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[lowpaidworker]

I've queried the back interest as the amounts due to the length of time are extortionate. Apparently the backdated interest charges according to the person I spoke to are at the will of the Chancellor. Anyone know if this is true ? If so then surely he should be considering removing those for settlement.

[webberg]

I've queried the back interest as the amounts due to the length of time are extortionate. Apparently the backdated interest charges according to the person I spoke to are at the will of the Chancellor. Anyone know if this is true ? If so then surely he should be considering removing those for settlement.

Interest on overdue tax is applied by statute.

Never heard of "will of the Chancellor" and suggest that whomever you spoke with is perhaps indulging in some semantics.

To overcome statute you need amending statute or some form of legal action.

Usually HMRC's discretion that they have to "manage" the tax system would not extend to denying statute.

However, we see in the latest "settlement", HMRC doing precisely that by claiming that a loan write off within x days will mean that there is no further tax charge.

When pressed however about interest accruing because of long delays between charge and end of enquiry/settlement, the claim is that they cannot alter the law.

Clearly HMRC can and does alter/ignore the law when it suits them and claims it cannot do that when it means they can collect more money.

Go figure.

[lowpaidworker]

Interest on overdue tax is applied by statute.

Never heard of "will of the Chancellor" and suggest that whomever you spoke with is perhaps indulging in some semantics.

To overcome statute you need amending statute or some form of legal action.

Usually HMRC's discretion that they have to "manage" the tax system would not extend to denying statute.

However, we see in the latest "settlement", HMRC doing precisely that by claiming that a loan write off within x days will mean that there is no further tax charge.

When pressed however about interest accruing because of long delays between charge and end of enquiry/settlement, the claim is that they cannot alter the law.

Clearly HMRC can and does alter/ignore the law when it suits them and claims it cannot do that when it means they can collect more money.

Go figure.

could not agree more.

I think its grossly unfair if like me most just had a SA discovery and then heard nothing back after sending the additional information they requested to find they have added 3-5 years worth of back dated interest. How does that work out ?

[webberg]

could not agree more.

I think its grossly unfair if like me most just had a SA discovery and then heard nothing back after sending the additional information they requested to find they have added 3-5 years worth of back dated interest. How does that work out ?

The theory is that once you had the discovery assessment, you had the right to demand that HMRC close their enquiry. If they would not - and they clearly would not - then you had the ability to go to a Tribunal and have that body force HMRC to conclude their enquiries. Usually the Tribunal would give HMRC a time limit to conclude and issue a closure notice.

If that conclusion was that HMRC want you to pay more tax, then you can go to the Tribunal to argue the position.

Aside from the diary of the Tribunal and the time they have available, you - if you chose - were as much in charge of the time scale as HMRC.

Because, in theory, the rights and obligations of the parties are balanced, a claim that HMRC has caused a 3-5 year delay, when it is within your gift to have brought a conclusion, will carry no weight in a debate about whether the interest should be charged or not.

[ToHaLe]

Interest start?

Thank you for above discussion.

A different question now.

When does interest start accruing, if discovery is made years after disputed tax year?

Take this extreme example:
Loans in year 2011-2012.
No prior SA was completed.
Scheme user declared on 2018-2019 SA in sept 2020.
HMRC first ever opened an inquiry on that year say in Jan 2021.
User all prepared to settle the year with HMRC and say pay backdated tax with their SA done for 2020-2021, submitted by jan 2022.

Ignore for now any LoanCharge.
Let's simply assume that the year is opened after many years there was a usage of scheme and tax payer will fully settle.

What will be the interest on tax?

Does it start on 2012,
Or
Does interest start when hmrc actually discovered in 2021?

[lowpaidworker]

The theory is that once you had the discovery assessment, you had the right to demand that HMRC close their enquiry. If they would not - and they clearly would not - then you had the ability to go to a Tribunal and have that body force HMRC to conclude their enquiries. Usually the Tribunal would give HMRC a time limit to conclude and issue a closure notice.

If that conclusion was that HMRC want you to pay more tax, then you can go to the Tribunal to argue the position.

Aside from the diary of the Tribunal and the time they have available, you - if you chose - were as much in charge of the time scale as HMRC.

Because, in theory, the rights and obligations of the parties are balanced, a claim that HMRC has caused a 3-5 year delay, when it is within your gift to have brought a conclusion, will carry no weight in a debate about whether the interest should be charged or not.

so basically when everyone got these discovery assessments they needed to request for them to be closed … I've got one and I cannot see any of this stated in the letter other than this comment

Title - What if you think we should stop this check?
If you think we should stop this check, please tell us why. If we do not agree, you may in some cases be able to ask the independent tribunal that deals with tax matters to decide whether we should stop the check

I hardly call that being advised I can appeal the assessment.

[webberg]

Thank you for above discussion.

When does interest start accruing, if discovery is made years after disputed tax year?

Take this extreme example:
Loans in year 2011-2012.
No prior SA was completed.
Scheme user declared on 2018-2019 SA in sept 2020.
HMRC first ever opened an inquiry on that year say in Jan 2021.
User all prepared to settle the year with HMRC and say pay backdated tax with their SA done for 2020-2021, submitted by jan 2022.

What will be the interest on tax?

Does it start on 2012,
Or
Does interest start when hmrc actually discovered in 2021?

Your example is so extreme as to be illegal.

A loan in 2011/12 needs to have a a discovery assessment raised before 5th April 2016. (Perhaps 5th April 2018 in some instances).

The due date of the tax is 31st January 2013.

SALF305 - Self Assessment: the legal framework - HMRC internal manual - GOV.UK

This is also the date the interest starts.

[webberg]

so basically when everyone got these discovery assessments they needed to request for them to be closed … I've got one and I cannot see any of this stated in the letter other than this comment

Title - What if you think we should stop this check?
If you think we should stop this check, please tell us why. If we do not agree, you may in some cases be able to ask the independent tribunal that deals with tax matters to decide whether we should stop the check

I hardly call that being advised I can appeal the assessment.

Why do you think that HMRC is obliged to advise you?

HMRC is not your agent. Their role is to extract maximum tax from you.

Tax law is public property. It is available to you and HMRC in equal measure. Any agent doing even half a decent job would and could have advised you of your position.

[lowpaidworker]

Why do you think that HMRC is obliged to advise you?

HMRC is not your agent. Their role is to extract maximum tax from you.

Tax law is public property. It is available to you and HMRC in equal measure. Any agent doing even half a decent job would and could have advised you of your position.

had a feeling you would say that.

There is further text title What happens next saying they will write to me and let me know their outcome however they didn't, until two weeks ago. So took them a good five years plus but I guess once they have opened the enquiry they can take as long as they like if I don't ask them to close it.

[webberg]

had a feeling you would say that.

There is further text title What happens next saying they will write to me and let me know their outcome however they didn't, until two weeks ago. So took them a good five years plus but I guess once they have opened the enquiry they can take as long as they like if I don't ask them to close it.

You are correct.

You have as much control over the process as HMRC.

One of the sibboleths that HMRC rely upon is that they are seen as the last word on all matter to do with tax.

They reinforce this with - for want of a better word - gaming the system to make out that they have more power than they actually have.

It used to be the case that this was reinforced because they were respected (if not liked) Civil Servants doing a job but were basically fair.

From around the time that Customs joined the Inland revenue, they decided to replace respect with fear and became hated foes of all people who just wished to be treated fairly.

A decent organisation turned into an oppressive one, just for money.

Sad.

Worse, many decent people in HMRC allowed this to happen. Many, many decent people in HMRC left them rather than see an organisation they loved turn into the monster it is.

They are now left with unthinking but obeying robots, bereft of compassion and empathy.