Horizon-Tec

[pimpernell]

Hi,

I've had two COP 8s from HMRC - one in November 2007 and the last yesterday, investigating tax years 2005-2006, and 2006-2007 when engaged with Horizon.

They were Isle of Man based operating a Foreign Currency Loan scheme with a trust in the Channel islands.

Both letters from SCI have said that they will be investigating my tax returns for these years, but since receving the letter in Nov 2007 until yesterday I hadn't heard anything.

Has anybody else out there had any communications with HMRC regarding their time with Horizon? Does anyone know what's happened to the Horizon people? Last I heard they were decamping to Cyprus.

Are there other people out there in a similar situation?

Am I toast?

[dezze]

Hi,

I've had two COP 8s from HMRC - one in November 2007 and the last yesterday, investigating tax years 2005-2006, and 2006-2007 when engaged with Horizon.

They were Isle of Man based operating a Foreign Currency Loan scheme with a trust in the Channel islands.

Both letters from SCI have said that they will be investigating my tax returns for these years, but since receving the letter in Nov 2007 until yesterday I hadn't heard anything.

Has anybody else out there had any communications with HMRC regarding their time with Horizon? Does anyone know what's happened to the Horizon people? Last I heard they were decamping to Cyprus.

Are there other people out there in a similar situation?

Am I toast?

Have you been in contact with Horizon? I think that is your first course of action.

Also, if the last one was for 2006-07, haven't HMRC missed the boat? I thought they would have until Jan 09 to query this?

[DonkeyRhubarb]

This is something you really have to watch with these schemes.

There can be a considerable lag between using a scheme and HMRC coming knocking, and there is no guarantee that the promoter will still be around when you need them, irrespective of any guarantees you were given that they would defend any investigation on your behalf.

If anyone is determined to use a scheme, make sure the company is not a fly by night outfit. Things to check include:

1) was the company set up just to run the scheme or do they have other lines of business?
2) how long have they been around? how big are they?
3) if the scheme closed, is the company likely to disappear with it?

I have used 2 schemes in the past. One was operated by Montpelier who are a large international company with interests in lots of pies. They have a reputation to protect and the resources to defend their arrangements through the courts.

The other, Actinium, disappeared in a puff of smoke after the MSC legislation came in. By the time HMRC came sniffing around, they were long gone.

I'm not happy about being under investigation with the Montepelier scheme, but at least they are still around and putting 100% into fighting HMRC.

PS.
I only know of two other companies, apart from Montpelier, who have stuck by their clients when HMRC came calling :
- Steed
- deGraaf

[sal626]

Good points DR.

Would also add ASMG to that list. I was with them 05-07. They are sticking around and defending the EBT scheme as well. But like horizon – after the initial letter, nothing has really happened….

Is Actinium under investigation/query as well? Have you heard anything from Hector on that front? I suspect nothing much has happened there as well.

[DonkeyRhubarb]

Is Actinium under investigation/query as well? Have you heard anything from Hector on that front? I suspect nothing much has happened there as well.

Yes. I had a letter from HMRC on 10th Jan 2008, saying they were putting my 05/06 return under enquiry. I've not heard a peep out of them since.

It's disgraceful that they can put you under enquiry and then leave you hanging for 20 months without so much as a courtesy letter to let you know what they are doing.

[pimpernell]

original post slightly wrong

I got my facts wrong in my original post.

The two letters I've had were in Nov 2007 for the 2006-2007 tax year, and yesterday for the 2007 and 2008 tax year.

I jumped from Horizon in April 2007, but there was one month hanging over into the 07-08 tax return which has been picked up on in the 07-08 tax return.

The 2006-2007 tax year i was involved with Horizon for 12 months.

What was it that someone said about a 20 month period for an investigation to start? Are these the rules? Is it 20 months from the letter of intent to investigate or 20 months from the end of the tax year concerned? If that's the case and if they haven't started an investigation by either january 2010 or July/ August next year on that basis, I can ask them to close the enquiry? Is that how it works?

I've been told that unless they find against me, they can't open up previous years tax returns too.

I've been told that by issuing a new letter to me they are effectively keeping the 'case open', and now I guess for another year. Sensibly, I came 'back into the fold' in April 2007 and since July 2008 have been a permie, but i wouldn't mind knowing when I could relax in terms of the threat of investigation.

Anyone know the protocol?

[DonkeyRhubarb]

Anyone know the protocol?

Opening an enquiry (COP 8) is the same as an investigation.

As far as I can tell, there is no time limit for HMRC to conclude enquiries. For example, enquiries into my 2001/2 tax return are still open.

Unless they tell you that they have closed the enquiry, then it is still open, even if you haven't heard from them for months/years.

It is disgraceful that they can behave like this, especially now there is a disclosure regime for tax avoidance schemes, but hey they make up the rules.

I believe you could force their hand by requesting that the case be referred to the Commissioners (Tribunal) but that would be a bold step, and you would need to hire legal representation.

Another thing you could do when enough time has elapsed is make an official complaint to HMRC.

Not many people know this, but being jerked around by public bodies is also something you can complain to your local MP about. You can contact your MP through www.writetothem.com, and you will need to supply your NI number for them take it up with HMRC.

[DonkeyRhubarb]

No time limit on enquiries

It appears there is nothing in theory to stop HMRC keeping enquiries open indefinitely.

http://www.hmrc.gov.uk/manuals/insmanual/INS8275.htm

Section 9a - Power to enquire into returns

The enquiry can remain open until such time that HMRC is ready to close it by notice in writing, though the taxpayer under Section 28A(6) can seek an earlier completion date – before the Commissioners if necessary.

[pimpernell]

Hmmmm - if only

So for those interested what I now understand is happening that the SCI COP 8 I received pinpoints the last tax return when I had anything to do with Horizon.

So in the event of the law changing to the point where the Horizon scheme becomes illegal, the COP8 leaves the door open for them to come knocking at any time, if the law is made retrospectively

BN66 has been made retrospective to 1987 based on schemes misinterpretation of something that was already in law. What I now need to worry about is whether in the event of the Horizon scheme becoming illegal, that can be made retrospective, to say April 2004.

I think the Horizon scheme is a more difficult nut to crack for HMRC, however that may just make it longer before they finally get there given the aggressive nature of what they are doing.

Legally I'm not sure whether on closure of what they consider a Tax Avoidance scheme HMRC can be retrospective? I think BN66 gave them a hook into a particular mechanism and that what they are claiming to be doing is "clarifying". But I think their objective is to introduce blanket powers, and in BN66 they argue that it's only since April 2004 that the extent of take up of 'avoidance schemes' has come to light. I guy called Neil Jagger who's involved in the BN66 case makes this point.

So it's the old adage about death and taxes; wisdom and hindsight, and from where I'm sat right now the nightmare scenario is that i quietly forget about this, and at retirement age or someway down the line I get a nasty knock on the door, after HMRC finally get the law changed.

I guess my options will be/ are to a) emigrate b) declare myself bankrupt and become a monk or c) sell everything, pay up and end my days in a seedy litlle bedsit somewhere or d) carry on regardless.

[DonkeyRhubarb]

So in the event of the law changing to the point where the Horizon scheme becomes illegal, the COP8 leaves the door open for them to come knocking at any time, if the law is made retrospectively

They don't have to rely on changing the law retrospectively.

If they feel they have got a chance of winning based on the existing law, as it stands, they can take a case to a Tribunal. One tax professional I spoke to said that it's now HMRC's policy to take legal action if they think they have at least a 50/50 chance of winning.

You should try and get in touch with Horizon to find out what the status of the investigation is. Typically, in these situations, HMRC will put everyone using the scheme under enquiry but only pursue one or two test cases.

Incidentally, did Horizon used to go under the name Castlemaine? I knew a lot of people in the Castlemaine scheme and I believe there were as many as 2000 contractors using it.