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Thread: Time to Pay

  1. #1

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    Default Time to Pay

    HMRC have, as most will know, recently offered a 5 year time to pay for those earning under 50k in 18/19 if you are a victim of their loan charge nonsense. May I remind people that this is a minimum and if you cant afford it (and quite frankly who can?) then please remember its a starting point of the negotiation. I don't mean that as a sales push - any decent advisor will achieve the same (and if you're looking for other advisors other than myself then WTT are v well experienced). In our (DSW) opinion, its not HMRC being generous or kind, its HMRC responding to the increasing (and rightly so) pressure they are facing and they have to show something.
    Reason I mention this today is that I have heard that it is being strongly implied by HMRC (when individuals phone them) that this is the only option possible. This is not true, if you cant afford it then don't agree it and remember - they can't get blood from a stone.

  2. #2

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    Default TTP

    Hi Phil, Can you give out any guidance on what factors are used to determine TTP please? What can we do when attempting to negotgiate to get the best deal?
    How is the calculation worked out by HMRC - is is based on disposable income? Are we expected to sell our assets eg car/house/investments?

    Also, if we can’t agree an amount but I just start to pay what I can afford what will happen then?
    Last edited by Clairol; 26th July 2018 at 06:12.

  3. #3

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    Default

    Quote Originally Posted by phil@dswtres View Post
    HMRC have, as most will know, recently offered a 5 year time to pay for those earning under 50k in 18/19 if you are a victim of their loan charge nonsense. May I remind people that this is a minimum and if you cant afford it (and quite frankly who can?) then please remember its a starting point of the negotiation. I don't mean that as a sales push - any decent advisor will achieve the same (and if you're looking for other advisors other than myself then WTT are v well experienced). In our (DSW) opinion, its not HMRC being generous or kind, its HMRC responding to the increasing (and rightly so) pressure they are facing and they have to show something.
    Reason I mention this today is that I have heard that it is being strongly implied by HMRC (when individuals phone them) that this is the only option possible. This is not true, if you cant afford it then don't agree it and remember - they can't get blood from a stone.
    My understanding of the £50,000/5 year rule is that it applies to settlement only.

    If you choose instead to go through the loan charge process and a loan charge liability arises, then payment will be enforced in accordance with DM practice.

    Would you agree Phil?
    Best Forum Adviser & Forum Personality of the Year 2018.

    (No, me neither).

  4. #4

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    Quote Originally Posted by webberg View Post
    My understanding of the £50,000/5 year rule is that it applies to settlement only.

    If you choose instead to go through the loan charge process and a loan charge liability arises, then payment will be enforced in accordance with DM practice.

    Would you agree Phil?
    What about if you settled open years and left closed for the loan charge, any views?

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    Quote Originally Posted by webberg View Post
    My understanding of the £50,000/5 year rule is that it applies to settlement only.

    If you choose instead to go through the loan charge process and a loan charge liability arises, then payment will be enforced in accordance with DM practice.

    Would you agree Phil?
    Hi Webberg, Yes v much so, i fully agree, though I may have an update tomorrow as i've addressed the matter on behalf of a number of clients as its clearly ridiculous. If somebody has say a debt of £120k and a salary of £40k then in my opinion (and I'm sure everybody's other than HMRCs), it makes no difference what caused that debt or whether or not settlement was taken. They can either afford it or (more likely) can not. HMRC discriminating between types of debt is erm….well completely expected actually as that's the sort of thing they do. However, its still clearly unacceptable and another example of 'Behavioural insights' (or whatever the term is they like to use).
    Aside from me ranting though - yes Webberg is absolutely correct, at this stage its only for settlement where they HAVE to live upto such a promise.

  6. #6

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    Quote Originally Posted by Clairol View Post
    Hi Phil, Can you give out any guidance on what factors are used to determine TTP please? What can we do when attempting to negotgiate to get the best deal?
    How is the calculation worked out by HMRC - is is based on disposable income? Are we expected to sell our assets eg car/house/investments?

    Also, if we can’t agree an amount but I just start to pay what I can afford what will happen then?

    Hi, there's no absolute clear guideline but feel free to give me a call to discuss. (I cant give out my number but google will help). As this isn't a sales push ill state a separate firm other than mine (WTT/Webberg) will also be happy to receive such a call and assist.
    Ill PM you my number if wish to chat.

    Thanks
    Phil

  7. #7

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    Default ..

    I totally disagree with these discriminatory terms for repayment. Its another classic case of "those who took the risk and blew all the cash on (fill in the blanks)" now have a better deal in terms of repayment. Potentially.

    Perhaps HMRC would be better advised to offer all people who wish to settle (which I might add is voluntary!) a 5 year repayment option as a means of encouraging more people to settle rather than discriminating between those who have opted to settle. Or is that what we think is starting to happen?
    I'm assuming the 5 year repayment period is subject to the standard 4%?
    Incidentally how is the interest calculated? is it compound or added per year? could someone give me an example on a settlement figure of £100k (in the interests of keeping the maths easy!)

    thanks

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    Quote Originally Posted by Finalwhistle View Post
    I totally disagree with these discriminatory terms for repayment. Its another classic case of "those who took the risk and blew all the cash on (fill in the blanks)" now have a better deal in terms of repayment. Potentially.

    Perhaps HMRC would be better advised to offer all people who wish to settle (which I might add is voluntary!) a 5 year repayment option as a means of encouraging more people to settle rather than discriminating between those who have opted to settle. Or is that what we think is starting to happen?
    I'm assuming the 5 year repayment period is subject to the standard 4%?
    Incidentally how is the interest calculated? is it compound or added per year? could someone give me an example on a settlement figure of £100k (in the interests of keeping the maths easy!)

    thanks
    I believe the interest is simple rather than compound, rate has been 3% for the past 10 years, if you owe £50K from 2014 and 50K from 2015, interest will be (4 X 3% X 50K) + (3 X 3% X 50K ) , so about £10,500.

  9. #9

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    Quote Originally Posted by Albert49 View Post
    I believe the interest is simple rather than compound, rate has been 3% for the past 10 years, if you owe £50K from 2014 and 50K from 2015, interest will be (4 X 3% X 50K) + (3 X 3% X 50K ) , so about £10,500.
    Calculation for TTP is:-
    5,000.00 amount of interest due on 50K for 5 years 50000*((3%+1%)*(60/12)/2)
    55,000.00 Total due TTP
    916.67 60 payments

    TTP interest is the standard 3% + a 1% "forward interest" HMRC add for additional risk!

  10. #10

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    Default APN/FN need help

    I am new to this forum and desperately need some advice.

    I was a contractor under Montpelier scheme from 2005 to 2008. And like everyone in this forum I have had my share of APN/FN.
    Unfortunately, the sums were too great and my current work/personal situation too different for me to in anyway settle. I did bury my head in the sand.

    But to my extreme delight in 2015 APN/FN were withdrawn by Montpelier litigation team and I thought that was the end of it.

    But the APN/FN re-surfaced again in 2016/2017 but this time Montpelier did not have me in any JR and at the same time I received alarming notification from HMRC Debt management team which shook me to the core.

    I sent off Montpelier composed letter (‘Hardship to pay) to Debt management and at the same time contacted an accountant to take charge of my gloomy situation.

    That was in April of this year. I instructed my account to take corrective action so that I could settle once for all. My accountant also convinced me that he could do some kind of a ‘deal’ to lessen the amount. In anyway, I did not have the funds so decided to put my flat in the market.

    Since then I have been awaiting with abated breath for HMRC response only to receive yesterday ‘Notification of Surcharge’ for failure to pay APN amount within the allocated time.

    When I eventually got hold of the accountant to find out what was going on – only to be told he never submitted the corrective action to HMRC! And his explanation was he was awaiting response back from HMRC to my ‘Hardship to pay’ letter which would have given me more time!
    Whether or not his intention was justified –he completely failed to communicate he did not submit the corrective action.

    So I am back to square one but now the sum to settle is even larger. (I did not manage to sell my flat)

    I have never contacted HMRC directly for the fear I may not understand my options. And I still have not. I am not sure if I am confident to do so.

    Please can someone give me any suggestion as to how I should proceed next

    - Contact another accountant? Can someone advise of a reputable accountant (not expensive)
    - Recommended APN tax advisor? Any recommendation
    - Directly deal with HMRC

    I have not slept for months but now I am completely drowning and in total despair.

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