Time is precious, but it could also be costly. The settlement refund deadline to make claims in relation to previous tax avoidance settlements is rapidly approaching.
Claims must be made, not agreed, on or before 30 September 2021.
Fail to claim and the possibility of refund is lost.
Tick, tick, tick
Any taxpayer that previously reached a settlement with HMRC in respect of a tax avoidance arrangement who hasn’t checked the terms really ought to do so as they may be due money back.
The expression ‘Voluntary Restitution‘ will usually be present in the settlement agreement or possibly communications with HMRC leading up to the agreement. The absence of interest in the settlement is another promising feature.
Not all settlements will fit the claim parameters but a number will. The clock is ticking and the ability to claim will cease on 1 October 2021
What is claimed?
- Eligible PAYE and NIC that was included in the original settlement.
- Any IHT payment falls outside the scope of claim.
To date our clients have received in excess of £1.5M of refunds with more working their way through the system.
A refund will not be made if the settlement was not on a Voluntary Restitution (VR) footing, this is key.
Our clients have included those with full eligibility and some with partial. In the latter case HMRC had partially protected its position with a Reg 80 (PAYE) but not a Section 8 (NIC) or vice versa. In one case HMRC did raise a Reg 80 (PAYE) and a Section 8 (NIC) but on the wrong year, so the settled year was fully unprotected and on VR terms.
VR settlements for arrangements implemented before 9 December 2010 are simpler in terms of claim. Post 9 December 2010 have a higher hurdle of disclosure of the arrangement to HMRC in the tax filings.
HMRC take a default position of no taxpayer ever made sufficient disclosure, is that always the case?
Arguably many did as HMRC were able to issue numerous Reg 80’s and Section 8’s, are you content to accept HMRC’s view of the world and not seek refund?
- Screen the data for eligibility.
- Make the claim if eligible, even if borderline.
- Let HMRC decide and then choose a course of action rather than self denial.
- Work the numbers, fill in the copious paperwork, get the refund or contest HMRC’s view and if successful work the numbers etc.
We have a wealth of experience dealing with matters involving Voluntary Restitution Settlement Refunds.