2019 tax charge - consultation preparation

[AtW]

1.The (Supreme) Court will decide if they are 'sham' loans. Not HMRC, not the Government. The Court and only the Court will decide.

2. It will be interesting to see HMRC in Court Room 1A presenting a case claiming the loans are a sham. Then their colleagues in Court Room 1B presenting a case where they accept the loans are in fact real, but are 'bad loans' that should incur tax. That won't make them look silly in the slightest...

Or their colleagues in Court Room 1B will say those loans are "sham" or "bad", which is why they should incur tax, no contradiction.

If HMRC were confident in proving these loans to be a 'sham', they could with existing powers take a loan scheme to court, win, then issue follower notices to all other schemes. They haven't and I wonder why?

Well clearly they don't have smartest people on payroll to do it, so they have to resort to simpler duller tactics like changing legislation to enforce what the Parliament intended in the first place. It's sad state of affairs, but unfortunately there is more money to be made in area of helping to shaft the taxpayers rather than protect their interests.

It's worth a read. Basically UBS wanted to pay its staff and decided to do it in a fancy way that, they claimed, meant no tax was paid. Most loan schemes do the same thing, but the fancy way of doing it is with a trust and a loan. The Supreme Court said they can ignore something fancy that has "no business or commercial purpose" which meant that what the UBS guys got was taxed as a bonus.

Posted earlier in the thread - IANAL but this sounds to me like the Supreme Court already effectively said those loans were "sham", at least for tax purposes.

[StrengthInNumbers]

Tough, it was done by choice, why should other taxpayers pick up the tab for those people who have chosen to pay 10% to some scheme providers?

That 10% should have been paid AFTER tax anyway, just like everybody else is doing.

Just like everyone HMRC ensures correct PAYE is deducted and employers follow rules. Here HMRC sat on tax returns for multiple years without saying a word.

Sellers of schemes did not let have HMRC what HMRC believes they should have collected. Thus HMRC should go after sellers. If we go after sellers they will turn around and say HMRC has to prove and win a case.

Where HMRC has won, court says liability is with employers. UBS Supreme Court was between UBS and HMRC - not the employees of UBS.

Those contractors who want to settle are only agreeing because they also like tax and want to pay fair share. But HMRC wants the full house not what is logical.

Loan was sham or bad and tax was due but for IHT purpose that loan was valid. How do u explain that? HMRC is saying I will have my cake and will eat it too without realising that something went wrong and their inaction also caused that. Why not come to table and resolve this sensibility?

Any retro law u can think off that was made to make companies selling schemes - their directors and employees pay? Provide that and we contractors will get compensation from them.

[AtW]

But HMRC wants the full house not what is logical.

It's very logical because your resistance pissed them off - years and years of delays, it's not like you've won in courts anyway, good deal isn't to be expected at this stage - they now want to make an example of you as deterrent to future buyers into those schemes.

Any retro law u can think off that was made to make companies selling schemes - their directors and employees pay? Provide that and we contractors will get compensation from them.

If I was in charge then I'd get those schemes treated as tax evasion and go after the sellers too. The buyers are not innocent party in this though - they knew exactly what they were doing.

[Iliketax]

Posted earlier in the thread - IANAL but this sounds to me like the Supreme Court already effectively said those loans were "sham", at least for tax purposes.

No. I don't think anyone is saying that the loans are a "sham" from a legal perspective. Basically, a sham exists where the parties say one thing intending another. It is very rare for HMRC / the Courts to say that something is a sham. I like this quote:

“In a case involving a complex and artificial tax avoidance scheme, where the scheme documentation is sloppily executed, where the evidence of the taxpayer and of his legal adviser (the deviser of the scheme) is found to be unreliable, and where their dealings with the Revenue have been less than straightforward, there must be a strong temptation for any tribunal to, in effect, throw up its hands and cry “Sham!”. But in the instant case - and as long as the Snook definition of sham remains the accepted definition - that temptation has, in my judgment, to be resisted.”

For a tax avoidance scheme to work, it can't be a "sham" (if it was fraud would be an obvious concern) so I guess the promoters and everyone else genuinely intended the loans to be loans. But just because they are real loans, it does not mean that they are not subject to income tax. In Murray, the Court of Session said income tax was due before the loans were made. The Supreme Court may agree with that so the loans don't matter. Or it could say that the trust / loans had no business or commercial purpose and and so should be treated as a simple payment of cash. I don't know what they will say but whatever is said, no one is going to say that they are a sham.

[regron]

The buyers are not innocent party in this though - they knew exactly what they were doing.

Absolute garbage !!!! For some at least, anyway.

[CanPayButWouldRatherNot]

Beware certain posters with an axe to grind.

The only reason they're not more overtly venomous is because this is a moderated thread.

Some of us have felt their vitriol before over the years.

Best to just ignore.

Yeah where is Brillo when we need him

[DonkeyRhubarb]

[/B][/U][/B]

Absolute garbage !!!! For some at least, anyway.

I wouldn't waste your time engaging with that guy.

For years he's been vilifying anyone who used a scheme.

[DotasScandal]

It's very logical because your resistance pissed them off - years and years of delays

And here you are unequivocally showing that you don't have a clue what you are talking about.
HMRC never with engaged a vast majority of the "schemes", let alone their clients - there cannot be any resistance if you are not under attack.
The only think that is manifest is that HMRC sat on their hands from 2005 to 2015, and they don't want this to become too apparent. Hence their (succesful) begging Parliament for draconian powers to cover it all up quickly.

(Sorry DonkeyRhubarb - I won't be feeding this troll further)

[flamel]

If I was in charge then I'd get those schemes treated as tax evasion and go after the sellers too. The buyers are not innocent party in this though - they knew exactly what they were doing.

Anyone that knew EXACTLY what they were doing would have put their money in Panama, Lichtenstein etc.

I can categorically state that I did not know exactly what I was doing and I'm certain that would apply to most caught in this mess.

I've never heard of a tax evasion law being applied retrospectively, that would be too difficult for HMRC and the perpetrators too smart to get caught because they do know exactly what they're doing

[QCApproved]

Boenhoeffer

I used a scheme for year or so as it appeared an admin benefit over a LTD Co and would prevent any IR35 implications. However, when it became clear from my extensive experience in the real world that IR35 was unenforceable I reverted to using a Ltd Co, which is the blue riband of tax avoidance mechanisms. Sadly for not much longer it seems
The first round of loans could have been investigated and litigated by HMRC after those returns were submitted in short order and a note put on the website at that point and the scheme providers contacted to advise that HMRC saw these as income and not loans. They did not and perhaps fostered expectations of the treatment of these over a decade - maybe there is a tort in there somewhere.
I would direct your energies to the Future of Contracting thread atw as I assume that's your preferred vehicle.
perhaps we can have an essay form the good folk at HRMC who are on perusing these threads on our money "Is IR35 Unenforceable?"