Loans from EBTs and other Trusts

[sal626]

As far as I know enquiries are still ongoing.

Which scheme were you with and for what years have you got the enquiry?

[timetogohome]

As far as I know enquiries are still ongoing.

Which scheme were you with and for what years have you got the enquiry?

I was with Norla/Edge for 1 year. The enquiry is for 2010-11. I got out of these schemes when the Govt announcement came out for 9h December 2010 which coincided with the collapse of Norla.

My concern is should I negotiate a settlement or hope HMRC do not have a case. I am currently look into see if anyone has any legal advice they can offer, and would be grateful if anyone who is in the same place has any pointers.

[Vallah]

Firstly, I apologies for raising this subject again.

Has anyone managed to resolve their HMRC enquiries, and what was the end result. Did you have to pay tax or are enquires still ongoing?

I received an enquiry today, and with the benefit of hindsight I would not have followed the advice of other contractors who extolled the virtues of EBT when I started out.

You have nothing to fear from an enquiry into an EBT scheme as long as it was run properly. Whose scheme were you using?

edit: sorry, just saw the above, Norla.

[sal626]

I was with Norla/Edge for 1 year. The enquiry is for 2010-11. I got out of these schemes when the Govt announcement came out for 9h December 2010 which coincided with the collapse of Norla.

My concern is should I negotiate a settlement or hope HMRC do not have a case. I am currently look into see if anyone has any legal advice they can offer, and would be grateful if anyone who is in the same place has any pointers.

There are a couple of threads on norla/edge here....ask admin for PM rights and get in touch with the norla/edge users from those threads. They may have some advice relevant to you. At least you will know what others in similar situation as you have done/are doing..

Give me a PM as well once you are set up...

[captainham]

You have nothing to fear from an enquiry into an EBT scheme as long as it was run properly.

Tell that to those on the NTRT thread

[Vallah]

Tell that to those on the NTRT thread

Why? The Montpelier/BN66 case doesn't have anything to with the use of EBTs, and HMRC would find it impossible to attack EBTs retrospectively.

[DonkeyRhubarb]

Why? The Montpelier/BN66 case doesn't have anything to with the use of EBTs, and HMRC would find it impossible to attack EBTs retrospectively.

Impossible?

If I was HMRC, I would view the current self-employed schemes as flouting the disguised remuneration legislation introduced a couple of years ago.

I would have thought this was a perfect candidate to justify retrospection on the basis that the clear intent of Parliament was to prevent this type of artificial avoidance involving trusts and loans.

Of course, if BN66 is anything to go by, it will take HMRC 7 years to dust off the time machine.

PS

Anyone in one of these schemes may want to reflect on what Justice Parker said in our high court case about "letting sleeping dogs lie". As he pointed out, any one of us could have sought closure of our enquiries, rather than just waiting to see what HMRC did about the scheme.

[captainham]

Why? The Montpelier/BN66 case doesn't have anything to with the use of EBTs, and HMRC would find it impossible to attack EBTs retrospectively.

DonkeyRhubarb has effectively answered for me, but anyway...WDRS.

Not saying BN66 is anything to do with EBTs, but the point is HMRC has decided to crack down on what they see as something unfair/dodgy (with BN66)...that's a fact, and if they choose to do the same elsewhere, then they will, unfortunately.

[Vallah]

Impossible?

If I was HMRC, I would view the current self-employed schemes as flouting the disguised remuneration legislation introduced a couple of years ago.

I would have thought this was a perfect candidate to justify retrospection on the basis that the clear intent of Parliament was to prevent this type of artificial avoidance involving trusts and loans.

Of course, if BN66 is anything to go by, it will take HMRC 7 years to dust off the time machine.

PS

Anyone in one of these schemes may want to reflect on what Justice Parker said in our high court case about "letting sleeping dogs lie". As he pointed out, any one of us could have sought closure of our enquiries, rather than just waiting to see what HMRC did about the scheme.

You're mixing up a lot of terminology there. Of course self employed schemes get round disguised remuneration legislation, as the legislation only affects employees. And even if they do go after the self employed schemes, they're still nothing to do with EBTs, which have effectively been shut down for two years now. And yes, I think it would be impossible for EBTs to be attacked retrospectively. The weigh of legislation is firmly against them.

[DonkeyRhubarb]

You're mixing up a lot of terminology there. Of course self employed schemes get round disguised remuneration legislation [DRL], as the legislation only affects employees. And even if they do go after the self employed schemes, they're still nothing to do with EBTs, which have effectively been shut down for two years now. And yes, I think it would be impossible for EBTs to be attacked retrospectively. The weigh of legislation is firmly against them.

It doesn't sound like that much of a stretch to retrospectively clarify the DRL so it catches the self-employed.

A lot depends on the amount of revenue at stake. HMRC seem to have a magic number of £200M, and obviously if they sit on these schemes for a few more years then that should easily have been surpassed.

The DTA scheme was relatively slow to take off but, at their peak in 2007, they were costing the Exchequer £50M/year.

From the little research I've done, the self-employed loan schemes are far more prevalent. I wouldn't be surprised if they're already costing the Exchequer £100M/year.

That's an awful lot of money that HMRC will be keen to get their hands on.