HMRC nudge letter - "Your use of tax avoidance arrangements - an update "

[Fred Bloggs]

Fred Bloggs , thanks for the response. Yep that was kinda where my head was. Is there any recommendations of such profession help, or should I just seek help from my current accountants. I'm assuming there must me people that specialise in this kind of thing?

Please refer to DealorNoDeal's response, I agree with it.

Take a look around here for suggested advisers in this space. It would be worth calling one to see how the land lies, it was always the case that the initial call was with no charge or obligation to continue engaging them. I don't know if that's still the case. Only one way to find out is to call and ask.

I think you're probably better off settling rather than going into a dispute. There's only going to be two winners there. The adviser and Hector.

If you need help settling, your accountant can help you, most likely. You may wish to request a payment plan as suggested depending on your finances.

[Fred Bloggs]

You only have two choices:
(1) appeal and fight against it
(2) settle

You can do (2) yourself or use your current accountant. If you can't afford to pay in one go, ask HMRC for a payment plan (time to pay).

Personally I'd forget about (1). I don't know of anyone using a contractor avoidance scheme in the past 20 years who has successfully fought HMRC. The odds are stacked massively against you, and litigation is horrendously expensive.

+1. I agree.

[DealorNoDeal]

Fred Bloggs , thanks for the response. Yep that was kinda where my head was. Is there any recommendations of such profession help, or should I just seek help from my current accountants. I'm assuming there must me people that specialise in this kind of thing?

You only have two choices:
(1) appeal and fight against it
(2) settle

You can do (2) yourself or use your current accountant. If you can't afford to pay in one go, ask HMRC for a payment plan (time to pay).

Personally I'd forget about (1). I don't know of anyone using a contractor avoidance scheme in the past 20 years who has successfully fought HMRC. The odds are stacked massively against you, and litigation is horrendously expensive.

[DealorNoDeal]

I got one of these nudge letters a few weeks back, not knowing what it was to do with I contacted HMRC, they have come back and said it was related to "Actinium Dividend" during the period 2005 - 2007. In this period I contracted through Actinium, a management company that I became an employee of. Their structure saw income split with a proportion being paid as salary to the contractor and the remainder invested into a company in which the contractor was a share holder and received dividends. This was my first contract and it didn't seem sus to me at the time, not so sure now, despite all the assurances this was an HMRC approved solution

Any one else in this situation? If so how are you planning to proceed?

That's the second mention of that scheme here in the past couple of weeks, and I bet it's not a random coincidence.

I would brace yourself for something unpleasant on the horizon.

Another thing that may not be a coincidence is the timing. It sounds like HMRC have sat on this scheme for well over a decade, so why are they resurrecting their investigation now? They only thing I can think of is the appeal court ruling in Hoey last month. Maybe ns1 above was right and this is a Hoey based attack.

[BlueSquid]

Fred Bloggs , thanks for the response. Yep that was kinda where my head was. Is there any recommendations of such profession help, or should I just seek help from my current accountants. I'm assuming there must me people that specialise in this kind of thing?

[Fred Bloggs]

I got one of these nudge letters a few weeks back, not knowing what it was to do with I contacted HMRC, they have come back and said it was related to "Actinium Dividend" during the period 2005 - 2007. In this period I contracted through Actinium, a management company that I became an employee of. Their structure saw income split with a proportion being paid as salary to the contractor and the remainder invested into a company in which the contractor was a share holder and received dividends. This was my first contract and it didn't seem sus to me at the time, not so sure now, despite all the assurances this was an HMRC approved solution

Any one else in this situation? If so how are you planning to proceed?

My bold text above. That was your first mistake. HMRC never "approve" tax avoidance schemes. The second mistake was believing the assurances and signing up. I think it likely you are going to need professional help with something potentially as complex as this sounds to me.

[BlueSquid]

I got one of these nudge letters a few weeks back, not knowing what it was to do with I contacted HMRC, they have come back and said it was related to "Actinium Dividend" during the period 2005 - 2007. In this period I contracted through Actinium, a management company that I became an employee of. Their structure saw income split with a proportion being paid as salary to the contractor and the remainder invested into a company in which the contractor was a share holder and received dividends. This was my first contract and it didn't seem sus to me at the time, not so sure now, despite all the assurances this was an HMRC approved solution

Any one else in this situation? If so how are you planning to proceed?

[BolshieBastard]

Ah, I see, and no I don't know anything about this particular investigation.

HMRC can mothball an investigation for as long as they like, decades even, and restart it whenever it suits them. They shouldn't be allowed to get away with this but sadly they can.

After this length of time, if you do eventually have to settle, I'd brace yourself for a whopping amount of late payment interest.

Not strictly correct. You can take the matter to an FTT and ask the FTT to determine HMRC should issue a Closure Notice.

[DealorNoDeal]

HMRC can mothball an investigation for as long as they like, decades even, and restart it whenever it suits them. They shouldn't be allowed to get away with this but sadly they can.

Yep, once they've opened an enquiry, there's no time limit for concluding it.

[ns1]

Ah, I see, and no I don't know anything about this particular investigation.

HMRC can mothball an investigation for as long as they like, decades even, and restart it whenever it suits them. They shouldn't be allowed to get away with this but sadly they can.

After this length of time, if you do eventually have to settle, I'd brace yourself for a whopping amount of late payment interest.