HMRC enquiries for EBT schemes through SANZAR

[DonkeyRhubarb]

NICs

This may be a can of worms HMRC don't want to open.

If they were to apply NICs to the loans then this would mean they were treating them as employment income.

If it's employment income then, in the first instance, the employer is responsible for PAYE/NICs. Moreover, HMRC should also be going after the employer for employers NICs.

Even if the employer is an offshore company, and is outside the PAYE system, there is legislation that enables HMRC to pursue UK companies in the payment chain for uncollected PAYE/NICs.

It probably suits HMRC's agenda to treat the loans as non-employment income so they can pursue the taxpayer rather than the company.

[malvolio]

This may be a can of worms HMRC don't want to open.

If they were to apply NICs to the loans then this would mean they were treating them as employment income.

If it's employment income then, in the first instance, the employer is responsible for PAYE/NICs. Moreover, HMRC should also be going after the employer for employers NICs.

Even if the employer is an offshore company, and is outside the PAYE system, there is legislation that enables HMRC to pursue UK companies in the payment chain for uncollected PAYE/NICs.

It probably suits HMRC's agenda to treat the loans as non-employment income so they can pursue the taxpayer rather than the company.

The alternate explanation being that HMRC consider it is the taxpayer who is at fault by setting up an artificial structure so as to avoid paying the taxes owed on their income so they are the target...

[jbryce]

round and round we go......

The alternate explanation being that HMRC consider it is the taxpayer who is at fault by setting up an artificial structure so as to avoid paying the taxes owed on their income so they are the target...

......a vehicle for avoiding NICs? Bit like a limited company then.......

[malvolio]

......a vehicle for avoiding NICs? Bit like a limited company then.......

That's why chasing NICs is a lot trickier. Income tax is only owed by one person

[DonkeyRhubarb]

The alternate explanation being that HMRC consider it is the taxpayer who is at fault by setting up an artificial structure so as to avoid paying the taxes owed on their income so they are the target...

The question is, what are the loans? Are they remuneration received in connection with employment?

If they are, then they should be subject to PAYE/NICs.

Because HMRC are treating them as "other income", and only assessing them for tax, they are letting the employer off the hook for failing to deduct PAYE/NICs and not paying employers NICs.

[malvolio]

The question is, what are the loans? Are they remuneration received in connection with employment?

If they are, then they should be subject to PAYE/NICs.

Because HMRC are treating them as "other income", and only assessing them for tax, they are letting the employer off the hook for failing to deduct PAYE/NICs and not paying employers NICs.

Fair point. Although I'm sure HMRC will say they are taxing you on the benefit of having the loan which was available to you as income, rather than it being straight earned income itself.

I'm not that sure HMRC really have worked this all out yet; having kicked off the tax grab they suddenly realise that there are also NICs in the frame and they don't have a protocol for that yet. As usual, they are taking what should have been a fairly straightforward challenge and turning it into a Kafkaesque nightmare for all concerned.

While I hold no candle for people trying to duck their responsibilities, it is increasingly ridiculous that several thousand people are going to be stuck in limbo for years to come.

[DonkeyRhubarb]

While I hold no candle for people trying to duck their responsibilities, it is increasingly ridiculous that several thousand people are going to be stuck in limbo for years to come.

Yes and, trust me, it takes a heavy toll. (11 years of being under investigation; 6 years since BN66)

Whatever the rights and wrongs, there is an argument for trying to settle, putting it behind you and moving on with your life.

HMRC don't care how long it takes. However, your sanity may not be as enduring.

[jbryce]

Contractor Helpdesk

.....has anyone submitted the settlement letter to CH for consideration?
If so - did they reply.

[TonyTucker]

I got an email from them to choose from 1 of 4 options re: settlement.

The tone seemed to be they expected everyone to settle

[tax is taxing]

CH

I got an email from them to choose from 1 of 4 options re: settlement.

The tone seemed to be they expected everyone to settle

I got a copy of the email too.

I thought the tone went the other way; i,e why would any body want to settle.....