To Settle or Not To Settle... That is the Question...

[derekdunn1873]

As I am nearing the end of the settlement "opportunity" I am in 2 minds over what to do...

Thankfully my amount is low, and the money is already sitting in the UK bank account to do with what I decide.

As a USA based person (permanent) I am not that bothered about IHT, so the settlement does not look as bad for me as for others, however me deciding to tell HMRC that I will just put the money in a Certificate of Deposit and wait until the day in court comes for my scheme may be a better idea...

I have spoken to one of the more knowledgeable posters on here, and they seem to suggest that the Certificate of Deposit route may be an option worth seriously considering.

I am not overly worried about penalties, as I have been pretty compliant with HMRC through this debacle, and the threat of NI will only add a small amount.

My only real worry with not settling is that they will go digging in my tax affairs and make my life a general misery by doing so. To be honest, I am not sure they are not going to do that anyway...

What are everyone's thoughts on this and their own situations?

[BrilloPad]

So you were in a loan scheme 2010-2011?

Do you have an APN? What are the settlement terms?

Generally the advice is to pay APN if you have one. Else get a CTD.

[derekdunn1873]

So you were in a loan scheme 2010-2011?

Do you have an APN? What are the settlement terms?

Generally the advice is to pay APN if you have one. Else get a CTD.

Yes, 2010-2011 tax year

No APN

I haven't discussed settlement terms in depth, however they basically said they would want 50% of the balance up front and the rest over 2 years, however as the cash is sitting waiting, I would just clear in one go...

[StrengthInNumbers]

Personally I see no benefit in settlement. Pay APN and wait for HMRC to lose in courts and get money back

[derekdunn1873]

Personally I see no benefit in settlement. Pay APN and wait for HMRC to lose in courts and get money back

I haven't received an APN, and as was a non DOTAS scheme I doubt I ever will...

I am glad you are so confident the HMRC will lose... I am confident, but less confident and think that they will drag this out for decades if necessary, changing whatever laws they need to change along the way. I do feel that we may end up all paying nothing or a different settlement offer down the road, however am not 100% sure!

[regron]

I haven't received an APN, and as was a non DOTAS scheme I doubt I ever will...

I couldn't disagree with you more here. If you really think HMRC will not go after non-DOTAS anytime soon, then fair plays to your positivity, but I would put my house on you being wrong.
Also, if you are that confident you never will, then why settle at all ?

[webberg]

My opinion is that in the majority of instances, settlement on the terms currently offered, is not advisable.

There are too many loose ends and you are being asked to accept an argument that HMRC has been unable to convince a Court of.

That said, if the present approach fails, HMRC will certainly turn to other avenues. This is (again, my opinion) because they have told Government that there is money to be collected and if the "loan = income" route fails as it looks like it will, then they will try others.

I would not be as confident that the IHT charge will pass you by either.

My advice is that you should buy a certificate of tax deposit and then wait the outcome of the inevitable fight.

If you want to influence that fight, join a group.

If you want to "suffer the slings and arrows of outrageous fortune" on your own, so be it.

[StrengthInNumbers]

Exactly what I have done. Brought certificate of tax deposits and waiting for courts to decide. HMRC has already fallen back to ToAA from loan=income. Each fall back case becomes weaker most probably.

[webberg]

Exactly what I have done. Brought certificate of tax deposits and waiting for courts to decide. HMRC has already fallen back to ToAA from loan=income. Each fall back case becomes weaker most probably.

More importantly, if the "loans=income because it's a tax avoidance scheme" argument fails all the way to the end of the judicial process, AND a new argument is rolled out, then a Court may think "well that's two arguments on the correct treatment, so how many more might there be?"

I have identified at least 4 (maybe a dodgy 5th and 6th as well), and once the HMRC line has been breached, they will have little choice but to listen to others.

They will resist and they will kick back but ultimately if the arguments are valid on the facts, they will have some weight.