Edge EBT thread

[foobar]

Hi all - As we march towards tribunal I took some time to read the guidance notes for appealing to the FTT:

http://hmctsformfinder.justice.gov.u...s/t242-eng.pdf

Section 9 states quite plainly you should initiate dialogue with HMRC and to ask HMRC for a review if still not happy. It is a small point but how many of us have overlooked this? It might just be useful showing the FTT you have at least been open and helpful no?

Section 3 of the actual FTT appeal does ask if you have done this: http://hmctsformfinder.justice.gov.u...s/t240-eng.pdf

This is worth a look too:
http://hmctsformfinder.justice.gov.u...s/t241-eng.pdf

Had a good chat to my accountant - He feels the main point of the current witch hunt is really to simply get people out of these schemes more than anything. He felt that HMRC will be probably defeated in 5-6 years on a technical point but that is just his opinion...

Sorry if this sounds stupid but has anyone actually contacted HMRC and said "Look let's do a deal here. Knock half off what you want and then let's talk about settling. You win (kind of) and I win (kind of) but at least we don't waste years and crazy money going through courts." Surely a reasonable person would at least entertain this idea?

I am also wondering if it is an assumption that HMRC don't do deals period or have people indeed tried and been knocked back?

As it stands, there is simply NO incentive to settle as far as I can see.

Maybe this mess is what HMRC 'want' ?

[regron]

As it stands, there is simply NO incentive to settle as far as I can see.

Maybe this mess is what HMRC 'want' ?

Personally, I am convinced the SO was never introduced as an incentive, but more of a 'Look everybody, we tried to give people an opportunity for this to all go away, before we bankrupted them !!!!

[DonkeyRhubarb]

Sorry if this sounds stupid but has anyone actually contacted HMRC and said "Look let's do a deal here. Knock half off what you want and then let's talk about settling. You win (kind of) and I win (kind of) but at least we don't waste years and crazy money going through courts." Surely a reasonable person would at least entertain this idea?

I am also wondering if it is an assumption that HMRC don't do deals period or have people indeed tried and been knocked back?

We tried this on behalf of our 500 members but didn't get anywhere. We know of others who have tried with the same result.

In disputes like this, HMRC's policy is all or nothing. No concessions or discounts.

[chr16v]

Is the amount they are asking what you would have paid if you were PAYE ?

thats not as straight forward to answer as it sounds is it. If it was a simple as PAYE then i wouldnt have paid the extortanate EDGE managment fees, i would have claimed the proper milage allowances and expenses etc.
So i would say the amount HMRC want in the calculation is a lot more than i would have paid through PAYE under an umbrella.
What they are asking for is based on the figures in my annual return provided by advantage accounts on my behalf

[LandRover]

thats not as straight forward to answer as it sounds is it. If it was a simple as PAYE then i wouldnt have paid the extortanate EDGE managment fees, i would have claimed the proper milage allowances and expenses etc.
So i would say the amount HMRC want in the calculation is a lot more than i would have paid through PAYE under an umbrella.
What they are asking for is based on the figures in my annual return provided by advantage accounts on my behalf

Exactly my sentiments. What happens to all the expenses that weren't claimed and paid out of income?

[chr16v]

So may i ask what Edge people are doing.

- Are there other ex-Edge employees lurking around here who havent joined a group yet?

- Presumably there are quite a few more schemes than just the Norla/Edge ebt`s, does anyone know how we compare in total size compared to the other schemes?

I see there looks to be 2 groups dealing with Edge but i dont know if they share similar strategies or not. I have been PM`d by a helpful member that they contain contrastingly dfferent levels of paid up members and this is where i wonder "how" to choose the correct group to join.
Both groups are expensive but ultimately there isnt any other choice than paying hector of course.

Is there anyone or several members who can pm me a balanced comparison of what people know about the 2 groups.

[webberg]

Exactly my sentiments. What happens to all the expenses that weren't claimed and paid out of income?

If you had £100 of loan, HMRC has a choice of how to see it.

That's either £100 of "other income", no expenses as it's not earned income, taxable at marginal rate and perhaps liable to NIC (never been convinced of that) and perhaps IHT issues.

Or it's £100 you received AFTER tax, so £126 or so of real income and £26 of tax at 20% rates. (I'm rounding). You should should also gross again for NIC. In the absence of an employer applying PAYE, then YES, you could become liable in some circumstances.

Or it's £100 of written off loan - no relief for expenses.

Or ... how many options do you want?

In most schemes, HMRC seem to be basing their position on option 1 above. This produces a lowish tax charge, potentially favourable NIC position, etc. but no expenses because it is not from a self employed business enterprise and not from an employment (which anyway has a much higher expenses hurdle).

There is a potential analysis that might be better but that's my IP at this time - sorry.

[SimonJones]

IHT

There is more to all this. There is IHT to be considered on top of the tax due and interest. From what I've read/understand this can accumulate over the years and one can almost be paying the double. For example, on a 50K loan over 10 years can cost additional 5K in IHT. So in other words, if one has used the scheme for 4 years (over a 10 year period) than there is an additional liability of approx 20K on top of the tax due and interest. There is just no incentive whatsoever in settling!

[gettingangry]

Investigation Letters

Hi - this is a plea to the forum administrators.

I am looking for a copy of a letter that was sent informing me that the Edge arrangements were being investigated. I'm sure I received at least 3 of these between 2006 and 2011 - the last one was in 2011.

I'm pretty sure I saw on a thread (probably not this one) someone had copied the letter in a post. I've tried many an advanced search - all to no avail. One problem being that I can't seem to search for a phrase, and to be honest I'd be racking my brain to think of a phrase to look for.

I'd be looking for a thread discussing EBTs etc with a big post as the letter was copied word for word.

Can anyone help?

I would like to know what HMRC discovered during these investigations. If they found anything - why did they not tell us. If they didn't find anything - well that could pose a few interesting questions. I know Edge asked Advantage accounts to deal with any enquiries from HMRC. Advantage accounts in turn passed the job on to Covertax - but they had no absolutely no contact from HMRC and the relationship between Edge/Advantage and CoverTax was wound up in 2013

[meanttobeworking]

There is more to all this. There is IHT to be considered on top of the tax due and interest. From what I've read/understand this can accumulate over the years and one can almost be paying the double. For example, on a 50K loan over 10 years can cost additional 5K in IHT. So in other words, if one has used the scheme for 4 years (over a 10 year period) than there is an additional liability of approx 20K on top of the tax due and interest. There is just no incentive whatsoever in settling!

Regarding inheritance tax - would your example actually be valid? Would you get IT on a loan of £50k? I thought there was an allowance of £300k or so before IT kicks in?