Latest Settlement Offer

[ToHaLe]

Thanks, Webberg,
But you left me now with some confusion.

The scenario is real:
A loan scheme was used in 2012 and there was no SA done for the year, and an inquiry by HMRC never raised to date.

Then, we have nowadays the loan charge voted into law.

What would have been the options for the above case?

If the individual were to choose now, to disclose nothing about 2012 (which is covered by the LC law) on their 2018-2019 assessment, then where is now the illegality?

Individual breaks law because they didn't declare,
AND
At same time HMRC also illegal to do a discovery now as beyond 6y?

What actually applies?

[webberg]

Thanks, Webberg,
But you left me now with some confusion.

The scenario is real:
A loan scheme was used in 2012 and there was no SA done for the year, and an inquiry by HMRC never raised to date.

Then, we have nowadays the loan charge voted into law.

You have mixed apples and oranges.

The income tax liability for 2011/12 is based on the Rangers decision (or so HMRC claim) and if they wish to raise a charge, they have to operate within time limits. In effect if HMRC has not issued a discovery assessment before 5th April 2016, then this route is closed to them.

The loan charge is an ENTIRELY DIFFERENT tax.

It arises ONLY if there are outstanding loans as at 5th April 2019 and adds the value of such loans to the 2018/19 other income. (You also have the option to spread this over three years, evenly, 18/19, 19/20 and 20/21).

The loan charge is NOT however seeking to tax you in 2011/12.

HMRC's only chance of getting some money from you in this situation is via the loan charge. Defeat that and you have no more tax to pay.

How to defeat that?

I'm sure that each adviser has their own ideas and you should shop around and ask questions.

[ToHaLe]

I am really curious how the loan charge will pan out for scheme users with a mix of open and closed years, say all between 2010-2014, therefore more than 6y ago, and were discoveries never raised on the closed.

Another scenario:
A. Say user declared loans on open year 2014.
B. 2013 and earlier no open inquiry ever made by hmrc.
C. Hmrc now, connects dots in 2020 and see that user was with same scheme as the open year in 2014.
D. Hmrc issue a loan charge demand in 2020 extrapolating to the earlier than 2014 years, say all 4 in the example.

How can hmrc really do this, given the years were never opened, and its all based on their best guesswork?

And secondly:

Assume there is a dispute, and matter were to be taken to tribunal. Who has the responsibility to prove what here?

User is guilty and has to prove not for a period never opened prior to more 6y?

Or user innocent and hmrc have to prove they lost tax?

Assuming answer is for the latter,
Then why would any such user have to comply with any post 6y discovery if hmrc or even tribunal requires?

This relates to the post of another user in another topic, where the user seems to have declared loans on one year, but hmrc seem to be chasing a figure projection on 2-3 more.

What if indeed those 2-3 more years are actually not opened and cannot be opened under the 6y limit?

[NeedTheSunshine]

I am really curious how the loan charge will pan out for scheme users with a mix of open and closed years, say all between 2010-2014, therefore more than 6y ago, and were discoveries never raised on the closed.

Another scenario:
A. Say user declared loans on open year 2014.
B. 2013 and earlier no open inquiry ever made by hmrc.
C. Hmrc now, connects dots in 2020 and see that user was with same scheme as the open year in 2014.
D. Hmrc issue a loan charge demand in 2020 extrapolating to the earlier than 2014 years, say all 4 in the example.

How can hmrc really do this, given the years were never opened, and its all based on their best guesswork?

And secondly:

Assume there is a dispute, and matter were to be taken to tribunal. Who has the responsibility to prove what here?

User is guilty and has to prove not for a period never opened prior to more 6y?

Or user innocent and hmrc have to prove they lost tax?

Assuming answer is for the latter,
Then why would any such user have to comply with any post 6y discovery if hmrc or even tribunal requires?

This relates to the post of another user in another topic, where the user seems to have declared loans on one year, but hmrc seem to be chasing a figure projection on 2-3 more.

What if indeed those 2-3 more years are actually not opened and cannot be opened under the 6y limit?

Loan Charge doesn't depend on open years post 2010. It depends on outstanding loans.

[ToHaLe]

Loan Charge doesn't depend on open years post 2010. It depends on outstanding loans.

Kindly don't take this as resistance, it is really for the pursue of total clarity.

Let us for arguments sake, and once and for all comment on this theoretical scenario.

Loans are declared for one year only (whatever the user's specific reason).

Hmrc comes back, say with a 3x that figure because either they projected in error, or think they have knowledge or even evidence.

Who has the burden to really provide the evidence?

Hmrc who made the claim?
Or the user?

What's stopping hmrc from claiming any extrapolated figure if they did not have to provide the evidence?

And lastly, yes, I am still asking if the 6y rule has any bearing on who between user and hmrc has to defend their position.

For all intends and purposes, not all people have had open inquiries for all of their years. They may declare as per they wish/ or how they are advised etc etc.

The ultimate question is this:
User gives a figure
Hmrc think its a different figure (higher)

Who defends what, and again consider all period strictly after 2010 but prior to 2014 where there is this 6y rule (if applicable in whatever context it may be).

[NeedTheSunshine]

Kindly don't take this as resistance, it is really for the pursue of total clarity.

Let us for arguments sake, and once and for all comment on this theoretical scenario.

Loans are declared for one year only (whatever the user's specific reason).

Hmrc comes back, say with a 3x that figure because either they projected in error, or think they have knowledge or even evidence.

Who has the burden to really provide the evidence?

Hmrc who made the claim?
Or the user?

What's stopping hmrc from claiming any extrapolated figure if they did not have to provide the evidence?

And lastly, yes, I am still asking if the 6y rule has any bearing on who between user and hmrc has to defend their position.

For all intends and purposes, not all people have had open inquiries for all of their years. They may declare as per they wish/ or how they are advised etc etc.

The ultimate question is this:
User gives a figure
Hmrc think its a different figure (higher)

Who defends what, and again consider all period strictly after 2010 but prior to 2014 where there is this 6y rule (if applicable in whatever context it may be).

I don't take your comment as resistance, more burying your head in the sand. We all do that initially.

For years post 2010, as I said, the 6 year discovery rule doesn't apply to the loan charge. Nor does the 1 year enquiry rule. It comes down to outstanding loans, relevant steps, etc. All the info is out there and fairly clear. Also have a look through the threads on this area of the forum. And with HMRC, you can be 100% sure that the onus is on you to prove that their figures are incorrect. That's just the way it is. I am not a tax advisor.

For clarity do contact a tax advisor.

[regron]

Kindly don't take this as resistance, it is really for the pursue of total clarity.

Let us for arguments sake, and once and for all comment on this theoretical scenario.

Loans are declared for one year only (whatever the user's specific reason).

Hmrc comes back, say with a 3x that figure because either they projected in error, or think they have knowledge or even evidence.

Who has the burden to really provide the evidence?

Hmrc who made the claim?
Or the user?

What's stopping hmrc from claiming any extrapolated figure if they did not have to provide the evidence?

And lastly, yes, I am still asking if the 6y rule has any bearing on who between user and hmrc has to defend their position.

For all intends and purposes, not all people have had open inquiries for all of their years. They may declare as per they wish/ or how they are advised etc etc.

The ultimate question is this:
User gives a figure
Hmrc think its a different figure (higher)

Who defends what, and again consider all period strictly after 2010 but prior to 2014 where there is this 6y rule (if applicable in whatever context it may be).

Bearing in mind you had an obligation to declare your loans to HMRC by October 2019 (if memory serves me right) and by law, you have to declare ALL loans by the end of September this year on your self assessment. The onus fully falls on yourself to report all figures correctly. Also bear in mind that providers (certainly AML post 2010) provided HMRC with the amount of loans that were paid !! You will be asked by HMRC to disprove their figures, not the other way around.
Not saying you are, but anybody thinking of part declaring, or producing lower figures than actually received, then be very, very careful !!!

[webberg]

I am really curious how the loan charge will pan out for scheme users with a mix of open and closed years, say all between 2010-2014, therefore more than 6y ago, and were discoveries never raised on the closed.

Another scenario:
A. Say user declared loans on open year 2014.
B. 2013 and earlier no open inquiry ever made by hmrc.
C. Hmrc now, connects dots in 2020 and see that user was with same scheme as the open year in 2014.
D. Hmrc issue a loan charge demand in 2020 extrapolating to the earlier than 2014 years, say all 4 in the example. No. You are OBLIGED to disclose all loans within scope of the charge. There is no "extrapolation" because you need to tell HMRC the values to the best of your ability.

How can hmrc really do this, given the years were never opened, and its all based on their best guesswork? Not their guesswork - see above.

And secondly:

Assume there is a dispute, and matter were to be taken to tribunal. Who has the responsibility to prove what here?

User is guilty and has to prove not for a period never opened prior to more 6y?

Or user innocent and hmrc have to prove they lost tax?

Assuming answer is for the latter,
Then why would any such user have to comply with any post 6y discovery if hmrc or even tribunal requires?

This relates to the post of another user in another topic, where the user seems to have declared loans on one year, but hmrc seem to be chasing a figure projection on 2-3 more.

What if indeed those 2-3 more years are actually not opened and cannot be opened under the 6y limit?

If there is a dispute, it is a dispute over the amount of charge, not the fact of the charge.

A dispute over whether the charge should be made is one for Judicial Review. To date these challenges have lost but I suspect that we will hear more on that.

So HMRC raise a charge and you say "wrong". YOUR appeal goes to Tribunal and YOU have to prove why the charge is wrong.

[Forsythia]

Further settlement terms?

So back in May I received a pack from HMRC outlining all my loans and giving me a settlement figure and a form to sign that I agreed. So I confirmed I wanted to settle all years and duly sent the form back. I have now received a settlement offer from them which only expects me to settle years that fall under the loan charge but weirdly includes all IHT from all years. It would suit me to settle just these years now to escape the loan charge and give me time to find more money to settle pre-loan charge years but I am worried that a later settlement offer will be punitive. I am wondering that if I don't settle all years by September 30 I will lose the right to settle under the 2017 terms.

Anyone got any idea what the next terms of the settlement offer might be?

[lowpaidworker]

Does anyone know if the below statement is true??

Althought Tax and NI is deducted by the employer and paid through PAYE the Tax Payer still remains responsible for ensuring that the employer is paying the correct payments on their behalf. We cannot comment on individual employers nor can we get involved with contacting them as unfortunately the responsibility to ensure tax is correct is ultimtely the customers.