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Loans from EBTs and other Trusts

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    First of all, thanks to Tax Should Not Be Taxing for sending me this information.

    The Rangers Football Club tax story has raised some interesting questions. It seems that a professional footballer is defined for tax as being on a fixed term contract - self employed with fixed contract terms.

    The following link made for a good read:
    http://http://www.bbc.co.uk/sport/0/football/14930737

    What is interesting is that HMRC are going after the company who paid out into the EBT, not the beneficiaries. Whilst company directors may have been involved as well as potential members of the PFA, no employee is being targetted for a liability.

    The following link is a settlement offer by HMRC:
    HM Revenue & Customs: Employee Benefit trusts, settlement opportunity

    It seems to me that in this case, the tax liability of an EBT falls not with the beneficiary but with the EBT provider. Whilst I don't know all the facts of the Rangers case, the above links imply that the responsibility for taxation is not with a given individual but with the organisation behind the EBT.

    In addition, I recently received my SA302 (the tax calculation) from HMRC which appears to show my income as it was declared on the SAR, excluding "white space" comment. This is very much in contrast to SA302s for prior periods which have been amended by HMRC to treat my Trust income as offshore partnership income (S58 FA2008).

    Whilst many of our recent returns are being investigated there seems to grounds for cautious optimism over who HMRC will chase.
    Join the No To Retro Tax Campaign Now
    "Tax evasion is easy: it involves breaking the law. By tax avoidance OECD means unacceptable avoidance ... This can be contrasted with acceptable tax planning. What is critical is transparency" - Donald Johnston, Secretary-General, OECD

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      Failure to Operate PAYE

      Originally posted by Emigre View Post
      First of all, thanks to Tax Should Not Be Taxing for sending me this information.

      Whilst many of our recent returns are being investigated there seems to grounds for cautious optimism over who HMRC will chase.
      Surely HMRC should be going after the big boys - namely the operators who dealt with their employees remuneration in an incorrect manner. Equally whether HMRC would be able to have directions passing the debt to the individual employee if not paid by the employer would seem to be arguable.#

      Time will tell
      interestign times ahead

      Comment


        Originally posted by ChimpMaster View Post
        What happens when the scheme members get an investigation opened based on their SA, but the scheme provider decides to shut down and run off into the sunset?
        Anyone?

        Comment


          Originally posted by ChimpMaster View Post
          What happens when the scheme members get an investigation opened based on their SA, but the scheme provider decides to shut down and run off into the sunset?
          This raises all sorts of questions. Firstly, if HMRC are chasing the providers, at least in the first instance, then HMRC should be running off into the sunset in hot pursuit. Clearly HMRC believe the providers are an easier target, probably both in terms of numbers but also in terms of the tax laws.

          Secondly, if HMRC/Tribunal/High Court determine that tax is due by the provider, as far as I am aware there is no facility for them to transfer that liability, at least not without getting in the Tardis again.

          In essence, they appear to not be vigorously chasing individuals (at the moment). However, they have opened enquiries and who knows what they have actually done with those enquiries. Certainly, I have been asked nothing whatsoever. Loans are not income, it's a fact, and is so regardless of who provided it.

          If you work for Barclays and get your mortgage from them too (at a commercial rate) HMRC do not treat the loan as income. Our situation is no different as individuals. HMRC simply appear to be trying to prevent the providers making a taxable deduction.

          However, on that basis it begs the question what do HMRC really think they can achieve by their enquiries. I have no confidence whatever in their integrity and through the BN66 debacle have become completely disillusioned by their deceitfulness. I won't be partying until they complete their enquiries favourably.
          Join the No To Retro Tax Campaign Now
          "Tax evasion is easy: it involves breaking the law. By tax avoidance OECD means unacceptable avoidance ... This can be contrasted with acceptable tax planning. What is critical is transparency" - Donald Johnston, Secretary-General, OECD

          Comment


            Self Assessment

            Just received a self assessment statement for 2008/09 which is when I was in the MP EBT scheme, showing I owe tax on all the loans. will send off to MP and see what they say.

            Comment


              Originally posted by Buzby View Post
              Just received a self assessment statement for 2008/09 which is when I was in the MP EBT scheme, showing I owe tax on all the loans. will send off to MP and see what they say.
              Are they asking for National Insurance as well, if so, at what rate?
              There's an elephant wondering around here...

              Comment


                snap

                Originally posted by Buzby View Post
                Just received a self assessment statement for 2008/09 which is when I was in the MP EBT scheme, showing I owe tax on all the loans. will send off to MP and see what they say.


                snap .. here we go again !

                Comment


                  sorry ..checked again and my self assessment statement was 07-08 ..so not the loan stuff ...

                  yet

                  Comment


                    so anyone know if the loans scheme's will be subject to Retrospection?

                    I got a new contract starting in a couple of months, starting to think it maybe wise to switch back to Ltd Co for that....anyone else in the same boat?

                    Comment


                      Originally posted by fractionater View Post
                      so anyone know if the loans scheme's will be subject to Retrospection?

                      I got a new contract starting in a couple of months, starting to think it maybe wise to switch back to Ltd Co for that....anyone else in the same boat?
                      Well I'm obviously going to say that no, properly consrrangements won't be challenged retrospectively, but I can only speak for my firm.

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