Reply to: Horizon-Tec

[centurian]

In theory, it is also possible for them to impose penalties as well as interest, although they haven't done this with BN66 because the scheme was fully disclosed on our tax returns.

A small mercy I guess and this is often double the amount (plus interest).

So how much worse off are you, compared to if you had paid tax and NI on the earnings. Presumably the interest rate is higher than any investments.

Also are your fees to the scheme providers being factored in - or is this money considered lost.

[pimpernell]

2/12/2004 is a bit of a red herring, since that announcement was only in the context of retrospective legislation, not litigation.

Ah. Now that's exactly what I mean. Why is it all so difficult? Xoggoth mentioned a 'four year' rule coming in on another thread:

But how does that fit with the general rules, coming in soon, that liability is limited to 4 years if there is no fraud or carelessness? If you accepted advice from bona fide companies who supplied schemes based on proper legal and accounting wisdom at the time how could you be called careless?

First I've heard of this.

So. Not that I'm admitting anything, but just say I wanted to get the COP8 settled in my own mind, How the f&&k can I predict how much they wil lask for if I don't know the parameters?

[DonkeyRhubarb]

Hi DR,

Yes. I've read a lot of your posts, and can see you've been round the houses with this.

So to summarise what you just said, appreciating that you're not a tax adviser but have boned up on the issue:

if they go the full mile, win in court close the scheme, claim back tax etc, then they can claim tax, NIC,s interest and penalties.

But I can't get a definitive answer to whether 2/12/2004 is as far back as they can claim. (Maybe I'm asking too much since not a lot seems to be definitive at the moment). But that's how it seems to me.

So my nightmare scenario is that I get to pensionable age, am just about to sit back and relax and then HMRC come knocking about 12 years from now with a big bill, and my retirement plans go out the window. A way to avoid the interest is to but a CTD now, which seems to me to bypass how long any legislation may take to become law (the 12 years from now scenario).

Any thoughts?

2/12/2004 is a bit of a red herring, since that announcement was only in the context of retrospective legislation, not litigation.

Assuming that HMRC/Treasury don't try to change the law retrospectively in a Budget to close the Horizon scheme, then any challenge will be through the courts.

Sadly, there doesn't seem to be anything to stop HMRC sitting on something for years before taking any action. In fact, that's how they got in such a mess with the BN66 schemes. Instead of legislating as soon as they became aware of them, they sat on their arses for 5 years and did nothing until it got completely out of hand.

A CTD would be one way to stop the interest mounting. Alternatively you could consider investing it in some way in the hope of outpacing the interest they charge (bank base + 2.5%).

[pimpernell]

DR - in response to an earlier question, the people I dealt with in Horizon were previously connected to Castlemaine.

Appreciate that BN66 will be a test case for retrospective legislation, and actually I think this is a particular circumstance (1987), and even if they win with MTM, wouldn't necessarily apply to other schemes.

[pimpernell]

I'm not a tax advisor but (sadly) I have become knowledgeable.

The Dawn Primarolo date of 2004 may only come into play if they were to enact retrospective legislation. However, I think it's unlikely they will try retro again until the outcome of BN66 is known.

If HMRC were to take the scheme to court (Commissioners Tribunal, High Court etc.) and win, then you would be liable to tax & NIC on the monies you received through the scheme. They would also apply interest from the date the tax would have been due, see end of this post for estimates:
http://forums.contractoruk.com/877547-post1.html

In theory, it is also possible for them to impose penalties as well as interest, although they haven't done this with BN66 because the scheme was fully disclosed on our tax returns. I would ask Horizon about this.

Barring retrospective legislation, they've got to take you to court and win before they can claim a penny off you. Unfortunately, you might have to wait years to find out if they are going to take any action. I suspect this is a deliberate ploy to screw up people's lives.

Hi DR,

Yes. I've read a lot of your posts, and can see you've been round the houses with this.

So to summarise what you just said, appreciating that you're not a tax adviser but have boned up on the issue:

if they go the full mile, win in court close the scheme, claim back tax etc, then they can claim tax, NIC,s interest and penalties.

But I can't get a definitive answer to whether 2/12/2004 is as far back as they can claim. (Maybe I'm asking too much since not a lot seems to be definitive at the moment). But that's how it seems to me.

So my nightmare scenario is that I get to pensionable age, am just about to sit back and relax and then HMRC come knocking about 12 years from now with a big bill, and my retirement plans go out the window. A way to avoid the interest is to but a CTD now, which seems to me to bypass how long any legislation may take to become law (the 12 years from now scenario).

Any thoughts?

[DonkeyRhubarb]

Is the above true? Is 2/12/2004 as far back as HMRC can go (I've read that Dawn Primarolo stated this in Dec 2004 Finance Bill or some such thing)?

Any tax advisers/ knowledgeable people able to comment?

I'm not a tax advisor but (sadly) I have become knowledgeable.

The Dawn Primarolo date of 2004 may only come into play if they were to enact retrospective legislation. However, I think it's unlikely they will try retro again until the outcome of BN66 is known.

If HMRC were to take the scheme to court (Commissioners Tribunal, High Court etc.) and win, then you would be liable to tax & NIC on the monies you received through the scheme. They would also apply interest from the date the tax would have been due, see end of this post for estimates:
http://forums.contractoruk.com/877547-post1.html

In theory, it is also possible for them to impose penalties as well as interest, although they haven't done this with BN66 because the scheme was fully disclosed on our tax returns. I would ask Horizon about this.

Barring retrospective legislation, they've got to take you to court and win before they can claim a penny off you. Unfortunately, you might have to wait years to find out if they are going to take any action. I suspect this is a deliberate ploy to screw up people's lives.

[pimpernell]

Liability

There seems to be quite a few people on this board affected by HMRCs new drive (one way or another). Putting MTM and BN66 aside, which I believe is only applicable to Double Taxation Treaty and partnerships, other so called 'tax avoidance' or 'tax planning' schemes that have been set up are obviously vulnerable.

I'm interested in (I suppose selfishly) my worse case scenario. Assuming (and I know it's an assumption) that HMRC realise in law that a lot of the schemes were set up to avoid paying NICs and Income Tax on UK resident received income via some sort of mechanism. I think the following is true:

• that they can claim 'back tax' and NICs back to 2nd December 2004 on monies received via the mechanism.
• They can apply interest at siomething like 8.5% a year presumably from 2/12/2004 to the point where they gain a legal ruling
• they can apply penalties over the complete period also.

Is the above true? Is 2/12/2004 as far back as HMRC can go (I've read that Dawn Primarolo stated this in Dec 2004 Finance Bill or some such thing)?

Any tax advisers/ knowledgeable people able to comment?

[pimpernell]

Was wondering if you got satisfactory answers from Horizon? I presume the fact they responded on this forum means they are up for helping you?

I sent them an email with a load of questions. They've received the email (I had acknowledgement) but they haven't answered the questions yet. Are you involved? If so, I'll let you know.

[dezze]

Oh. Hi Mark,

I've tried to call you twice but no answer. I could do with a chat - you'll recognise my voice, I'm sure.

Glad you saw the thread and answered.

Pimp(ernell)

Was wondering if you got satisfactory answers from Horizon? I presume the fact they responded on this forum means they are up for helping you?

[pimpernell]

Greetings Pimpernell.

We at Horizon are alive and kicking and would be more than happy to go through any questions or worries you may have. Here is our URL: www.horizon-members.com, so please feel free to contact us on any of the numbers or e-mail addresses listed to discuss your concerns.

Look forward to hearing from you.

Oh. Hi Mark,

I've tried to call you twice but no answer. I could do with a chat - you'll recognise my voice, I'm sure.

Glad you saw the thread and answered.

Pimp(ernell)

[Mark Duncan]

Horizon-Tec

Does anyone know what's happened to the Horizon people?

Greetings Pimpernell.

We at Horizon are alive and kicking and would be more than happy to go through any questions or worries you may have. Here is our URL: www.horizon-members.com, so please feel free to contact us on any of the numbers or e-mail addresses listed to discuss your concerns.

Look forward to hearing from you.

[DonkeyRhubarb]

HMRC snowed under with enquiries

HMRC have now opened queries into most of the EBT schemes. However, they have not progressed any of them much.

HMRC's policy seems to be to open enquiries on anything and everything that involves tax avoidance. With the introduction of the disclosure regime, I bet they automatically open enquiries on every single tax return which contains a scheme reference number.

The consequence of this is that they are snowed under with investigations and it takes years for them to make any progress. I hate to think what their backlog of enquiries is like. Hopefully the following FOI request might tell us.

http://www.whatdotheyknow.com/reques...s_open_under_c

This is one reason why HMRC must NOT be allowed to succeed with retrospective legislation like BN66, because it would give them an easy way out of the hole they've dug themselves into.

[sal626]

HMRC have now opened queries into most of the EBT schemes. However, they have not progressed any of them much.

The scheme I was in, ASMG – have had some correspondence from HMRC. Earlier this year HMRC were banking on the Sempra metals case to give them a positive decision. They lost that case – and did not even bother to appeal. There are now two special commissioner ruling against HMRC on EBTs. ASMG have requested HMRC to close the enquiries now, or let them know how they mean to progress – but have heard zilch from HMRC.

[DonkeyRhubarb]

So in the event of the law changing to the point where the Horizon scheme becomes illegal, the COP8 leaves the door open for them to come knocking at any time, if the law is made retrospectively

They don't have to rely on changing the law retrospectively.

If they feel they have got a chance of winning based on the existing law, as it stands, they can take a case to a Tribunal. One tax professional I spoke to said that it's now HMRC's policy to take legal action if they think they have at least a 50/50 chance of winning.

You should try and get in touch with Horizon to find out what the status of the investigation is. Typically, in these situations, HMRC will put everyone using the scheme under enquiry but only pursue one or two test cases.

Incidentally, did Horizon used to go under the name Castlemaine? I knew a lot of people in the Castlemaine scheme and I believe there were as many as 2000 contractors using it.

[pimpernell]

Hmmmm - if only

So for those interested what I now understand is happening that the SCI COP 8 I received pinpoints the last tax return when I had anything to do with Horizon.

So in the event of the law changing to the point where the Horizon scheme becomes illegal, the COP8 leaves the door open for them to come knocking at any time, if the law is made retrospectively

BN66 has been made retrospective to 1987 based on schemes misinterpretation of something that was already in law. What I now need to worry about is whether in the event of the Horizon scheme becoming illegal, that can be made retrospective, to say April 2004.

I think the Horizon scheme is a more difficult nut to crack for HMRC, however that may just make it longer before they finally get there given the aggressive nature of what they are doing.

Legally I'm not sure whether on closure of what they consider a Tax Avoidance scheme HMRC can be retrospective? I think BN66 gave them a hook into a particular mechanism and that what they are claiming to be doing is "clarifying". But I think their objective is to introduce blanket powers, and in BN66 they argue that it's only since April 2004 that the extent of take up of 'avoidance schemes' has come to light. I guy called Neil Jagger who's involved in the BN66 case makes this point.

So it's the old adage about death and taxes; wisdom and hindsight, and from where I'm sat right now the nightmare scenario is that i quietly forget about this, and at retirement age or someway down the line I get a nasty knock on the door, after HMRC finally get the law changed.

I guess my options will be/ are to a) emigrate b) declare myself bankrupt and become a monk or c) sell everything, pay up and end my days in a seedy litlle bedsit somewhere or d) carry on regardless.