Originally posted by NeedTheSunshine
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TO THE COMMISSIONERS FOR HER MAJESTY'S REVENUE AND CUSTOMS ("HMRC")
The tax ("Tax") and National Insurance contributions ("NICs") on the statement in Appendix 1 is unpaid, wholly or in part, because of my failure to meet all of my statutory obligations.
If the terms of this offer are accepted, it is confirmed that the agreement (the "Agreement"):
(a) removes the tax advantage so that Condition E within section 23A of the Income Tax (Trading and Other Income) Act ("ITTOIA") 2005 is not met and a future charge to tax and National Insurance contributions as a result of a relevant benefit within paragraph 1 of schedule 12 to the Finance (No. 2) Act 2017 (the "Trading Income 2019 Loan Charge") will not arise in relation to the Payments from trading income schemes listed in Appendix 2;
(b) is within paragraph 21(4) of Schedule 12 to Finance (No.2) Act 2017 so that I will not have to provide the "loan charge information" for the purpose of the Trading Income 2019 Loan Charge in connection with the Payments from trading income schemes listed in Appendix 2;
(c) reflects HMRC's published settlement terms, according to which HMRC will not pursue me for any tax or National Insurance contributions on fees paid to third parties in connection with the Payments listed in Appendix 2;
(d) concludes HMRC's enquiries into the Payments listed in Appendix 2 and settles any assessments in so far as they relate to those Payments.
For the avoidance of doubt the Agreement will not apply to any tax years, disguised remuneration schemes, sums or payments (whether in the form of loans or otherwise) that are not included in Appendix 2.
I acknowledge that the Agreement does not constitute a relevant defeat for the purposes of the serial tax avoidance legislation at Schedule 18 to the Finance Act 2016.
On the basis that no proceedings are taken against me for the Tax or NICs on the statement in Appendix 1, or for the interest on it
I Joe Bloggs
of Someplace, SOMETOWN, SM1 2YZ
offer the sum of £5,000.00 ("the Settlement Amount")
The balance of £5,000.00 will be paid within 30 days of the date of your letter accepting this offer.
If the Settlement Amount has not been paid by that day, interest at the rate which applies for Section 86 Taxes Management Act 1970, which may be varied from time to time, will also be payable on any unpaid balance from that day. This interest will be payable without deduction of tax and shall not be claimed or allowed as a deduction in computing any income, profits or losses for any tax purposes.
If any part of the Settlement Amount is not paid within 14 days of the due date, HMRC may:
(a) seek recovery of the outstanding balance of the Settlement Amount together with interest, under the Agreement; and/or
(b) treat the Agreement as terminated.
Where HMRC treat the Agreement as terminated, I will be treated as never having agreed terms with an officer of Revenue and Customs for the purpose of paragraph 21(4) of Schedule 12 to Finance (No.2) Act 2017, meaning that I have to provide the "loan charge information" for the purpose of the Trading Income 2019 Loan Charge in connection with the Payments from trading income schemes listed in Appendix 2. Furthermore, Condition E within section 23A ITTOIA 2005 will apply as if the tax advantage had not been removed, meaning that the Trading Income 2019 Loan Charge will apply to the Payments from trading income schemes listed in Appendix 2.
This offer and any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with it or its subject matter or formation shall be governed by and construed in accordance with the law of England and Wales.
The courts of England and Wales shall have exclusive jurisdiction to settle any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with this offer or its subject matter formation.
Any payments made under the Agreement prior to it being terminated may be treated as a tax charged within the meaning of section 23H ITTOIA 2005.
I undertake not to take any action with a view to obtaining repayment from HMRC of any part of the Settlement Amount including but not limited to making a claim under:
a) Schedule 1AB (Recovery of overpaid tax etc) of the Taxes Management Act 1970;
b) regulation 52 (Return of contributions paid in error) of the Social Security (Contributions) Regulations 2001; or
c) common law.
Signed............................................ ... Date.............................
APPENDIX 1
Statement of Income Tax and National Insurance Contributions
| Year | Statement of Income Tax | NICs | Interest |
| 2014-2015 | £1,800.00 | £500.00 | £200.00 |
| 2015-2016 | £1,800.00 | £500.00 | £200.00 |
APPENDIX 2
Payments covered by the Agreement being payments made to or in respect of me, whether in the forms of loans or otherwise, in connection with trading income disguised remuneration schemes
| Year | Scheme | Payment |
| 2014-2015 | Winchester Self-Employed | £15,000 |
| 2015-2016 | AML Self-Employed | £15,000 |
Settlement Factsheet
If you settle now under the current terms:
You may pay a lower rate of tax on the sums you recieved in the form of loans.
The April 2019 charge will NOT apply to you provided you have not excluded any loans or disguised remuneration schemes from your settlement. You will not have to report any loan details in your Self-Assessment return for 5 April 2019.
You can choose to make voluntary restitution for loans received in years which are not currently subject to an open enquiry or assessments and HMRC is now outside of the time-limits to make an assessment. This will mean that you pay income tax only, no late payment interest is charged.
The enquiries will be closed and/or the assessments will be settled.
You will NOT be asked to pay tax on any fees paid to a person abroad as part of your use of Contractor Loans arrangements.
You will have certainty about settlement terms. The settlement terms may not be available if the scheme moves to litigation.
You will not incur the extra costs which result when a scheme moves to litigation.
However, if you settle only the protected years (which are years with an open enquiry or an assessment or years where HMRC is still in time to make an assessment) or exclude the use of other disguised remuneration schemes from your settlement, any loans from these schemes would not get any relief from the future charge arising in April 2019, unless theses loans are repaid in money or have been taxed as income before then.
If you do not settle under the current terms:
Any enquiries and assessments opened will remain in place and interest will continue to accrue on any tax which has not been paid.
You may pay more by waiting for the loan charge because the loan charge will add all your outstanding loans together and tax them in one year.
The April 2019 loan charge will apply to all outstanding loans regardless of whether the year in which the loans were received is currently subject to an open enquiry or assessment.
It is HMRC's view that tax is also due on any fees paid to a person abroad as part of you use of Contractor Loans arrangements. It may be that we ask users of these arrangements to pay tax on fees as part of settlement, or that other terms of settlement change. This would no affect anyone who has already agreed on a binding settlement.
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