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Calculating Potential APN

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    #11
    Originally posted by webberg View Post
    Only when the final tax position has been settled (5 years from now if you're lucky) can interest etc be calculated. Penalty depends on behaviour, not tax liability..
    Thanks for the reply. Could you clarify the 5 year part?

    Is this 5 years from paying the APN? Or from when the tax event or period occurred?

    Is there a limit to how far back the HMRC can go to retrieve tax?

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      #12
      Meaning one HMRC have the money they will move at snail speed - 5 years if u r lucky otherwise yr kids will inherit it😳

      Comment


        #13
        Originally posted by StrengthInNumbers View Post
        Meaning one HMRC have the money they will move at snail speed - 5 years if u r lucky otherwise yr kids will inherit it��
        Agree.

        Considering it's taken HMRC 7 years to try to get money from us NTRT'ers, I imagine trying to get the money back from HMRC will be a lot longer than 7 years.

        As StrengthInNumbers says, think, writing it into your will to ask your children to follow it up!
        'Orwell's 1984 was supposed to be a warning, not an instruction manual'. -
        Nick Pickles, director of Big Brother Watch.

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          #14
          Originally posted by SantaClaus View Post
          Agree.

          Considering it's taken HMRC 7 years to try to get money from us NTRT'ers, I imagine trying to get the money back from HMRC will be a lot longer than 7 years.

          As StrengthInNumbers says, think, writing it into your will to ask your children to follow it up!
          Uh, so basically HMRC sit on the money. Should in the future you are entitled to the money back, HMRC pay it back to you. The repayment may take years.

          If you receive an APN but participate in a JR - do you still have to pay the APN?

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            #15
            Originally posted by dmuk View Post
            If you receive an APN but participate in a JR - do you still have to pay the APN?
            I understand around 100 participants in the Pinsent Masons JR have had their APNs suspended. I don't know if they were all named in the JR application or if Pinsent took out a temporary injunction to have the APNs suspended.

            This is probably the only way to get APNs delayed for an extended period.

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              #16
              Originally posted by dmuk View Post
              Uh, so basically HMRC sit on the money. Should in the future you are entitled to the money back, HMRC pay it back to you. The repayment may take years.

              If you receive an APN but participate in a JR - do you still have to pay the APN?
              The money is only repayable after a final judicial decision has been made. If HMRC loses at the FTT and the UTT, it is likely to be after the Supreme Court. The judicial process can take many years, which could cause many taxpayers irreparable financial damage as HMRC hold onto the cash, which could lead to bankruptcy. The miserly rate of interest HMRC is required to pay in these circumstances would not even begin to compensate you.
              Join Big Group - don't let them get away with it
              http://www.wttbiggroup.co.uk/

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                #17
                Originally posted by flamel View Post
                The money is only repayable after a final judicial decision has been made. If HMRC loses at the FTT and the UTT, it is likely to be after the Supreme Court. The judicial process can take many years, which could cause many taxpayers irreparable financial damage as HMRC hold onto the cash, which could lead to bankruptcy. The miserly rate of interest HMRC is required to pay in these circumstances would not even begin to compensate you.
                I should add that even if you win at the FTT, HMRC have the power to apply to the relevant tribunal or court to deny a successful appellant repayment of their tax on the ground of ‘protecting the revenue’....
                Join Big Group - don't let them get away with it
                http://www.wttbiggroup.co.uk/

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                  #18
                  For what it's worth, my take on the time line and payments is as follows.

                  Many people took part in the schemes from perhaps the early 2000's.

                  It took HMRC some time to realise this and from what I've seen it appears that they have missed the boat in terms of opening enquiries into some early years. (I'm not going to discuss time limits for opening enquiries here - see other threads).

                  In 2004 the DOTAS regime arrived. This required schemes to be registered with a presumption (so far untested) that a tax advantage (tax on income being delayed, deferred or eliminated) was equal to avoidance.

                  In 2006 the DOTAS regime got a major overhaul and many more schemes that had previously escaped (whether legally or not remains to be seen) were registered.

                  Around this time HMRC started opening enquiries into tax returns. This appears to have been patchy.

                  In 2008 HMRC persuaded Government to introduce retrospective taxation of some schemes that were reliant upon a double tax treaty.

                  From around that time, HMRC started looking at all forms of what might be loosely described as disguised remuneration. In particular schemes involving offshore employer intermediaries, dual contracts, remuneration trusts and employee benefit trusts (EBT) came under the spotlight.

                  As usual, HMRC struggled to understand that a lot of this activity was driven by ill advised legislation and heavy handed inflexible rules such as IR35 and others. The storm that broke in 2007/08 was started in the late 1990's and HMRC cannot and should not be forgiven for not keeping their eye on the ball.

                  Instead HMRC inactivity permitted two things. First, a number or providers emerged offering schemes that promised "compliance" but 90% take home pay and second; because enquiries from HMRC were at best inconsistent, many users came to believe that they were "safe" from adjustment. Both of these were and are untrue.

                  HMRC began a journey into litigation against contractors with mixed results. The Arctic Systems case was prosecuted beyond reasonableness and HMRC lost. They spent a year after that promising "corrective" legislation which has still not been seen. Boyle they won but has narrow facts. Murray Group (Rangers) is still in process but it does not look good for HMRC.

                  Last year the Government was persuaded to introduce a "pay now, argue later" system. HMRC can decide that an amount of tax is in dispute and will demand it. There is no appeal available. Failure to pay carries significant risk.

                  This is pretty much where we are today.

                  The next steps will be to see more individual cases go to litigation because the settlement offer for most contractors is not attractive and no amount of individual or group pressure will make it any better. Only by forcing a change of analysis through long discussion and probably Tribunal appearance will HMRC see that they have little chance of attracting large numbers.

                  Litigation (JR) on APN etc is a sideshow. Important but at best a temporary delay will be achieved. Government policy is clear and APN in its present form or amended is here to stay.

                  Litigation timetable is very much in the gift of provider of scheme and HMRC. The usual process is HMRC asking for information (perhaps up to 4 years depending upon cooperation) and then to consider what they have which is another year.

                  HMRC will choose a weak case and litigate. That may require 1 to 2 years to get a hearing date at First Tier. From there, the process is Upper Tier, Court of Appeal, Supreme Court. Perhaps ECJ but unlikely as tax is one of those issues where sovereign jurisdiction is permitted.

                  That process from First Tier to Supreme Court is perhaps 5 years and £1m+. A loss risks paying HMRC's costs as well.

                  I understand that some contractor cases will be in First Tier this year (I'm sure others here have better information).

                  Hence my comment about paying an APN now and waiting perhaps 5 years to see if it was the "right" amount.

                  Once the litigation process ends, HMRC will either calculate final tax and interest and send a demand. Penalty might also be applied.

                  If the litigation result is that no tax is due, or less tax than paid under the APN, then they MUST repay. There is no mechanism allowing them to hold on to tax that is not due. I therefore very much DO NOT buy in to those here who say that once the money is paid, it can NEVER be returned and that HMRC will use "tricks" to keep it.

                  Short of a revolutionary change in litigation that has consequences too big to consider at this time in the morning, HMRC cannot keep funds that they are not legally entitled to.

                  Hope that helps.

                  A very brief attempt to explain the timelines here. I'm sure others can contribute colour and perhaps correct obvious errors.
                  Best Forum Adviser & Forum Personality of the Year 2018.

                  (No, me neither).

                  Comment


                    #19
                    Originally posted by flamel View Post
                    I should add that even if you win at the FTT, HMRC have the power to apply to the relevant tribunal or court to deny a successful appellant repayment of their tax on the ground of ‘protecting the revenue’....
                    True but only where a judge agrees that HMRC has a reasonable case on appeal.

                    If the judge thinks an appeal will not be granted or has little chance, he/she will deny the application.

                    If there is by then a weight of cases in the taxpayers favour, the chance of judgement for HMRC is low.
                    Best Forum Adviser & Forum Personality of the Year 2018.

                    (No, me neither).

                    Comment


                      #20
                      Hmmm... so should I expect the APN amount to be the same as the tax payable amount in my settlement calculation (ie, tax payable on loans / income and no interest)?

                      Or might the APN amount be totally different? (higher)

                      [The loans amount Hector used for my settlement calculation is pretty much accurate.]

                      Thanks

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