Penalties Letter Received from HMRC

[Delendog]

I think you will find that the letter is probably a standard one from someone who has no idea you are talking to them, I'd respond and give them the details of who you are talking to and ask them to respond to you again.

[Confusedetc]

I think you will find that the letter is probably a standard one from someone who has no idea you are talking to them, I'd respond and give them the details of who you are talking to and ask them to respond to you again.

I'm hoping, it does say settlement terms 2020 at the bottom, but yeh hopefully not linked the previous stuff done and taxes paid etc.
I just realised I have a letter from HMRC from 2021 saying my open enquiries into tax year ending 16,17 & 19 are now closed.
So does that mean if they have already looked into 19 they couldn't charge a inaccuracy penalty ? and the other 2 years (18 / 20) if it's over a year since I completed the tax returns surely they can't give a penalty for inaccuracy as I thought it had to be within a year for them to do so, or is it different with settlement.

[Chevalier]

To be honest, I’m a bit confused if you’ve got anything to actually “settle”

Did HMRC open enquiries into the various years, and then issue closure notices? If so the matters looked into are now closed, settled etc etc. So if HMRC looked at the DR scheme and loan charge declared in 2019 these matters are now settled.

You said you didn’t file a 17/18 return, and I presume HMRC never issued a notice to file? If so it’s now too late for self assessment anyway

With regards to penalties for inaccuracies, these can only come about if you are actually assessed for additional taxes.

[Confusedetc]

To be honest, I’m a bit confused if you’ve got anything to actually “settle”

Did HMRC open enquiries into the various years, and then issue closure notices? If so the matters looked into are now closed, settled etc etc. So if HMRC looked at the DR scheme and loan charge declared in 2019 these matters are now settled.

You said you didn’t file a 17/18 return, and I presume HMRC never issued a notice to file? If so it’s now too late for self assessment anyway

With regards to penalties for inaccuracies, these can only come about if you are actually assessed for additional taxes.

Well yeh I guess the original tax return requests for 16/17/19 only were enquiries and they have since closed them, but just after they sent those tax return requests / enquiries they also sent me the loan charge request, so I made the 19 return part of the loan charge process when I submitted it, in my mind, but seems they didn't maybe treat it as such and closed it as part of their original enquiry.

Yeh HMRC never issued a notice to file 17/18 like you say. (so I included those loans within the loan charge process)

I was previously told on here that going through the loan charge does not settle things, and I still need to settle, so I applied for settlement 2020.

It still leaves years ending 18 and 20 open or unsettled currently, but I thought it was being done so via the loan charge.
Seems they have got mixed up between enquiries into those years and then me doing the loan charge process (or so I thought I was even though I didn't elect to on their online form as they never asked me to) and now settlement. It's all a bit of a mess it seems and frustrating as they have never been clear or seem to known what they are talking about when called to discuss.

I am hoping years ending 16/17/19 being closed will help things at least in terms of extra things I might need to pay.

[Chevalier]

I’m beginning suspect you’ve applied for settlement when you didn’t need to, and this in turn is what has upset HMRC’s mailing machine in to sending out its letter.

The settlement scheme applies for what HMRC terms as open years up to 18/19, and to “close” these tax disputes.

To be an “open year” you need to either have a discovery assessment or an open enquiry into your self assessment tax return, which has not been closed. None of this seems to apply from what you said.

I doubt HMRC even could now issue a valid discovery now for 17/18 under circumstances described, but a tax professional could confirm, meanwhile you say you have included these loans in the loan charge.

Separately the 19/20 year you said you have declared the 19/20 loans as income. There’s no enquiry or assessment here from what you’ve said and I doubt there’s any additional liabilities (unless there are any errors in your self assessment)

One learning from dealing with HMRC is a lack of cross referencing, so although undesirable it’s understandable that you might have perhaps put yourself back on their radar.

I would write back and explain, and perhaps be very wary of (and appeal) any discoveries that come through the post in the meantime.

Good luck!

[Confusedetc]

I’m beginning suspect you’ve applied for settlement when you didn’t need to, and this in turn is what has upset HMRC’s mailing machine in to sending out its letter.

The settlement scheme applies for what HMRC terms as open years up to 18/19, and to “close” these tax disputes.

To be an “open year” you need to either have a discovery assessment or an open enquiry into your self assessment tax return, which has not been closed. None of this seems to apply from what you said.

I doubt HMRC even could now issue a valid discovery now for 17/18 under circumstances described, but a tax professional could confirm, meanwhile you say you have included these loans in the loan charge.

Separately the 19/20 year you said you have declared the 19/20 loans as income. There’s no enquiry or assessment here from what you’ve said and I doubt there’s any additional liabilities (unless there are any errors in your self assessment)

One learning from dealing with HMRC is a lack of cross referencing, so although undesirable it’s understandable that you might have perhaps put yourself back on their radar.

I would write back and explain, and perhaps be very wary of (and appeal) any discoveries that come through the post in the meantime.

Good luck!

Thanks for your replies and thoughts mate much appreciated.
I will now add some of this context in my reply to them, glad I waited before replying and found the closure letter and got a bit more understading from yourself.
Yes there does seem to be a lack of cross referencing from them, it's pretty poor when somebodies financies / penalties etc are at stack.
Will see what they say (probably 6 months+ down the line or something by time they respond)

[Confusedetc]

So this morning I came down to the frontdoor to find the dreaded brown letter of HMRC on the floor.
(After I replied to their previous letter to says I have paid all tax under loan charge scheme etc)

The letter said to my amazement:
"Thank you for contacting us to let us know that you wanted to settle your disguised remuneration scheme use under our 2020 settlement terms.
This letter is to confirm that we have reviewed your case and can confirm there is nothing left to settle, therefore no further action is required"

A real unexpected surprise, I was expecting this to go on and on and for them to charge penalties, late payment interest, inheritance tax, and tax on accrued interest on the loans.
So I won't question it and hopefully can move on now finally after 3 long years.

[DealorNoDeal]

So this morning I came down to the frontdoor to find the dreaded brown letter of HMRC on the floor.
(After I replied to their previous letter to says I have paid all tax under loan charge scheme etc)

The letter said to my amazement:
"Thank you for contacting us to let us know that you wanted to settle your disguised remuneration scheme use under our 2020 settlement terms.
This letter is to confirm that we have reviewed your case and can confirm there is nothing left to settle, therefore no further action is required"

A real unexpected surprise, I was expecting this to go on and on and for them to charge penalties, late payment interest, inheritance tax, and tax on accrued interest on the loans.
So I won't question it and hopefully can move on now finally after 3 long years.

It sounds like they got themselves even more confused etc than you.