loan balances, asking them not to is probably ineffective.

[stonehenge]

If - and it's a big if - Vanquish and/or another party are obliged to report the loan balances, asking them not to is probably ineffective.

I think you may have got the wrong end of the stick.

PTS estimated the LC to be around 300k so i hastily/ stupidly used vanquish and I’m now distressed about the route taken and don’t fully understand the implications . From my understanding vanquish will inform hmrc there are no outstanding loans, I’m freaked out about the consequences. Can anyone shed light on this and should i tell vanquish not to submit a thing and write off what I’ve paid them?

The question is, if Vanquish report no outstanding loans, what's the worst case scenario if it goes Pete Tong?

[divine-elle]

I think you may have got the wrong end of the stick.



The question is, if Vanquish report no outstanding loans, what's the worst case scenario if it goes Pete Tong?

Yes, this is freaking me out - I've emailed vanquish again as the initial response is that they are confident it's all above board - I heard that from AML et al for years and look where it got me!

[stonehenge]

Yes, this is freaking me out - I've emailed vanquish again as the initial response is that they are confident it's all above board - I heard that from AML et al for years and look where it got me!

You're right to be wary. But, given you've already paid the fees, it's worth thinking carefully before abandoning it and writing off the money. The thing to find out is what's the worst case scenario, then you know where you stand.

HMRC are not going to like this Vanquish thing one bit. If they defeat it, they'll almost certainly impose penalties for not reporting correct loan balances and for not declaring the loans in the 2018/19 self-assessment.

It's the quantum of those potential penalties which is key to making an informed decision.

[webberg]

Worst case?

HMRC claim that the arrangement does not do what it says on the tin and that the original loan remains reportable (and has not been).

Further the replacement loan does not meet the alleged criteria and is also reportable (and has not been).

Further, the arrangement is a linked tax avoidance mechanism which is reportable (and has not been) and may also have been disclosable for DOTAS - by the user given the offshore connection - and has not been.

All of those carry penalties.

I confess that whilst we have the materials that Vanquish and connections made available to some clients who expressed an interest, we have not delved deep into the inner workings and technical claims because standing back and looking at the whole, we became very uneasy. In short the risk of a GAAR applying seemed to us to be sufficiently high so as to prevent us recommending use of the scheme by our clients, even with caveats.