HMRC enquiries for EBT schemes through SANZAR

[Michael J Perry FCA]

Discovery assessments - Update

Google the following:

HMRC v Charlton, Corfield and another

Upper Tribunal 2012

[ssbahra]

Hi all,

I'm in the same boat as everyone else on here re the 08-09 year.

I used CM to appeal and that's been accepted and the balance owed suspended.

What I want to know, is how long do HMRC reasonably get to take this forward now ? I know people will say straight away that it's HMRC and they can take as long as they want, but in reality that's surely not the case. HMRC have been more than clear that interest will continue to accrue on any balance, and in the event that the appeal is unsuccessful then they will no doubt pursue us for that interest. BUT.........they can't sit on this now for 5 years, do absolutely nothing and then say oh by the way, you do owe the money plus you now owe us 8 years interest too.

I thought that under UK law individuals were entitled to finality on tax affairs. Whilst I appreciate HMRC have the right to investigate, surely they must still be bound by some form of timescales surrounding this, otherwise they could sit on these cases for years and years. The obstacle now is HMRC and not us, the ball is firmly in their court so to speak.

Does anybody know whether they have to conclude an investigation is a certain period of time ?

Thanks all

Hi MrO666, how do you know the 08/09 has been settled. Did they send you a letter? Have you any other investigations in progress?

[andyc2000]

Google the following:

HMRC v Charlton, Corfield and another

Upper Tribunal 2012

So the way I read this is that:

As long as all the relavant information was entered on the tax return (namely the SRN details) and because the provider has submitted AAG1, then HMRC is not entitled to open a discovery assessment after 12 months. And yet they have.

[new user]

Hi MrO666, how do you know the 08/09 has been settled. Did they send you a letter? Have you any other investigations in progress?

We need to submit request to to the First-tier Tribunal ourselves – not HMRC, otherwise they can drag it forever and accumulate interest fees, there is no time frame.
HM Revenue & Customs: How to appeal against an HMRC decision - direct tax

Appealing to the First-tier Tribunal

Tax Tribunal guidance

[MrO666]

Hi MrO666, how do you know the 08/09 has been settled. Did they send you a letter? Have you any other investigations in progress?

Hi,

I never said it was settled, indeed my appeal is in and will no doubt sit dormant for the next few years until HMRC realise that they probably haven't got much hope in proving that any of us owe them anything. Remember, what they think and or know and what they can prove beyond doubt may well be two different things.

All I did say was that HMRC cannot now issue any discovery assessments for the 08-09 year to anybody, that is unless you didn't disclose schemes etc on your original return, in which case they still would have until April 2015 to hit you with it.

After taking legal advice on this I was also told that if I were to settle the 08-09 year, then in all likelihood HMRC would then start hitting me for anything else they think off (including subsequent years), as if you settle once then it's more or less an admission of guilt. I'm not saying that approach is going to be right for everyone, but I won't be paying anything until every legal challenge and appeal has been concluded........and based upon said legal advice it's questionable as to whether HMRC would win this one anyway, or whether the time, effort and cost in doing so is actually worth their while.

[MrO666]

We need to submit request to to the First-tier Tribunal ourselves – not HMRC, otherwise they can drag it forever and accumulate interest fees, there is no time frame.
HM Revenue & Customs: How to appeal against an HMRC decision - direct tax

Appealing to the First-tier Tribunal

Tax Tribunal guidance

That would really be a foolish not to mention unbelievably costly thing to do.

Are you honestly suggesting that you would want to voluntarily go up against HMRC in FT tribunal.......don't know about everyone else, but i'm not keen on having to pay for tax specialists and QC's at no doubt £7-800 an hour.........

[MrO666]

Keep in mind although it's HMRC we're dealing with here, they still have a duty to get value for money (and they know that).

They sent out a rumoured 28,500 discovery assessments for 08-09. That means that they needed to be equipped to handle and initial 28,500 responses.....which is no cheap process. On top of that they would need to also carry out 28,500 investigations should they wish to pursue.

This is a very expensive process for HMRC, so unless the tax which they're actually getting back is significant to offset the cost of actually getting that tax, then it's a pointless endeavour.

Some would argue that HMRC have already won, as it's made everyone who uses / used these schemes think very carefully about continuing to do so.......which is exactly what they wanted to do.

Remember - Jimmy Carr has not as yet paid a penny, even after the huge furor about his tax planning.

[new user]

That would really be a foolish not to mention unbelievably costly thing to do.

Are you honestly suggesting that you would want to voluntarily go up against HMRC in FT tribunal.......don't know about everyone else, but i'm not keen on having to pay for tax specialists and QC's at no doubt £7-800 an hour.........

Existing HMRC rules don’t require any further costly investigations even if tax demands don’t have any supporting evidence and the numbers are incorrect.
There is no difference in cost of HMRC arranging tribunal and contractor arranging it, it seems that if HMRC could win it now – everyone would have their appeals closed. HMRC is making aggressive changes to make legislation work for them and accumulating interest fees.
At least this point of view makes common sense for me, but I must admit that I am somehow afraid to make appeal myself despite having relatively small number on my tax demand.

[vern19]

Existing HMRC rules don’t require any further costly investigations even if tax demands don’t have any supporting evidence and the numbers are incorrect.
There is no difference in cost of HMRC arranging tribunal and contractor arranging it, it seems that if HMRC could win it now – everyone would have their appeals closed. HMRC is making aggressive changes to make legislation work for them and accumulating interest fees.
At least this point of view makes common sense for me, but I must admit that I am somehow afraid to make appeal myself despite having relatively small number on my tax demand.

I have been advised that a voluntary settlement will likely be the end result for most people and the settlement amount will be less than stumping up now and opening yourself up to NIC enquiries etc..

[new user]

I have been advised that a voluntary settlement will likely be the end result for most people and the settlement amount will be less than stumping up now and opening yourself up to NIC enquiries etc..

If it is true – this is just a confirmation that HMRC could not win it now, but it will in the near future.
Rangers won the case as HMRC was not prepared well.
In any case Full amount = reduced amount + NIC