Questions - please keep the answers simple

**webberg** · 1 August 2018, 17:24

Originally posted by a5878170 View Post

So I'm in a situation where a company I used is no longer in existence.

This company drafted me letters to send to HMRC and I got their investigations suspended for two different accounting years.

I received the blanket 'Contractor Loans' letter last week.

I've read the other threads on the forum and still confused.

I think there has been a law change and I have to pay the amounts HMRC say I owe them. No change of law, but a new law which says that unless you settle the years in question, you will get a tax charge in 18/19 calculated by adding your loans to your income for that year and taxing the aggregate.

They say I owe the following Who is "they" and how have they calculated the tax due?

2006/2007 - £10,000
2007/2008 - £12,000

I'm confused what my options are? You can settle, litigate or join something like Big Group which has a strategy to reduce the liability, but no guarantee.

1. If I contact them and pay back £22,000. Is that it? Is there any additional money they can claim (interest)? Will they want any other info from me? Interest will be due. On those numbers, perhaps another £8,000. Once you sign a contract though, you should be pretty safe. If IHT is due, you may owe a little more and that may not be known until the loans are finally dealt with. So yes, HMRC may want more info.

2. If I contact them and want to pay back £22,000 over 5 years, what is the interest charge? Is that it? Is there any additional money they can claim (interest)? Will they want any other info from me? See above. Interest on late paid tax is 3% at present, simple. If you pay in instalments, 4%.

3. Ignore the letter. They want to scare people like me. They will never win in court. Do not ignore it. The penalty for deliberately ignoring your legal obligations are stiff and HMRC will pursue you. They may not win in Court, who knows, but can you afford to take them there? That is a journey of perhaps 5 years and may cost more than £1m.

Also

1. Why do people contact Phil? What can he do? Phil is a tax adviser with experience in settlement with HMRC. I am also a tax adviser and whilst we do arrange settlement, that is not our primary objective. He (and I) can help you understand your options, the costs, negotiate a TTP, etc.

2. Why are people writing to their MP? What can they do? MPs can change the law and tell HMRC that they are being grossly unfair, putting people's lives at risk and ignoring the big businesses who benefit from the schemes.

Thanks

Hope this helps.

**piebaps** · 2 August 2018, 09:55

Originally posted by a5878170 View Post

1. Why do people contact Phil? What can he do?

I usually rationalize it as;

If I want my car fixing and I'm a mechanical disaster, I go to a garage.
If I need my house rewiring and I'm electrically incompetent, I ring a sparky.
If I don't understand tax law and need some help..........................you can guess the rest.

Phil and Webberg both offer services and are well thought of by many on these pages. There are of course other advisors available. Remember though that advice isn't free. It may bring peace of mind, it should ensure that you don't do anything stupid (or if you do, you only have yourself to blame) and it doesn't mean a lower settlement.

Questions - please keep the answers simple