AM Limited COP8 HMRC Investigation Letter..

[DotasScandal]

Something isn't right here, or they don't trust Royal Mail..

It is themselves that they do no trust. Apparently, they were in such a rush to get these APNs out the door that they managed to mix up addresses in a number of cases. These courtesy follow-up calls may be damage control.
These clowns wouldn't find their way out of a paper bag!

[DonkeyRhubarb]

It is themselves that they do no trust. Apparently, they were in such a rush to get these APNs out the door that they managed to mix up addresses in a number of cases. These courtesy follow-up calls may be damage control.
These clowns wouldn't find their way out of a paper bag!

So far we've seen:

1) APNs sent to the wrong address
2) APNs with the wrong figures
3) APNs sent for the wrong years
4) APNs sent with the wrong DOTAS SRN
5) APNs with the wrong scheme name
6) APNs withdrawn and no reason given

And they've only got through about 10% of APNs for our scheme so far.

[LandRover]

APN JR

Questions that I would greatly appreciate clarity on...

So the JR appeal won't be heard until when?

What happens if you get APN and appeal is greater than 90 days from receipt of demand?

Is APN appeal simply a stalling process, and gives you time to save or work out how to fund the APNs?

Will interest be added to APN demand if ultimately "IF" JR appeal lost?

Trying to work out whether to join AML JR. Ultimately its the winning of FTT against HMRC, or they significantly change their settlement offer that seems the most important issue for me.

[ads1980]

So far we've seen:

1) APNs sent to the wrong address
2) APNs with the wrong figures
3) APNs sent for the wrong years
4) APNs sent with the wrong DOTAS SRN
5) APNs with the wrong scheme name
6) APNs withdrawn and no reason given

And they've only got through about 10% of APNs for our scheme so far.

Shame that mine seemed all correct. But I'll check it again just in case!

[LandRover]

Questions that I would greatly appreciate clarity on...

So the JR appeal won't be heard until when?

What happens if you get APN and appeal is greater than 90 days from receipt of demand?

Is APN appeal simply a stalling process, and gives you time to save or work out how to fund the APNs?

Will interest be added to APN demand if ultimately "IF" JR appeal lost?

Trying to work out whether to join AML JR. Ultimately its the winning of FTT against HMRC, or they significantly change their settlement offer that seems the most important issue for me.

Any help on this please?

[jrock]

Any help on this please?

For your question
What happens if you get APN and appeal is greater than 90 days from receipt of demand?

Well the AML Appeal will be done in the next month so before the 90 days. The APN has to be done before 90 days other wise your screwed!

[webberg]

Questions that I would greatly appreciate clarity on...

So the JR appeal won't be heard until when?

What happens if you get APN and appeal is greater than 90 days from receipt of demand?

Is APN appeal simply a stalling process, and gives you time to save or work out how to fund the APNs?

Will interest be added to APN demand if ultimately "IF" JR appeal lost?

Trying to work out whether to join AML JR. Ultimately its the winning of FTT against HMRC, or they significantly change their settlement offer that seems the most important issue for me.

1. The first JR up before the Court is the Ingenious group and that will be late May/early June. A decision might be anywhere from 4 to 12 weeks later. Almost certain to be appealed. Most other JR's are stalled behind this one which is sensible because a crushing defeat will allow other JR's to pull out before Court, saving costs, whereas a partial or complete victory means that arguments can be honed. If a contractor JR goes ahead I'm guessing September.

2. HMRC's view is that they will honour the injunction that a Court places on them not to collect an APN amount until a decision is reached. They have said to me, in writing, that if the APN is subsequently found to be due, the original due date will stand and penalties will apply from that date. This is HMRC's view and has not been tested.

3. Yes. Unless a JR forces a change of law (and withdrawal of all notices) this is HMG policy, supported by all parties, and will reappear. At the very most I think a delay of perhaps 9 to 12 months might be possible. I am on record as saying that, in my opinion, if you can pay the APN, even on terms, you should do so as economically your money is not going to work hard enough to cover a penalty of 15%.

4. No. The APN is a payment on account of the final liability. It is the final liability that carries interest charges, not the APN.

5. Agreed. The AML JR is cheap at £250 but if the HMRC position on penalty is correct, then see 3 above. The final tax position will be resolved via litigation (uncertain, expensive and long), negotiated settlement (uncertain, less expensive, not as long, but HMRC will want something) or change of law. If a campaign designed to drive HMRC to the negotiating table with a reasonable proposal looks like being successful then the last is a real danger.

My back of an envelope view of the litigation vs negotiation route is as follows.

You owe HMRC say £10,000. Your fellow scheme members owe £1,000,000, so let's assume you are 1% of the pot.

Litigation costs - budget style - perhaps £400,000 to FTT. That will cost you £4,000. To go to Supreme Court perhaps double that. Being part of something like BIG GROUP (yes, I know I have a vested interest), may reduce that cost. You may have to pay HMRC costs.

It will require 5 to 7 years from now to get a final decision.

A loss says you still owe £10,000. Even if you didn't pay the APN, you owe £1,500 in penalty. You also owe a further 5 to 7 years interest at 3% pa, say another £1,500. This is in addition to interest from say 2006 to 2015 which might add another £5,000.

A win and you may pay less tax (and interest). You may get some of your costs refunded, usually around two thirds. No interest charges.

So a loss is tax £10k; fees; £4k to £8k; tax £10k; penalty £1.5k; interest £6.5k; total between £32k to £36k.

A win is perhaps no tax, no interest, fees between £1k and £2k.

BIG question is will you win? Look at the threads for differing opinions.

Negotiation means that you may end up going down the litigation route after spending a couple of years finding (and funding) alternative arguments and perhaps bringing litigation around some of the issues.

APN as above. Let's assume no payment and a potential £1.5k penalty regardless of outcome.

Cost of funding the negotiation over a couple of years - difficult to say but perhaps for your group on its own, £1k to £2k. In a bigger group, less.

Best result is obviously no tax due but we know HMRC will not give that up without a Court battle.

So perhaps best result would be say £10k tax bill but spread over 4 years from say 2016; no interest; possible APN penalty £1.5k; costs say £1.5k. Total £13k spread over say 2016 to 2020.

Downside is that you may still have to litigate but that will not start for 2/3 years.

Like I say, back of an envelope so don't hold me to this.

[LandRover]

1. The first JR up before the Court is the Ingenious group and that will be late May/early June. A decision might be anywhere from 4 to 12 weeks later. Almost certain to be appealed. Most other JR's are stalled behind this one which is sensible because a crushing defeat will allow other JR's to pull out before Court, saving costs, whereas a partial or complete victory means that arguments can be honed. If a contractor JR goes ahead I'm guessing September.

2. HMRC's view is that they will honour the injunction that a Court places on them not to collect an APN amount until a decision is reached. They have said to me, in writing, that if the APN is subsequently found to be due, the original due date will stand and penalties will apply from that date. This is HMRC's view and has not been tested.

3. Yes. Unless a JR forces a change of law (and withdrawal of all notices) this is HMG policy, supported by all parties, and will reappear. At the very most I think a delay of perhaps 9 to 12 months might be possible. I am on record as saying that, in my opinion, if you can pay the APN, even on terms, you should do so as economically your money is not going to work hard enough to cover a penalty of 15%.

4. No. The APN is a payment on account of the final liability. It is the final liability that carries interest charges, not the APN.

5. Agreed. The AML JR is cheap at £250 but if the HMRC position on penalty is correct, then see 3 above. The final tax position will be resolved via litigation (uncertain, expensive and long), negotiated settlement (uncertain, less expensive, not as long, but HMRC will want something) or change of law. If a campaign designed to drive HMRC to the negotiating table with a reasonable proposal looks like being successful then the last is a real danger.

My back of an envelope view of the litigation vs negotiation route is as follows.

You owe HMRC say £10,000. Your fellow scheme members owe £1,000,000, so let's assume you are 1% of the pot.

Litigation costs - budget style - perhaps £400,000 to FTT. That will cost you £4,000. To go to Supreme Court perhaps double that. Being part of something like BIG GROUP (yes, I know I have a vested interest), may reduce that cost. You may have to pay HMRC costs.

It will require 5 to 7 years from now to get a final decision.

A loss says you still owe £10,000. Even if you didn't pay the APN, you owe £1,500 in penalty. You also owe a further 5 to 7 years interest at 3% pa, say another £1,500. This is in addition to interest from say 2006 to 2015 which might add another £5,000.

A win and you may pay less tax (and interest). You may get some of your costs refunded, usually around two thirds. No interest charges.

So a loss is tax £10k; fees; £4k to £8k; tax £10k; penalty £1.5k; interest £6.5k; total between £32k to £36k.

A win is perhaps no tax, no interest, fees between £1k and £2k.

BIG question is will you win? Look at the threads for differing opinions.

Negotiation means that you may end up going down the litigation route after spending a couple of years finding (and funding) alternative arguments and perhaps bringing litigation around some of the issues.

APN as above. Let's assume no payment and a potential £1.5k penalty regardless of outcome.

Cost of funding the negotiation over a couple of years - difficult to say but perhaps for your group on its own, £1k to £2k. In a bigger group, less.

Best result is obviously no tax due but we know HMRC will not give that up without a Court battle.

So perhaps best result would be say £10k tax bill but spread over 4 years from say 2016; no interest; possible APN penalty £1.5k; costs say £1.5k. Total £13k spread over say 2016 to 2020.

Downside is that you may still have to litigate but that will not start for 2/3 years.

Like I say, back of an envelope so don't hold me to this.

Big Thank You for this detailed explanation it's cleared quite a lot up for me, and I guess many others.

I definitely interested in "Big Group" approach, I hope that HMRC eventually look at negotiating but they will need a "reason(s)" to do so. I wont be paying £250 for AML JR. I think I will pay what I can and ask for TTP. Ultimately it's going to be a "long haul" as you said, I am ready for that, but I think paying something now will mitigate "potential" interest charges.

Again thanks you a great help to these forums.

[ads1980]

Big Thank You for this detailed explanation it's cleared quite a lot up for me, and I guess many others.

I definitely interested in "Big Group" approach, I hope that HMRC eventually look at negotiating but they will need a "reason(s)" to do so. I wont be paying £250 for AML JR. I think I will pay what I can and ask for TTP. Ultimately it's going to be a "long haul" as you said, I am ready for that, but I think paying something now will mitigate "potential" interest charges.

Again thanks you a great help to these forums.

Is there any use in asking HMRC for TTP and also joining AMLs JR? I was just wondering if this gets you covered in both sides of the table?

[LandRover]

Is there any use in asking HMRC for TTP and also joining AMLs JR? I was just wondering if this gets you covered in both sides of the table?

Getting TTP means I will begin paying something, whereas JR means I have potential 15% penalty too. Ultimately the APN is law and HMRC want payment, its AML v HMRC in FTT that is the only solution. I think "Big Group" approach is the way to go, can HMRC be brought to the negotiating table is key to beginning to bring closure to this miserable situation imo.