APN charges imposed following CLSO final settlement payment APN charges imposed following CLSO final settlement payment
Posts 1 to 8 of 8
  1. #1

    Nervous Newbie


    Join Date
    Nov 2020
    Posts
    2

    Default APN charges imposed following CLSO final settlement payment

    Hi,

    I recently settled in full with HMRC for charges related to loan schemes I was - stupidly - part of in tax years 2009, 2010 and 2011. It was painful to do so. However, now I am being asked to pay a further £5K which relates to the non-payment of APN's (related to those years) on time.

    All my loans predated the Dec 2010 date associated to the loan charge however, I was told unequivocally by HMRC that I still owed the monies because APN's had been opened. Fine, well, not really but ok.

    Nevertheless, I was offered "loan charge" terms (e.g. paying tax as if the income was earned in those three years) to settle the APN's which is what I ultimately did. By the time I made the final payment I had capitulated to pressure and had been paying off the APN's via a monthly DD. The DD contributions were subtracted from the amount which I owed. Fine.

    Before paying the final amount, I took pains to check over and over with HMRC that this final payment would draw a line under the matter and I wouldn't owe anything else. HMRC offered me reassurance verbally and pointed me to various bits in the settlement contract (e.g. "The agreement.... (e) concludes HMRC's enquiries into the Payments listed in Appendix 2 and settles any assessments in so far as they relate to those Payments.") - I was reassured.

    Yet, about two weeks after paying the final settlement I start getting letters from those nice APN people asking for a further £5K. Apparently, the £5K represents charges for not paying the APN's in full back in 2016. I'm not fine with this.

    Can anyone offer advice or share a similar experience?

    Cheers and thanks.

  2. #2

    Default

    Oh dear, I think you need paid for help. I don't think you are going to get a definitive answer here. Your issue looks very complex and perhaps even unique to yourself?
    Public Service Posting by the BBC - Bloggs Bulls**t Corp.
    Officially CUK certified - Thick as f**k.

  3. #3

    More time posting than coding


    Join Date
    May 2014
    Posts
    450

    Default

    APN penalties have always been out of scope of any settlement agreement,so will be expected to be paid outside of that agreement.

    However, as already suggested, get professional advice so they can assess the overall picture and advise accordingly.
    STRENGTH - "A river cuts through rock not because of its power, but its persistence"

  4. #4

    More time posting than coding


    Join Date
    Dec 2010
    Posts
    277

    Default

    Quote Originally Posted by newbmaster69 View Post
    Hi,

    I recently settled in full with HMRC for charges related to loan schemes I was - stupidly - part of in tax years 2009, 2010 and 2011. It was painful to do so. However, now I am being asked to pay a further £5K which relates to the non-payment of APN's (related to those years) on time.

    All my loans predated the Dec 2010 date associated to the loan charge however, I was told unequivocally by HMRC that I still owed the monies because APN's had been opened. Fine, well, not really but ok.

    Nevertheless, I was offered "loan charge" terms (e.g. paying tax as if the income was earned in those three years) to settle the APN's which is what I ultimately did. By the time I made the final payment I had capitulated to pressure and had been paying off the APN's via a monthly DD. The DD contributions were subtracted from the amount which I owed. Fine.

    Before paying the final amount, I took pains to check over and over with HMRC that this final payment would draw a line under the matter and I wouldn't owe anything else. HMRC offered me reassurance verbally and pointed me to various bits in the settlement contract (e.g. "The agreement.... (e) concludes HMRC's enquiries into the Payments listed in Appendix 2 and settles any assessments in so far as they relate to those Payments.") - I was reassured.

    Yet, about two weeks after paying the final settlement I start getting letters from those nice APN people asking for a further £5K. Apparently, the £5K represents charges for not paying the APN's in full back in 2016. I'm not fine with this.

    Can anyone offer advice or share a similar experience?

    Cheers and thanks.
    When you signed your agreement to pay by DD did the letter not state full and final settlement ? Also did you do this all yourself or with the help of an accountant or advisor? I had something similar and made sure my agreement stated without prejudice and full and final settlement.

    I do think in this case you have a failry good arguement. HMRC by law collect tax and you have to pay interest which sounds like you paid. Penalties can be waived if you have a good case. I would speak to them firstly and if they dig their heals in time to write to your MP giving them details. They can write to HMRC on your behalf and if you have a LC supportive MP all the better.

  5. #5

    More time posting than coding


    Join Date
    Dec 2010
    Posts
    277

    Default

    I also agree with Regron above btw.

    problem is advice costs and a lot of us impacted dont even have that money. Like I said call HMRC first to try and gage if their is any flexibility. Then I would escalte to my MP as this doesn't cost a fee.

    Lastly weigh up the cost of advice against the payment. good luck

  6. #6

    Super poster


    Join Date
    Dec 2014
    Location
    WTT Consulting Ltd - London and online
    Posts
    3,974

    Default

    For what this is worth.

    A settlement agreement with HMRC usually relates to the tax and interest that falls due on payments made to you and which HMRC considers amount to employment income.

    It is therefore limited in scope.

    In some instances, (although I've not seen this in contractor settlements), the agreement will extend to say that penalties for alleged or actual incomplete, inaccurate or otherwise deficient tax returns or late payment of tax (surcharges) will either not be applied or are incorporated into the agreement.

    The issue you have is that the APN process is NOT part of the settlement agreement.

    The APN is a payment on account of the final liability that can be demanded by HMRC if certain conditions have been met. If you have had an APN and paid it, then the amount paid will appear in the settlement agreement as a credit against the final liability.

    The settlement does NOT however extend to surcharges and/or penalties for not paying an APN on time.

    An APN fell due for payment 90 days from issue or 30 days from the (inevitable) rejection of any representation made.

    Failure to pay by then or to have entered an agreement to pay in instalments, triggers a surcharge/penalty. (The difference between a surcharge and a penalty in this instance is moot but technically they are different).

    So the surcharge/penalty you have is for failing to pay on time. It has nothing to do with the "full and final settlement of tax liabilities". As such it is NOT part of the settlement agreement.

    If you wish to avoid the surcharge/penalty you need to have a "reasonable excuse" for not paying. The Tribunal reported cases are littered with attempts from taxpayers to avoid penalties in similar circumstances. Almost all fail.

    In particular, lack of funds, lack of a final agreed tax position, perceived or actual unfairness, will NOT be good enough reasons.

    Usually you would need to show that the APN was sent to an incorrect address (i.e. one that HMRC had been advised was no longer used), ill health, extreme personal circumstances such as the loss of a close relative.

    There are cases on how HMRC should have dealt with representations on APNs. HMRC seems to have taken an approach to these cases in which, where they had already dealt with the representation, they claim to have met the (later) conditions imposed upon them by the Court of Appeal (debatable) or they stalled responses whilst the case was sub judice and then issued a rejection, claiming compliance (debatable).

    There may be some helpful material there if you want to research them.

    My "advice" to you however is that you should consider carefully whether you had a reasonable excuse for NOT PAYING the APN at the time it fell due. If you think you have, then discuss with an adviser because he/she will know within a few minutes if your reason has the ghost of a chance. If there is cause, then be prepared to go to a Tribunal in terms of time, emotional energy and cost.

    There is of course a risk/reward equation in play here.

    Going to an adviser for an initial view is perhaps free or a low cost, perhaps a few hundred pounds.

    Using said adviser to go to Tribunal and you're looking at a fee rising to five figures.

    You do not need an adviser to go to Tribunal - you can do that yourself - but how much is your time worth?

    Measure that against the surcharge/penalty.

    Do NOT hold any hope for the "full and final" settlement to have included the APN charge for non payment. It does not, never did and even if you had asked for it to be included when you were agreeing it, the answer would have been "no".

    You might want to consider whether the process and documents making up the settlement and the exclusion of the APN penalty amount to an unfair contract having been reached, one that disadvantages you. If so, then perhaps the contract can be amended or declared void. I am not a lawyer and cannot comment further on that. I would say however, be careful. If the contract is annulled then there is no guarantee that a new one will be possible.
    Best Forum Adviser & Forum Personality of the Year 2018.

    (No, me neither).

  7. #7

    Nervous Newbie


    Join Date
    Nov 2020
    Posts
    2

    Default you guys are ace...

    ...thanks for your help, Fred bloggs, regron, lowpaidworker and, omg, webberg you're lit.

    My conclusion is that, for me, there is no choice other than to pay but, somehow you guys/gals have made me feel less alone / done-to.

    Thx.
    daf

  8. #8

    Default

    Quote Originally Posted by newbmaster69 View Post
    ...thanks for your help, Fred bloggs, regron, lowpaidworker and, omg, webberg you're lit.

    My conclusion is that, for me, there is no choice other than to pay but, somehow you guys/gals have made me feel less alone / done-to.

    Thx.
    daf
    Good decision and good to hear you are perhaps a little less desperate feeling than before you posted. Good luck.
    Public Service Posting by the BBC - Bloggs Bulls**t Corp.
    Officially CUK certified - Thick as f**k.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •