Reply to: tax question

[NotAllThere]

If I remember right, Castlemaine closed down around 2002/2003.

So, presumably, they no longer give a XXXX

...IGMC.

[helen7]

If I remember right, Castlemaine closed down around 2002/2003.

An email from a recently set up Yahoo.co.uk account informed all of the employees. Goes to show what a profession outfit they were. Don't know if they set anything up afterwards.

Did the people in this scheme really get investigated?

[THEPUMA]

As expat said, it can't be net unless they are chasing the employer for the tax. I think worst case scenario is that you are taxed on £10K as gross plus interest and penalties.

[ChimpMaster]

I suspect it might have been the Castlemaine loan scheme.

Just tried finding their website and it's no longer there! I think Castlemaine contractors got investigated a long time ago, because the disclosure rules.

[ASB]

We've got no kids so they can fight over it with the thieving relatives.

I never thought Hotblack Desiatos scheme might need to become reality.

[DonkeyRhubarb]

They'll chase the estate......

We've got no kids so they can fight over it with the thieving relatives.

[ASB]

The wife has joked that we'll probably be dead before it's sorted out.

They'll chase the estate......

[DonkeyRhubarb]

I suspect it might have been the Castlemaine loan scheme.

The real killer if you lose your appeal is the interest. I was in the MontP scheme 2001/2/3 and because HMRC levy a hefty interest rate (currently 7.5%), I have estimated that the interest to date is already 40% on top of the original tax liability.

HMRC have made their intention clear that they will litigate against any tax avoidance scheme wherever they can. My advice to anyone thinking of using a scheme is to think about it very carefully. You are almost certainly going to get investigated, and with the new disclosure regime there is no way of hiding.

If you are determined to use a scheme, then consider the following to protect yourself:

1) Do not spend the money saved

2) Put it all into a CTD at the end of each tax year to protect yourself from interest penalties

And bear in mind it may be many years before it's safe to use the money. My 2001 tax return has already been under investigation for 5 years. The wife has joked that we'll probably be dead before it's sorted out.

Of course there is another option: use the most aggressive scheme you can find, run it for as long as you can and then bugger off abroad before the tax demand arrives.

[ChimpMaster]

Delorean - what was the name of the scheme you were on ?

[ChimpMaster]

Makes you wonder how this differs from the Montpelier scheme. They both use some kind of "loan" or such payment, so why would HMRC demand that one is deemed a gross payment while the other is deemed a net payment.

[expat]

I'd agree with your accountant. The payment is likely to be deemed net.

They are likely to deem it net, but (logically at least) that can be disputed. It depends on where the money to pay the tax comes from. If you personally pay it from your own money, we may say that it is paid out of the £10,000 so that £10,000 is gross - you personally do not get to keep all £10,000. But if it comes from company money and you personally get to keep all of the £10,000 then obviously it is £10,000 net.

I suspect in this case there is no company money to pay it with, so you will have to pay it from your own money. I.e. it will become clear that the £10,000 was gross, even if at the time you thought it was net.
Of course that means that you shouldn't have taken it as if it had been net, but that's another question.

[xoggoth]

That sounds crazy. How can tax be more than the gross amount actually earned?

[Cheshire Cat]

yep, looks like you're fooked.
Sell the beemer, plead insanity and tell them you'll give them £5 a week.

[BrilloPad]

Who owned the scheme? Have you asked them your liability?

I read on the bn66 thread that monp gave someone an estimate of tax bill if montp lose (this is the double taxation thing).

[Alan @ BroomeAffinity]

I'd agree with your accountant. The payment is likely to be deemed net.