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hector ackowldeges they said schema outside dotas but that doesn't mean tax not due

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    hector ackowldeges they said schema outside dotas but that doesn't mean tax not due

    My first post here so bear with me.

    I got a letter today from hmrc saying that although they had already reviewed my scheme and agreed it was outside dotas they have not agreed that arrangements are not taxbale

    I think this is a good thing because they would find it difficult to charge interest or penalties but they can still demand tax.

    Where does this leave me with APNs and FNs?

    #2
    Originally posted by freddiedotas View Post
    My first post here so bear with me.

    I got a letter today from hmrc saying that although they had already reviewed my scheme and agreed it was outside dotas they have not agreed that arrangements are not taxbale

    I think this is a good thing because they would find it difficult to charge interest or penalties but they can still demand tax.

    Where does this leave me with APNs and FNs?
    If its not in DOTAS hey will need to have counteracted the scheme as part of the GAAR to issue an APN or a FN.
    Whoever is supplying your scheme should be able to help you.
    Please note that Hector monitors these threads.

    Oh - and get out of the scheme. It's not worth it.

    Comment


      #3
      Can't emphasise what JBryce said enough - GET OUT NOW and play it straight.

      I used one of these schemes in complete ignorance of what was going on especially in light of Disguised Remuneration etc. Luckily I then did the research and got out. I'm now trying to sort out where I am and trying to set things right so it doesn't hang over me for years. At the end of it all I'll be financially worse off then if I was PAYE and I've now got worries I never had so it was a completely stupid thing to do. But at least I didn't do it for years and spunk the money I earnt and am now facing bankruptcy. Now that's really stupid. You know what the old ones are true and if it sounds too good to be true it really is. Taxes and death - you can't avoid either so you may as well just face them.

      Comment


        #4
        Interest & Penalties

        My understanding is that if Tax due was not paid at the right time, HMRC will charge interest and can charge penalties as well depending on the circumstances.

        Comment


          #5
          Originally posted by jbryce View Post
          If its not in DOTAS hey will need to have counteracted the scheme as part of the GAAR to issue an APN or a FN.
          Whoever is supplying your scheme should be able to help you.
          Please note that Hector monitors these threads.

          Oh - and get out of the scheme. It's not worth it.
          Not quite correct (being pedantic).

          If the scheme has no DOTAS number, HMRC can still issue a FN and then an APN without resorting to GAAR.

          Comment


            #6
            Originally posted by Rob79 View Post
            Not quite correct (being pedantic).

            If the scheme has no DOTAS number, HMRC can still issue a FN and then an APN without resorting to GAAR.
            How can they do that? They would have to succeed in challenging the scheme first, surely. They can't randomly decide to issue FNs and APNs willy-nilly just for the hell of it....
            ....or can they.....

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              #7
              Originally posted by jbryce View Post
              How can they do that? They would have to succeed in challenging the scheme first, surely. They can't randomly decide to issue FNs and APNs willy-nilly just for the hell of it....
              ....or can they.....
              A Follower Notice can be issued where an individual or company is claiming a tax advantage arising from arrangements that have been defeated in another (finally settled) case.

              Once a FN is issued it requires that the individual amends his claim. Failure to amend will lead to an APN being issued.

              For example, in my world there is a tax case called Tower MCashback. Reducing 80 odd pages to one sentence, it was decided that the partnership which acquired software and licensed it on, was not trading. Most attacks on film and IP schemes follow similar lines. HMRC are of the view that Tower can apply to any film scheme. (Obviously I would disagree and that battlefield is being prepared now).

              So no, they don't have to challenge the scheme. It's enough that another case is similar and has lost with no appeal made.

              Comment


                #8
                Originally posted by Rob79 View Post
                A Follower Notice can be issued where an individual or company is claiming a tax advantage arising from arrangements that have been defeated in another (finally settled) case.

                Once a FN is issued it requires that the individual amends his claim. Failure to amend will lead to an APN being issued.

                For example, in my world there is a tax case called Tower MCashback. Reducing 80 odd pages to one sentence, it was decided that the partnership which acquired software and licensed it on, was not trading. Most attacks on film and IP schemes follow similar lines. HMRC are of the view that Tower can apply to any film scheme. (Obviously I would disagree and that battlefield is being prepared now).

                So no, they don't have to challenge the scheme. It's enough that another case is similar and has lost with no appeal made.
                That all sounds a bit cr@p. So HMRC decide if a case is similar to another and then issue an FN on the strength of their own opinion? That's bonkers, at least with DOTAS we all know where we stand.
                Last edited by jbryce; 30 September 2014, 20:49.

                Comment


                  #9
                  Originally posted by jbryce View Post
                  That all sounds a bit cr@p. So HMRC decide if a case is similar to another and then issue an FN on the strength of their own opinion? That's bonkers, at least with DOTAS we all know where we stand.
                  Them's the rules.

                  The way in which DOTAS is being used is certainly NOT what was the original intention.

                  The original plan was to alert HMRC to schemes that had certain characteristics and allow them to take action more quickly.

                  That was fine except that HMRC got flooded with schemes and had not enough people to deal with them and if necessary draw up legislation. Instead DOTAS became a warehouse of potential targets for action which although perhaps not retrospective, was at least long delayed and suffered as a result.

                  One of the (many) frustrating consequences is that the long silence from HMRC between issuing a COP8 etc and actually taking any action has lulled a lot of people into thinking that they've been forgotten or that their position is agreed.

                  So the effect of potentially unfair rules has been made worse by lack of HMRC resource, but in Court all is blamed on the taxpayer.

                  You couldn't make it up.

                  Comment


                    #10
                    I couldn't agree more, but would add that HMRC have plenty of resources (i.e. a vast head count) but they are all largely administrators with little or no tax knowledge. If you get an HMRC person on the phone who knows their proverbial from their elbow you are doing well in my experience.

                    I once executed a will and I called HMRC's trusts and estates department for clarification on a small issue (a rate or a threshold, something stupidly basic) and was told by the person on the phone to consult a third party specialist. That did make me laugh....didn't our contractor loan schemes also consult third party specialists?

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