Offshore Option

[Vallah]

If HMRC win the BN66 case then this has got to set some form of legal precedent.

No doubt some will claim that it only applies in the narrow circumstances of the DTA but to me that would be wishful thinking, and I'm sure HMRC will not see it like that.

In any case, notwithstanding retrospection, there is always a risk if HMRC takes a scheme to court that it could be ruled ineffective.

The problem is that the wheels in HMRC turn very slowly and it can be several years before they start sniffing around.

As an aside, I notice on another thread that Norla have shut up shop. I wonder where that leaves their users if HMRC comes knocking.

You just can't compare the Montpelier scheme with EBTs though DR. As you say, BN66 was to do with a very specific area of law concerning how their scheme ran. EBT schemes were a much simpler, less convolutes scheme, which had nothing to do with Tax Agreements and the like. All income was properly taxed at UK rates of pay. If they want to go after EBTs retrospectively then they'd have to go after every single person in the UK who'd ever had a loan from a company that was subject to a BIK charge. They've done a very good job at changing the legislation to make EBTs not viable any more, but in doing so thay've as good as said that the existing legislation was sound. There'll be no BN66 style "clarification" here.

[DonkeyRhubarb]

You just can't compare the Montpelier scheme with EBTs though DR. As you say, BN66 was to do with a very specific area of law concerning how their scheme ran. EBT schemes were a much simpler, less convolutes scheme, which had nothing to do with Tax Agreements and the like. All income was properly taxed at UK rates of pay. If they want to go after EBTs retrospectively then they'd have to go after every single person in the UK who'd ever had a loan from a company that was subject to a BIK charge. They've done a very good job at changing the legislation to make EBTs not viable any more, but in doing so thay've as good as said that the existing legislation was sound. There'll be no BN66 style "clarification" here.

I mostly agree with you. They are not going to retrospectively legislate for schemes prior to Dec 2010. I do have 2 concerns though.

1) Some EBT schemes are continuing to operate because "technically" they do not appear to be caught by the disguised remuneration legislation. Others may be modified to circumvent the new rules. IMO, these would be at risk of future retrospection back to Dec 2010 because it could be argued that they are clearly flouting the intention of the legislation.

2) I know of a few EBT schemes which are being investigated by HMRC for use prior to Dec 2010, despite the fact that they have been closed by the legislation. HMRC may well go after other schemes and, whilst they may not have a leg to stand on, they can still put people through the mill creating loads of FUD. See here:

http://forums.contractoruk.com/accou...er-trusts.html

I don't know how long your particular scheme has been operating but it may be too early to conclude that your users are in the clear.

HMRC don't operate with any sense of urgency and like to take their time in these matters!

[Vallah]

Anybody offering EBTs going forward is on very dodgy ground, despite what Alan Jones said in one of the threads last week.

I'd be interested to know what any HMRC investigations into EBT companies centred on, as all our dealings with them centred on whether we were an MSC, which we clearly weren't.

[DonkeyRhubarb]

Anybody offering EBTs going forward is on very dodgy ground, despite what Alan Jones said in one of the threads last week.

I'd be interested to know what any HMRC investigations into EBT companies centred on, as all our dealings with them centred on whether we were an MSC, which we clearly weren't.

I have seen a copy of an enquiry letter for one of the schemes and it looked like BS to me.

As I said, they may have nothing to go on but just the mere fact of being placed under investigation can be scary and they know it! I had an email a few weeks ago from one guy who was having sleepless nights over it.

Remember, they won't like the thought of several thousand people getting away with this. They don't seem to mind so much when it's big business avoiding tax but they hate it when ordinary joes like us do it.

I wouldn't be at all surprised to see them take some of these schemes to court even if they haven't got a leg to stand on.

[TheFaQQer]

As is your right of course. I'll just point out that lots of people, after weighing up the risks, have decided that they like the service we provide.... If they think the risk is worth taking they sign up, if they'd rather pay higher rates of tax, they don't.

If your scheme is legal, as you keep saying, then surely there are no risks to explain, so everyone must take you up on your scheme?

Alternatively, there are considerable risks of using the scheme, which you aren't prepared to publicise here.

[Vallah]

If your scheme is legal, as you keep saying, then surely there are no risks to explain, so everyone must take you up on your scheme?

Alternatively, there are considerable risks of using the scheme, which you aren't prepared to publicise here.

I'm not prepared to publicise it on here because I do not wish to give out commercially sensitive information to either our competitors or HMRC.

[jmo21]

Why are you guys bothering, this sales guy is never going to give in and give you the answers you want!

[sal626]

To be fair to Vallah, I did PM him some time ago and one of his colleagues did call me back and provide me with all the info, and answered all my questions. There was no hard sell, and they certainly did not try and hide the risks…

[TheFaQQer]

I'm not prepared to publicise it on here because I do not wish to give out commercially sensitive information to either our competitors or HMRC.

Well, there are either risks or there aren't.

If you are as sure as you make out, why are there risks?

[Vallah]

I'm not a sales guy, I just wanted to give an alternate view to that provided by people on here who have a vested interest in making schemes that are obviously a rival to their service seem as dodgy as possible. We've had over 10,000 contractors use our service at one time or another, and none have faced any of the doomsday scenarios presented in this forum.