HMRC has in the past offered settlements, called Autumn Statement Settlement Offers (ASSO’s), which largely expired in February 2016. Despite the deadline we are aware that some ASSO’s, for certain tax solutions, are still being finalised.
In broad the ASSO’s offer relief of cash contributed plus or minus various tax solution expenses. For many tax solutions the problem is that the cash element was leveraged by loans of up to 8 times the cash contribution.
In accepting an ASSO taxpayers face the certainty that they will be asked to repay relief granted on all their loans as well as statutory interest from the date of original relief. If a tax solution was bought in c. 2005 interest is typically going to amount to 50% of the tax due. A taxpayer could therefore face the need to repay relief on the loan portion say 4 times their cash plus 50% more for interest. On a £100,000 cash investment the repayment to HMRC could be £240,000!
In certain specific circumstances LTAG can claim that HMRC may be out of time to reclaim repayments made to taxpayers.
Settling for an ASSO, while at least creating a sense of closure, is a very expensive option compared to an LTAG solution. Taxpayers should consider carefully if LTAG could assist them.