HMRC compliance check letter regarding disguised remuneration scheme

[min123]

The other company were in the UK.

So im not sure what to reply to- the letter or the phone call conversation I had with the guy in HMRC

[DealorNoDeal]

The other company were in the UK.

So im not sure what to reply to- the letter or the phone call conversation I had with the guy in HMRC

You could just respond to the written request about 2018/19 but, now you're on their radar, it's probably only a matter of time before they request details for all years you used the scheme. You should prepare yourself for that.

If there is anything loan-like about the payments you received in 2017/18, HMRC may claim you should have declared them on a 2018/19 tax return and paid the Loan Charge. If I were you, I would find out exactly what those payments were.

[min123]

So the second part payment was an annuity payment - I haven’t got a clue what that is and just like all the other guys who have fallen for this, I was under the impression this was all legal.

So should I just reply to the phone call conversation and send payslips for 2017/2018 and 2018/2019?

[Paralytic]

So should I just reply to the phone call conversation and send payslips for 2017/2018 and 2018/2019?

You should get proper advice from qualified people (not randomers on the internet) before doing anything. I see you've got a call lined up with WTT tomorrow, so certainly wait until you have that.

[min123]

Sure will do and wait to see what WTT advice.

Thanks.

[piebaps]

I haven’t got a clue what that is

Out of all the bits you posted, this is probably the key bit. You were signed up to something you didn't fully understand. It is for this reason that you need some professional advice. The team at WTT should be well versed in this.

Once you understand how it worked then you can look at a strategy to manage it.

Good luck and let us know how you got on (but remember that HMRC and the intermediaries and agents whom peddle this junk all read this forum so don't reveal too much!!).

[min123]

Thank you. Will update you how I proceed.

[DealorNoDeal]

So the second part payment was an annuity payment

On the face of it, that doesn't sound like a loan. In which case it's a plus on two counts, (1) you shouldn't be liable for the Loan Charge for the payments you received in 2017/18 and (2) someone can't come along at a later date, like other scam merchants have, and try and demand you repay the money.

I think your best option may be to settle with HMRC and get a long payment plan (time to pay).

If the scheme provider, or anyone else, suggests fighting HMRC think very carefully. Whilst it might seem tempting to try and avoid having to pay, this could lead to many years of worry and uncertainty hanging over you.

I also fear schemes like this are vulnerable to the GAAR (google it) which could leave users, who don't settle, liable to up to 60% penalties on top of the tax.

[regron]

On the face of it, that doesn't sound like a loan. In which case it's a plus on two counts, (1) you shouldn't be liable for the Loan Charge for the payments you received in 2017/18 and (2) someone can't come along at a later date, like other scam merchants have, and try and demand you repay the money.

I think your best option may be to settle with HMRC and get a long payment plan (time to pay).

If the scheme provider, or anyone else, suggests fighting HMRC think very carefully. Whilst it might seem tempting to try and avoid having to pay, this could lead to many years of worry and uncertainty hanging over you.

I also fear schemes like this are vulnerable to the GAAR (google it) which could leave users, who don't settle, liable to up to 60% penalties on top of the tax.

Mmm... HMRC disagree and say annuity payments ARE subject to the Loan Charge.

Disguised remuneration: tax avoidance using annuities (Spotlight 35) - GOV.UK

[DealorNoDeal]

Mmm... HMRC disagree and say annuity payments ARE subject to the Loan Charge.

Disguised remuneration: tax avoidance using annuities (Spotlight 35) - GOV.UK

Thanks for pointing that out. (Is there anything which isn't subject to the Loan Charge? )

Unfortunately, then, that is something else min123 will have to contend with.