Edge EBT thread

[DonkeyRhubarb]

Secondly, given that there is virtually no difference between settlement and APNs

One difference is that APNs only cover the tax liability (no interest). HMRC would only be able to collect the interest at the very end of the legal process if they win.

Moreover, once you've paid the APN it's like a payment on account and it stops interest accruing.

In other words, it will cost you more to settle than paying an APN.

[lfcynwa]

Excuse my ignorance

What's an APN?

[DonkeyRhubarb]

What's an APN?

Accelerated Payment Notice. The new "pay now, argue later" legislation in this year's budget. If it becomes law, HMRC will start issuing them from July onwards to anyone who's used a DOTAS registered scheme*.

If you receive an APN you've got 90 days to cough up or face penalties and enforcement.


* or a scheme they reckon should have been registered

[Saleos]

Hi DonkeyRhubarb,

Not sure that will be true in all cases. For some settlement may prove better than paying under an APN although at a cost of giving up any prospect of having those monies returned.

Settlement may be attractive where there are years currently with no assessment or enquiry but that might otherwise be at risk of a discovery assessment (so 10-11 onwards) or one under s36(1) TMA 1970 (if a taxpayer has been "careless" which can allow HMRC six years thus exposing everything as yet un-assessed (or enquired into) back to 08-09.

As ever with such things it is never straight forward!

One difference is that APNs only cover the tax liability (no interest). HMRC would only be able to collect the interest at the very end of the legal process if they win.

Moreover, once you've paid the APN it's like a payment on account and it stops interest accruing.

In other words, it will cost you more to settle than paying an APN.

[lfcynwa]

Accelerated Payment Notice. The new "pay now, argue later" legislation in this year's budget. If it becomes law, HMRC will start issuing them from July onwards to anyone who's used a DOTAS registered scheme*.

If you receive an APN you've got 90 days to cough up or face penalties and enforcement.


* or a scheme they reckon should have been registered

Thanks was aware of the new law however I knew this as follow-on notice, my mistake, thanks for clarification..

[DonkeyRhubarb]

Thanks was aware of the new law however I knew this as follow-on notice, my mistake, thanks for clarification..

There are 2 parts to the legislation. Follower has a smaller impact. They've estimated 4,000 taxpayers will receive these over the next 2 years.

Tax Avoidance: 3 Feb 2014: Hansard Written Answers - TheyWorkForYou

AP increases this 10-fold.

https://www.gov.uk/government/upload...DOTAS_GAAR.pdf

"This measure and the Autumn Statement 2013 follower measure will require Payment Notices to be issued to around 43,000 taxpayers involved in avoidance schemes currently under dispute with HMRC. The vast majority of notices are expected to be issued over the course of 2014-15 and 2015-16."

[slatt]

Settlement may be attractive where there are years currently with no assessment or enquiry but that might otherwise be at risk of a discovery assessment (so 10-11 onwards) or one under s36(1) TMA 1970 (if a taxpayer has been "careless" which can allow HMRC six years thus exposing everything as yet un-assessed (or enquired into) back to 08-09.

Saleos, are you saying that if there is no Discovery Assessment or enquiry open for the years before 08/09 (which is the 6 year rule limit), then there shouldn't be an APN sent out?

I had the understanding that an APN could be raised for any DOTAS scheme for any year, regardless of outstanding DAs or enquiries....

I'll be happy to be proven wrong though!

[DonkeyRhubarb]

Saleos, are you saying that if there is no Discovery Assessment or enquiry open for the years before 08/09 (which is the 6 year rule limit), then there shouldn't be an APN sent out?

I had the understanding that an APN could be raised for any DOTAS scheme for any year, regardless of outstanding DAs or enquiries....

I'll be happy to be proven wrong though!

They will only be able to issue an APN where there is an open enquiry, assessment or pending appeal.

I have come across one case recently where they went back more than 6 years because the scheme had not been registered under DOTAS.

[ChimpMaster]

They will only be able to issue an APN where there is an open enquiry, assessment or pending appeal.

I have come across one case recently where they went back more than 6 years because the scheme had not been registered under DOTAS.

They can only go back more than 6 years if there was a deliberate attempt to mislead or misinform. Up to 6 years is probably the maximum they can go back in the majority of the 'Loan' cases even when you don't have a DOTAs number if the scheme wasn't registered. After all, how can you be accused of not having registered the scheme?

[DonkeyRhubarb]

They can only go back more than 6 years if there was a deliberate attempt to mislead or misinform. Up to 6 years is probably the maximum they can go back in the majority of the 'Loan' cases even when you don't have a DOTAs number if the scheme wasn't registered. After all, how can you be accused of not having registered the scheme?

The thing is HMRC can "accuse" and the taxpayer would then have to go to a tribunal to challenge that.

In the mean time, once they've issued the dodgy assessment, they can then slap the taxpayer with an APN. And there is virtually no right of appeal against an APN.