Reply to: HMRC nudge letter - "Your use of tax avoidance arrangements - an update "

[handyandy]

Got closure notices from HMRC yesterday for Actinium - no amendment to return and no tax due.

see here https://forums.contractoruk.com/hmrc...ml#post2949431

[DealorNoDeal]

As Fred says, once HMRC have opened an enquiry, there is no time limit on when they have to conclude their investigation. They could sit on it for 100 years. The fact that they are citing Covid as a reason for a (15 year) delay suggests even they're a bit sheepish about it but there's nothing you can do about this. The law allows them to take however long they want.

[Fred Bloggs]

I got this letter recently and am another one who was with Actinium in the mid 2000s. I’d be interested to hear what you have to say DealorNoDeal.

I have a meeting with an accountant tomorrow and I guess I am looking at how much HMRC are after in terms of a settlement. I received letters about an enquiry being opened back in 2007 but haven’t heard anything from HMRC since, so this has come out of the blue.

Isn’t there some 4, 6 and 20 year time limit on enquiries? My understanding was that it was only 20 years if HMRC are claiming dishonesty. I guess that’s quite objective, but given I was following the advice I was given at the time, it certainly wasn’t dishonesty on my part, I thought I was in a scheme which followed regulations.

The enquiry opened in 2007 has no natural expiry date. Time to pay up, I would say. Despite what you were told and believed, the scheme was a tax avoidance vehicle. In the end, you are the person responsible for paying the correct tax on your income, not the scheme. Your accountant can help you check that what HMRC are saying is correct. Conventional wisdom these days is that it's a futile fight if you want to challenge the demand for unpaid tax.

[uffe]

I got this letter recently and am another one who was with Actinium in the mid 2000s. I’d be interested to hear what you have to say DealorNoDeal.

I have a meeting with an accountant tomorrow and I guess I am looking at how much HMRC are after in terms of a settlement. I received letters about an enquiry being opened back in 2007 but haven’t heard anything from HMRC since, so this has come out of the blue.

Isn’t there some 4, 6 and 20 year time limit on enquiries? My understanding was that it was only 20 years if HMRC are claiming dishonesty. I guess that’s quite objective, but given I was following the advice I was given at the time, it certainly wasn’t dishonesty on my part, I thought I was in a scheme which followed regulations.

[DealorNoDeal]

If the scheme users want me to reveal what I think HMRC are doing, I will. I don't think I'd be handing anything to HMRC because it's pretty damn obvious.

Alternatively, PM me.

[DealorNoDeal]

+1 - hardly surprising the letters have gone out now given how it worked and a recent appeal result.

Initially I thought it might have something to do with Hoey but now I'm not so sure. I think there is something far more obvious.

[eek]

I think I can guess what HMRC are up to. It only dawned on me when I searched the entire HMRC Scheme Enquiries forum and came across something that happened with this scheme.

I'm not sure I should say what it is just in case it's tempting fate.

+1 - hardly surprising the letters have gone out now given how it worked and a recent appeal result.

[DealorNoDeal]

I think I can guess what HMRC are up to. It only dawned on me when I searched the entire HMRC Scheme Enquiries forum and came across something that happened with this scheme.

I'm not sure I should say what it is just in case it's tempting fate.

[cojak]

Yes that is the IOM companyI used but I think you may be confusing it with another scheme called AML that HMRC did aggressively pursue. To the best of my knowledge they have never actively pursued Actinium schemes in the last 17 years. HOwever, if you have any specific details where they have I’d be interested to know and if any other Actinium users have ever heard anything more form HMRC.

Well here’s another poster from a couple of years ago…

Hi

My wife received what appears to be a standard/generic letter regarding the loan charge review, with various pieces of advice on what to do next etc.

However. . . . .

This is completely out of the blue, she has never received any such letter in the past, and to go a step further we don't even know what the "loan charge" is (apologies for being a complete numpty)?

For background I did about 10 years as a contractor (have been permanent for the last 10 years) mostly via ltd company in the early years, then via an umbrella, with 2 years under what I guess the HMRC would class as a scheme (Consulting Overseas, Actinium) in 2004/06 with my wife as a shareholder in 2 x offshore BVI companies. However I don't recall it being any kind of loan scheme, we were paid dividends IIRC. My wife is full time nurse and has only ever had to complete SA for the years 04/06 and has been permanent for the NHS all her life.

Could HMRC just have sent this letter out by mistake, or could it be that how I worked back in 2004 was some kind of loan scheme to which they are referring to?

I know previous schemes by Consulting Overseas (Sandfield?) have been subject to HMRC investigation but I'm not aware of anything related to Actinium.

Any advice (and an explanation of what a "loan charge" is would be most appreciated.

Regards

[DealorNoDeal]

...during the period 2005 - 2007...

I hate to be the bearer of bad news but if you settle those tax years you're looking at a hefty amount of late payment interest on top.

Approximate rates:
2005/6 ... 58%
2006/7 ... 50%

Eg. if your assessed tax/nics liability for 2005/6 was £20,000, then the interest would be another £11,600 ie. total amount owed £31,600

[Fred Bloggs]

Fred Bloggs , thanks for the response. Yep that was kinda where my head was. Is there any recommendations of such profession help, or should I just seek help from my current accountants. I'm assuming there must me people that specialise in this kind of thing?

Please refer to DealorNoDeal's response, I agree with it.

Take a look around here for suggested advisers in this space. It would be worth calling one to see how the land lies, it was always the case that the initial call was with no charge or obligation to continue engaging them. I don't know if that's still the case. Only one way to find out is to call and ask.

I think you're probably better off settling rather than going into a dispute. There's only going to be two winners there. The adviser and Hector.

If you need help settling, your accountant can help you, most likely. You may wish to request a payment plan as suggested depending on your finances.

[Fred Bloggs]

You only have two choices:
(1) appeal and fight against it
(2) settle

You can do (2) yourself or use your current accountant. If you can't afford to pay in one go, ask HMRC for a payment plan (time to pay).

Personally I'd forget about (1). I don't know of anyone using a contractor avoidance scheme in the past 20 years who has successfully fought HMRC. The odds are stacked massively against you, and litigation is horrendously expensive.

+1. I agree.

[DealorNoDeal]

Fred Bloggs , thanks for the response. Yep that was kinda where my head was. Is there any recommendations of such profession help, or should I just seek help from my current accountants. I'm assuming there must me people that specialise in this kind of thing?

You only have two choices:
(1) appeal and fight against it
(2) settle

You can do (2) yourself or use your current accountant. If you can't afford to pay in one go, ask HMRC for a payment plan (time to pay).

Personally I'd forget about (1). I don't know of anyone using a contractor avoidance scheme in the past 20 years who has successfully fought HMRC. The odds are stacked massively against you, and litigation is horrendously expensive.

[DealorNoDeal]

I got one of these nudge letters a few weeks back, not knowing what it was to do with I contacted HMRC, they have come back and said it was related to "Actinium Dividend" during the period 2005 - 2007. In this period I contracted through Actinium, a management company that I became an employee of. Their structure saw income split with a proportion being paid as salary to the contractor and the remainder invested into a company in which the contractor was a share holder and received dividends. This was my first contract and it didn't seem sus to me at the time, not so sure now, despite all the assurances this was an HMRC approved solution

Any one else in this situation? If so how are you planning to proceed?

That's the second mention of that scheme here in the past couple of weeks, and I bet it's not a random coincidence.

I would brace yourself for something unpleasant on the horizon.

Another thing that may not be a coincidence is the timing. It sounds like HMRC have sat on this scheme for well over a decade, so why are they resurrecting their investigation now? They only thing I can think of is the appeal court ruling in Hoey last month. Maybe ns1 above was right and this is a Hoey based attack.

[BlueSquid]

Fred Bloggs , thanks for the response. Yep that was kinda where my head was. Is there any recommendations of such profession help, or should I just seek help from my current accountants. I'm assuming there must me people that specialise in this kind of thing?