HMRC Enquiry letters on Loans from EBT and other schemes

[webberg]

Got it. Then I guess there is settlement in context to the resolution of an ongoing open enquiry between client and HMRC?

If the above is true, then is it possible to get an indication of which provides the better ‘terms’ based on the scheme subject to enquiry?

It's quite simple.

CLSO allegedly gives you 100% confidence that all matters are settled provided you pay 100% of what HMRC want. (See other threads about what "final" means).

Litigation is a coin toss. The fact of going to Court at all means you are scaling back from 100%. This is opinion territory. I would say that any scheme going to Court on the original opinion from a QC from years ago, would have a very low chance of success. Going with a Rangers based argument may have a better chance.

A resolution plan has to achieve three things to be successful. First it has to cast enough doubt on HMRC's possible argument in Tribunal so as to make it unsustainable under their litigation and settlement strategy. This means that they look at "settlement" and not "litigation".

Second it has to be able to defeat the current legislative attempts to tax twice the same amount.

Third it has to be either attractive enough in terms of tax take to allow HMRC to reach a compromise (that would be confidential) or able to expose the long list of HMRC shortcomings in this area so that they do not want this in the open.

Chances of getting that?

Some advisers will be more bullish than others and you have to talk to them in detail and understand first, the dire situation HMRC has put you in and second, the relative chances of the above and third, your appetite and capacity to comprehend the routes available and the consequences of an HMRC determined to collect money.

I'm well aware that many people are seeking certainty.

I'm equally well aware that I cannot deliver that.

I also claim that HMRC's "certain" CLSO is nothing of the sort, but that view is presently out of fashion so I'll not play that broken drum for a while.

[webberg]

I will add to the above that the following is NOT settlement.

1. Paying all the APNs that are issued.

2. Paying the DR charge.

These are separate events and will NOT SETTLE YOUR POSITION.

[Finalwhistle]

got it

It's quite simple.

CLSO allegedly gives you 100% confidence that all matters are settled provided you pay 100% of what HMRC want. (See other threads about what "final" means).

Litigation is a coin toss. The fact of going to Court at all means you are scaling back from 100%. This is opinion territory. I would say that any scheme going to Court on the original opinion from a QC from years ago, would have a very low chance of success. Going with a Rangers based argument may have a better chance.

A resolution plan has to achieve three things to be successful. First it has to cast enough doubt on HMRC's possible argument in Tribunal so as to make it unsustainable under their litigation and settlement strategy. This means that they look at "settlement" and not "litigation".

Second it has to be able to defeat the current legislative attempts to tax twice the same amount.

Third it has to be either attractive enough in terms of tax take to allow HMRC to reach a compromise (that would be confidential) or able to expose the long list of HMRC shortcomings in this area so that they do not want this in the open.

Chances of getting that?

Some advisers will be more bullish than others and you have to talk to them in detail and understand first, the dire situation HMRC has put you in and second, the relative chances of the above and third, your appetite and capacity to comprehend the routes available and the consequences of an HMRC determined to collect money.

I'm well aware that many people are seeking certainty.

I'm equally well aware that I cannot deliver that.

I also claim that HMRC's "certain" CLSO is nothing of the sort, but that view is presently out of fashion so I'll not play that broken drum for a while.

ok. So my responses to the HMRC enquiry (via an advisor) are ultimately trying to make things difficult for HMRC with the end objective of achieving the above. Considering I haven't even sent an initial response to HMRC yet, assuming this will take numerous iterations, and each iteration will take months... I will have sacrificed my opportunity for CLSO2 (May 2018) and potentially (likely) breached April 2019... and even then its likely that the enquiry will fail.

however, it still appears I have an option to express an interest in CLSO by May 2018 (tick that box)...and still keep my enquiry ongoing. In which case i'm still exploring both options?

[webberg]

ok. So my responses to the HMRC enquiry (via an advisor) are ultimately trying to make things difficult for HMRC with the end objective of achieving the above. Considering I haven't even sent an initial response to HMRC yet, assuming this will take numerous iterations, and each iteration will take months... I will have sacrificed my opportunity for CLSO2 (May 2018) and potentially (likely) breached April 2019... and even then its likely that the enquiry will fail.

however, it still appears I have an option to express an interest in CLSO by May 2018 (tick that box)...and still keep my enquiry ongoing. In which case i'm still exploring both options?

If I have interpreted this correctly, you have an enquiry from HMRC into a tax return. I'm not sure why you want to "make things difficult for HMRC" on that other than out of some misplaced view that it will ultimately help reduce the expected result? On average HMRC will turn around a response within say 6 to 8 weeks - then give you 4 weeks to reply - then issue a Schedule 36 notice (fines and penalties for not replying) - then upon receipt of an answer claim that they will issue a closure notice. That might need months.

I'm not clear how an enquiry can "fail"?

Chances are if you go down the enquiry route, you reach a point of going to Tribunal or caving in or somebody finds a different answer.

You cannot "sacrifice" your opportunity on CLSO 2. Register by the end of May and the claim is that you will be in possession of agreed figures by the end of September. Unlikely. Almost certainly if you have registered and supplied what they need, an extension will be forthcoming. Perhaps to December, perhaps to March 19.

Also be clear. These are not "options".

If HMRC has you under enquiry, you are advised to answer their letters. Ignoring HMRC letters is never a good idea. You have no option here. (I suppose you could ignore the letters but that way lies some heavy penalties).

The settlement is a limited option. You can start the process, get all the way to the contract and then decline to sign it and let it go. That puts you back into enquiry. The option is limited in that it's HMRC's number or no deal.

This is my last on this. Most of the last dozen or so posts have repeated information that is already available on these threads and a couple of hours research would be sensible.

[Finalwhistle]

If I have interpreted this correctly, you have an enquiry from HMRC into a tax return. I'm not sure why you want to "make things difficult for HMRC" on that other than out of some misplaced view that it will ultimately help reduce the expected result? On average HMRC will turn around a response within say 6 to 8 weeks - then give you 4 weeks to reply - then issue a Schedule 36 notice (fines and penalties for not replying) - then upon receipt of an answer claim that they will issue a closure notice. That might need months.

I'm not clear how an enquiry can "fail"?

Chances are if you go down the enquiry route, you reach a point of going to Tribunal or caving in or somebody finds a different answer.

You cannot "sacrifice" your opportunity on CLSO 2. Register by the end of May and the claim is that you will be in possession of agreed figures by the end of September. Unlikely. Almost certainly if you have registered and supplied what they need, an extension will be forthcoming. Perhaps to December, perhaps to March 19.

Also be clear. These are not "options".

If HMRC has you under enquiry, you are advised to answer their letters. Ignoring HMRC letters is never a good idea. You have no option here. (I suppose you could ignore the letters but that way lies some heavy penalties).

The settlement is a limited option. You can start the process, get all the way to the contract and then decline to sign it and let it go. That puts you back into enquiry. The option is limited in that it's HMRC's number or no deal.

This is my last on this. Most of the last dozen or so posts have repeated information that is already available on these threads and a couple of hours research would be sensible.

I used your words from one of my first posts. "our clients pay us to make things difficult for HMRC...." i did ask then what the overall objective of what that was.... It appears nothing! so effectively your clients are paying to make things difficult for no reason other than making HMRC work for their money (which they will inevitably get!). So yes, we have gone in a big circle and i've had all my questions answered. Unfortunately i've already paid in advisor to answer enquiries...when actually all i should be doing is registering for CLSO. however its good to know that i can do both in parallel.
there are whisperings around my contractor group of a potential way around the loans... i shall share that with this thread once i hear what it is... and you can all jump on it lol (i know you love it really...)

[ric_77]

hi

I was issued with an SA check letter for 2015-16 in Dec of which my provider confirmed they were responding to HMRC with 'example cases' and for me to sign and return a letter that acted as authority for them to do so.

I called and spoke directly with HMRC to inform them that 'X' would be replying on my behalf. By mid Jan X again had confirmed that 'no further action was needed' as this was being dealt with.

Fast forward to late Jan and a further call to HMRC confirmed that X had still not responded and soon after, much to my surprise, an email arrived from X recommending the services of a new tax advisor company who would be better suited to reply to HMRC but an 'initial fee' would now be required.

It comes across as X seeking an opportunity to make some further cash out of ex employees for something they had previously confirmed they would be dealing with with no mention of this 'new' tax company.

My opinion is they have already had fees from me for that period so why should i be paying again for their services.

Would welcome anybodys opinions and or advice on this please.

[ChimpMaster]

hi

I was issued with an SA check letter for 2015-16 in Dec of which my provider confirmed they were responding to HMRC with 'example cases' and for me to sign and return a letter that acted as authority for them to do so.

I called and spoke directly with HMRC to inform them that 'X' would be replying on my behalf. By mid Jan X again had confirmed that 'no further action was needed' as this was being dealt with.

Fast forward to late Jan and a further call to HMRC confirmed that X had still not responded and soon after, much to my surprise, an email arrived from X recommending the services of a new tax advisor company who would be better suited to reply to HMRC but an 'initial fee' would now be required.

It comes across as X seeking an opportunity to make some further cash out of ex employees for something they had previously confirmed they would be dealing with with no mention of this 'new' tax company.

My opinion is they have already had fees from me for that period so why should i be paying again for their services.

Would welcome anybodys opinions and or advice on this please.

Exit the scheme.
Ask HMRC if you can amend the tax return for 2015/16 so that you can declare all income.

[ric_77]

Exit the scheme.
Ask HMRC if you can amend the tax return for 2015/16 so that you can declare all income.

Thanks for the reply.

Im long out of the scheme and was considering to pay the fee for the provider to go back on my behalf to HMRC with the required info.

Apologies for my lack of basic knowledge on this, but by adding this to my SA does it mean that the loans etc are now declared and subject to being taxed and an end to the SA check?

[webberg]

I used your words from one of my first posts. "our clients pay us to make things difficult for HMRC...." i did ask then what the overall objective of what that was.... It appears nothing! so effectively your clients are paying to make things difficult for no reason other than making HMRC work for their money (which they will inevitably get!). So yes, we have gone in a big circle and i've had all my questions answered. Unfortunately i've already paid in advisor to answer enquiries...when actually all i should be doing is registering for CLSO. however its good to know that i can do both in parallel.
there are whisperings around my contractor group of a potential way around the loans... i shall share that with this thread once i hear what it is... and you can all jump on it lol (i know you love it really...)

You've used the phrases out of context.

[webberg]

Thanks for the reply.

Im long out of the scheme and was considering to pay the fee for the provider to go back on my behalf to HMRC with the required info.

Apologies for my lack of basic knowledge on this, but by adding this to my SA does it mean that the loans etc are now declared and subject to being taxed and an end to the SA check?

The fees you paid were for using their scheme.

You have not paid them for tax advice.

It continues to baffle me as to why this simple distinction is not obvious.

For you, the question is simple. Do you trust them to operate in your interest or theirs?

If the latter, seek advice elsewhere.