Is there any point in being honest and upfront with HMRC? My client followed what his colleagues were doing in 2004 and joined a scheme that was then legal but not isn't. Luckily he took my advice and was only in it for a year. So...with all the pressure from HMRC to settle and tell them what loans were owing we did just that assuming that you could either settle OR pay the loan charge.
We got a settlement figure which included £15000 interest! Needless to say, with the loan charge having no interst or penalties, I rang up HMRC to see if I could do things that way and was told yes. When I worked out the figures, my client would be paying £7000 less on the loan charge with no interest. However, when I told HMRC that's what we would be doing they then say that my client will still end up paying the settlement amount including the interest. So....if I had not been honest and upfront and told HMRC nothing until the new end date of September 30th, my client would be up £7000. Surely it is not fair to charge interest on the same money one way and not the other? It appears that due to the settlement being an ongoing enquiry he will have to pay up. Is there a way around this? Can I get the settlement enquiry closed with no payment and then put through the loan charge? Aren't HMRC supposed to be 'fair' to the taxpayer. This doesn't seem fair to me.
Can I appeal the settlement in some way?