HMRC Enquiry letters on Loans from EBT and other schemes

[jbryce]

APN, interest, penalties.

So, I have a COP8.
For the sake of argument I decide not to settle.
They send me an APN for the tax. No interest and no penalty.

Am I correct in assuming that they will not get the interest or penalties until my case has been heard in an FTT?

That could be never? So how does all of this free up the court systems?

[Rob79]

Hi Rob,

Is my understanding correct in that if a COP8 has been raised on a particular part of a Self assessment then only that portion mentioned in the COP8 letter can be revisited?
eg Self assessment for a pertinent year has two employment sections filled in. COP8 was raised mentioning employment 1. Does that mean they are restricted into looking into employment 1 only or can they also look into employment 2? Lets assume the 4/6 year window has now passed and there was full disclosure on the self assessment.

Regards,
NeverTheTwain

I would be reluctant to say that the COP8 is limited to a particular part of the self assessment return.

I would be tempted to apply a wider interpretation and say that it applies to your tax affairs for the whole year.

You would need to see the terms of the accompanying letter(s) and the context in which the COP8 was issued.

[Rob79]

So, I have a COP8.
For the sake of argument I decide not to settle.
They send me an APN for the tax. No interest and no penalty.

Am I correct in assuming that they will not get the interest or penalties until my case has been heard in an FTT?

That could be never? So how does all of this free up the court systems?

There is no interest on an APN. There are penalties for non payment which can amount to 15% of the tax demanded over a period.

Interest will be calculated when the tax position is settled with the APN being deemed to be a payment on account. That may be post FTT or later.

How does it free up the Courts? It doesn't and that's not the immediate purpose. In fact the APN will lead to more Court action and a further slowing of settlement of claims. HMRC officers accept this but the policy makers stick to the official line.

[DonkeyRhubarb]

APNs to be issued to 2500 taxpayers per month by end of year

HMRC say they are aiming to get the entire 43,000 out in 18 months.

'Thousands' of pay-up tax notices to hit doormats - 12 Sep 2014 - Accountancy Age

[convict]

In the scenario of APNs being sent to discovery assessment holders and the postponements being cancelled due to the APNs does anyone know if time to pay arrangements (without penalty) would still be possible?

[Rob79]

In the scenario of APNs being sent to discovery assessment holders and the postponements being cancelled due to the APNs does anyone know if time to pay arrangements (without penalty) would still be possible?

My understanding is that time to pay is always possible and that with APN's there may be, if not special terms, certainly an understanding that an acceleration of tax payments can cause real issues.

As always, if you get an APN (or other demand) and will have trouble paying tell HMRC EARLY and start discussions.

[Axeman]

What about the settlement opportunity?

Just out of interest how does this timetable for APNs affect those of us with Settlement Opportunity notices? Is the APN schedule aligned to SOs so that those with SOs get their APNs after the SO window has closed IF they haven't settled? Or is that too much to ask?

[bkkit1971]

Just out of interest how does this timetable for APNs affect those of us with Settlement Opportunity notices? Is the APN schedule aligned to SOs so that those with SOs get their APNs after the SO window has closed IF they haven't settled? Or is that too much to ask?

if they issue SOs with a deadline why they'd send out APNs before that date, it seems illogical to me

[Rob79]

Just out of interest how does this timetable for APNs affect those of us with Settlement Opportunity notices? Is the APN schedule aligned to SOs so that those with SOs get their APNs after the SO window has closed IF they haven't settled? Or is that too much to ask?

It seems to me from various discussions that there is no alignment between the APN calendar and settlement offer deadlines.

You could for example enter into a settlement discussion which reaches a final figure in say April 2015. In the meantime you get an APN due to be paid in March 2015. In that case, if the settlement amount is more than the APN, you need to pay the full APN or risk a penalty, regardless of the fact that you have an agreed liability now.

The APN is just a payment on account of the final liability.

[Axeman]

Thanks Rob