Have you had a letter from HMRC?
It has come to our attention that various types of letters are going out to contractors. Don’t panic firstly, as receiving a letter doesn’t always mean you have done something wrong in the eyes of HMRC.
Regardless of what methods you may or may not have used over the years to be paid as a contractor, you could inadvertently find yourself at the end of a tax investigation, but you shouldn’t unduly stress. If you are concerned about the 2019 loan charge or a letter you may have had then please contact your Relationship Manager. The 2019 loan charge comes into effect TODAY.
Things to consider:Have you ever received or engaged with a scheme or solution which offered the following:
– EBT (Employee Benefit Trust),
– Payment received from offshore or onshore Trusts,
– Minimum wage salary along with a secondary payment,
– Any form of loan or annuity instead of income.
What could trigger a tax investigation?
Generally speaking, HMRC is likely to launch an investigation should it discern something suspicious in your tax return – such as a sudden and very large claim for VAT on your business, or a sudden drop in your taxable income. There are numerous reasons and just because you have received a letter from HMRC, it doesn’t always mean that you have done something wrong, in their eyes.
What to expect during the early stages
Should HMRC decide to investigate you, they will start proceedings by writing to you with an explanation of what exactly they want to check. This could be any taxes you have been paying, accounts and tax calculations, your Self-Assessment tax return, your Company Tax Return or if you employ people, PAYE records and returns.
Once you know that you are the subject of an investigation, you can contact your Relationship Manager at Tailored Services who will initially need as much information as possible, along with a copy of a letter you may have received. Once we have this, we can provide initial guidance on the “do’s and don’ts” of dealing with the HMRC, and where required, refer you to a company who specialises in tax investigations.
During a “compliance check”, as HMRC would call it, you should be wary of refusing to either send the relevant information or to arrange for a visit when prompted to do so by HMRC. This is because such refusal could land you a penalty to pay – unless you have what would be considered a “reasonable excuse”.
After the check is complete…
… HMRC will write to tell you the results. Using a tax specialist company, we can help you towards a favourable outcome. All of this aside, we would urge you not to ignore such an investigation and not to jump to conclusions of the worst case scenario as an outcome. At Tailored Services, we are here help new and existing clients who used disguised remuneration avoidance schemes and want to settle their tax affairs due to the loan charge or seek advice as to whether it is applicable to them.
Today is the last day to contact the revenue so if you are concerned, contact us today and we, or the firm of tax specialists we work with, can assist you. As long as contact is made today with HMRC a settlement can be reached at a later date.
There is full guidance for people who want to settle their tax affairs on GOV.UK, including information about what you need to send today which includes your individual Tax Reference number, the name of any schemes/arrangements used and what tax year they relate.
Difficulty paying what they owe
People don’t need to pay the full settlement amount in one go or today, as you can spread payments across a number of years. There is no maximum time period for payment arrangements and HMRC will not force anyone to sell their main home to pay their disguised remuneration debts. Even if scheme you feel you cannot pay what you owe, you should still call us as soon as possible so we can either directly or using the tax specialists advise you the best course of action.
Call 0207 118 2400 or email firstname.lastname@example.org