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Settlement - HMRC 24 month instalment assumption

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    Settlement - HMRC 24 month instalment assumption

    Has anyone else received a settlement letter from HMRC stating that, as you have not indicated whether you wish to make full payment within 30 days (i.e. after sending your initial email with loan details), the letter of offer has been prepared based on payment over 24 months?

    This includes forward interest, that would not be due if you paid in full.

    Am amazed at this - nowhere on HMRC’s website or indeed the confirmation email you receive stating the info they require for settlement, do they say that you need to indicate payment terms. I’ve always assumed that initial settlement would be based on full payment, with an option to apply for settlement in instalments.

    I find this a tad sneaky - I.e. opportunity to tempt you into 2 years’ instalments, earning them extra income in the form of forward interest.....

    Just to add, there is no option to pay in full - the contract amount is based on 24 months instalments.
    Last edited by Boodog; 10 June 2019, 14:34. Reason: Additional info

    #2
    Originally posted by Boodog View Post
    Has anyone else received a settlement letter from HMRC stating that, as you have not indicated whether you wish to make full payment within 30 days (i.e. after sending your initial email with loan details), the letter of offer has been prepared based on payment over 24 months?

    This includes forward interest, that would not be due if you paid in full.

    Am amazed at this - nowhere on HMRC’s website or indeed the confirmation email you receive stating the info they require for settlement, do they say that you need to indicate payment terms. I’ve always assumed that initial settlement would be based on full payment, with an option to apply for settlement in instalments.

    I find this a tad sneaky - I.e. opportunity to tempt you into 2 years’ instalments, earning them extra income in the form of forward interest.....
    I also had this and when I signed it and sent it back, I included a short letter stating that I wish to pay in full.

    My advisor tells me that you only pay the interest for the time the settlement is outstanding after they demand the first payment so i’ll be paying the full amount (minus the forward interest figure) once HMRC demand first payment.

    Comment


      #3
      Originally posted by dangermaus View Post
      I also had this and when I signed it and sent it back, I included a short letter stating that I wish to pay in full.

      My advisor tells me that you only pay the interest for the time the settlement is outstanding after they demand the first payment so i’ll be paying the full amount (minus the forward interest figure) once HMRC demand first payment.
      Can you tell how they worked out the forward interest - for open years was it based on the tax due or the tax plus the late payment due?

      If you had closed year was forward interest applied on the late payment interest?

      Thanks

      Comment


        #4
        Originally posted by dangermaus View Post
        I also had this and when I signed it and sent it back, I included a short letter stating that I wish to pay in full.

        My advisor tells me that you only pay the interest for the time the settlement is outstanding after they demand the first payment so i’ll be paying the full amount (minus the forward interest figure) once HMRC demand first payment.
        The letter I have, requires me to sign based on the amount (inc fwd interest) and the payment terms set out in the letter.

        What did you do re the IHT question? I listened in to a webinar (albeit for agents) a while ago and HMRC said they didn’t require confirmation of loans being written off.

        Comment

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