Rational Tax is a Collective Challenge To HMRC’s Guidance Re The Taxation of Basic Redress For Mis-sold IRHPs
Join The Challenge Group Now
About Rational Tax
Rational Tax Limited is a boutique tax consultancy created to assist business owners mis-sold Interest Rate Hedging Products.
The Redress Scheme
On 30th June 2012 the Financial Services Authority announced the creation of a redress scheme in connection with the mis-sale of Interest Rate Hedging Products to small businesses (“the Redress Scheme”).
Basic Redress
Under the Redress Scheme, monies paid to a business in connection with an Interest Rate Swap Agreement (“a Swap”) sold in breach of the applicable regulations form part of the redress paid to the SME to “put it back in the position it would have been in save for the regulatory breach”. That sum is referred to as “Basic Redress”.
(Basic Redress does not include the 8% interest payable under the Redress Scheme nor does it include any Consequential Loss payable under the Redress Scheme.)
HMRC’s Guidance
On 25th July 2014 HMRC issued guidance stating that the Basic Redress paid to a taxpayer who was mis-sold a Swap is an income receipt in the hands of the taxpayer and should be taxed as income.
A Contrary Opinion
Rational Tax believes that the Basic Redress paid to taxpayer who was mis-sold a Swap by their bank is a capital receipt in the hands of the taxpayer. In addition Rational Tax believes that the 8% Notional Interest paid as part of the Redress should properly be treated as a capital receipt.
The Challenge To HMRC’s Guidance
Rational Tax has challenged the Guidance issued by HMRC (“the Challenge”) and is asking all SME taxpayers who received Basic Redress to support the Challenge (together called “the Challenge Group”).
No Upfront Cost To Taxpayers & No Risk Of Adverse Costs
Rational Tax has put in place a business plan that enables SME taxpayers to join the Challenge Group at no upfront cost to them and at no risk of adverse costs.
Rational Tax is therefore asking every recipient of Basic Redress to join the Challenge Group Now.
Your registration details will be kept confidential.
Rational Tax will email you an agreement (‘the Agreement”) which you will be asked to sign. On receipt of the signed Agreement you will become a member of the Challenge Group.
When become a member of the Challenge Group you will become liable to pay a Success Fee to Rational Tax when “Success” is achieved.
The Success Fee will be equal to ten per cent (10%) of the Tax Benefit you receive as a result of Success.
If you do not receive any Tax Benefit no fee will be payable.
Once you have entered into the Agreement with Rational Tax your only liability will be the payment of this Success Fee IF AND WHEN RATIONAL TAX IS SUCCESSFUL.