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HMRC Enquiry letters on Loans from EBT and other schemes

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    Bubble burst

    Hi all, was glad to come across this thread after the brown envelope landed on my doormat at the weekend.
    Like others, I can't see how I'll be able to meet their demands but I can't help feeling that I should have listened to my parents more when they said If something sounds too good to be true, it probably is.
    Every time I've opened a letter from Hector since I started the scheme my heart has skipped a beat so I'm glad in a way its all out in the open.
    For what its worth I was an ASMG and then White Collar client using IOM & Kirium (and one other I think). Got in touch with White Collar over the weekend but not holding my breath for a reply to be honest ... current strategy is that I'll appeal as late as I can with the short standard template and starting putting some ££ aside every month ... just wish rates were as good now as they were then .
    Last edited by famousfive; 25 February 2013, 08:26.

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      Originally posted by bonetired View Post
      I received the initial letter from HMRC asking me about my involvement in Edge. I replied with a fairly anodyne letter that was suggested to me by Edge. As yet I haven't received the 2008/2009 letter but I have been in touch with Michael Perry who is pretty certain that the letter is on its way. I hope he is wrong but I suspect that he is right. As I said in my initial posting Edge have ceased trading (wonder why?) but have resurrected themselves as Redstone Services. This last development deep concerns me and I am wondering if they are just washing their hands of us.
      Edge Consulting details:

      FAQ’s

      Myself and colleague (+others) have been in contact with them, and they have provided a letter (had Cobham Murphy review in addittion, and letter fine) - they are in addittion offering full support and are taking advice from a big 6 firm - if you look further back in the thread you will see both the letter, and details.

      HMRC have confirmed receipt of this letter with rather a vacant response

      Comment


        In the beginning . . . .

        Scare mongering is a terrible thing but if there is an elephant in the room it is hard to deny!

        Most people are concerned with the current spate of 2008/09 assessments but this is the tip of the iceberg and is everybody going to panic at least for the remainder of 2013 each time something from HMRC lands on the doormat.

        Over 300 posts and not a lot of progress unless there is an understanding of what and how your opponent intends to achieve their objectives.

        Just a reminder, that THEY are listening to this.

        Comment


          Originally posted by Michael J Perry FCA View Post
          Just a reminder, that THEY are listening to this.
          Indeed, and no doubt perhaps enjoying in a perverse way that they have opened a new front in their attack on avoidance schemes.

          However ALL remember case law has proved MANY of these arrangements to be lawful. Also that there may be huge differences in how these schemes have been setup and administered. You can NOT generalise and believe all arrangements are the same, I know HMRC are trying to lump ALL EBT's together but at the end of the day a tribunals decision will be settled on the specifics of each arrangement.

          Murray Group won their appeal on the actual details....and its the details that our legal professionals make
          judgements on.

          Remember everyone, that everyone has a position/viewpoint, what HMRC are doing is bordering on harrassment, no legal determination has yet taken place on many of these schemes, HMRC have to prove that what was done was illegal. Many of these arrangements have taken EXTENSIVE advise from TAX EXPERTS who have studied the actual DETAILS of what is legal.

          Ultimately its the legal details, the fine points of law that decide what the outcome will be.

          PLEASE ALL WHO ARE WORRIED, EDUCATE YOURSELVES, PLENTY OF CASE LAW APPEALS TO READ UP ON. HMRC HAVE TAKEN A STANCE THAT NEEDS TO BE DETERMINED BY LEGAL PROFESIONALS, WHO DO LOOK AT POINTS OF LAW.
          Last edited by LandRover; 25 February 2013, 09:47.
          http://www.dotas-scandal.org LCAG Join Us

          Comment


            Any Historical References?

            All the cases I have read and seen are between EBTs and HMRC and none between HMRC and Individual Contractors.

            Does anyone has any reference to what has happened before? Feels like snow is right in saying should it not be between Employer and HMRC to sort out if these are to be considered as loans or not. I was given a very clear loan contract and P11D from my employer. Why is HMRC following up with me and not my old employer?

            Comment


              Information

              Originally posted by varunksingh View Post
              All the cases I have read and seen are between EBTs and HMRC and none between HMRC and Individual Contractors.

              Does anyone has any reference to what has happened before? Feels like snow is right in saying should it not be between Employer and HMRC to sort out if these are to be considered as loans or not. I was given a very clear loan contract and P11D from my employer. Why is HMRC following up with me and not my old employer?
              See post #311.
              Last edited by administrator; 25 February 2013, 11:03. Reason: Added link for those who can't work it out ;o)

              Comment


                Although it's been stated that cases can't be dealt with on an individual basis, everyone should remember that ultimately it is the schemes that are being tested, not the individual. Sure it is the individual under the kosh with HMRC but when cases reach tribunals it will be the scheme that is scrutinised, and its legitimacy has been determined (or not) then this ruling will be used going forward for all users of that scheme.

                The way I see it is:
                1. HMRC send out letters to protect their rights as the 4 year window is closing.
                2. People send back the basic letter defending their position and asking for postponement etc.
                3. HMRC identify the actual schemes, eg TRM, Edge, AML etc. etc.
                4. HMRC identify some guinea pigs/sacrificial lambs and start turning the screws. These will be across of all the schemes they think they can win against.
                5. Those people must get representation. This is where it is our interests to band together and get the best counsel as we may only get one crack at defending each scheme.
                6. HRMC vs. Scheme users tribunal, then probably upper tribunal, possible judicial review/EC
                7 End game/outcome

                Point 3-4 are where we need to get organised. If your promoter can't act because they have gone, you should group together and bargain as a group for independent representation. If your promoter is still around in some guise then group together, tackle the promoter and get them to represent you.

                Don't be afraid to name and shame those that think they can get scheme fees on the way in and then rinse you for tax consultant fees on the way out.

                The Tax Tribunal

                Just remember, at this point it is not the end of the world. HMRC are under political pressure. They need to protect their position hence the slew of 08/09 notices. HMRC's position is OPINION, not fact and this will only get decided during tribunals (First or Upper), or even later.

                Now is the time to get organised, some poor sods are going to be at the front of this. It's those that need our group support as their rulings will affect all of us.

                Comment


                  Excellent post above.

                  Thank you convict.
                  "I can put any old tat in my sig, put quotes around it and attribute to someone of whom I've heard, to make it sound true."
                  - Voltaire/Benjamin Franklin/Anne Frank...

                  Comment


                    Cascade EBT

                    For other contractors who have/are using Cascade, I have created a separate thread so we can group together and discuss moving forward.

                    http://forums.contractoruk.com/accou...ml#post1704590

                    Comment


                      Its in the Detail!

                      Originally posted by convict View Post
                      HMRC's position is OPINION, not fact and this will only get decided during tribunals (First or Upper), or even later.
                      Employee benefit trusts: Rangers wins 'big tax case' against HMRC

                      An EBT is a legal structure which can be used to deliver various benefits to employees. They were previously used to enable companies to minimise the income tax and national insurance charges on pay to high-earning employees and directors, as well as allow those companies to claim corporation tax deductions on payments into the trust. However, many of the previous tax advantages of that particular arrangement were removed as part of the 2011 Finance Act.

                      Tax expert Matthew Findley of Pinsent Masons, the law firm behind Out-Law.com, said that the case was not the first that HMRC had lost on the point. However, the fact that the first-tier tribunal had again refused to regard payments made to a sub-trust as liable to income tax through Pay As You Earn (PAYE) or NICs would be a "cause for concern" for the department, he said.

                      "HMRC has made it clear that it objects to EBTs being used to provide loans to employees and its desire to recover what it sees as unpaid tax from this structure will not go away," he said. "It must therefore be likely that HMRC will appeal, despite this not being the first time it has failed to persuade a Tribunal that PAYE and NIC should be paid."
                      Last edited by LandRover; 25 February 2013, 11:27.
                      http://www.dotas-scandal.org LCAG Join Us

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