BIG GROUP

[ChimpMaster]

Agreed that closed years muddy the waters.

Our plan says that a closed year cannot result in liability for that year.

We also say that there are grounds for excluding such years from the DR charge - HMRC probably disagree and certainly many here will for reasons I posted about last week.

Many of us are still in shock that closed/unprotected years are being subjected to the DR charge, right back from 1999.

A closed year is by its very nature meant to imply certainty. Especially if one has declared everything on their tax returns and waiting 6 years for that certainty.

Is that any chance at all that HMRC will change their view of opening closed years for the DR charge?

[webberg]

Except if you've got closed (unprotected) years, where there's no interest.

For people who have all open (protected) years, BG may be worth a punt. Even though HMRC say CLSO2 has a limited window of availability, I can't see them ever turning anyone away who wants to settle. The terms may be slightly less favourable in a year or so but it's probably not a big risk.

It's definitely more of a dilemma for people with closed years.

Agreed that closed years muddy the waters.

Our plan says that a closed year cannot result in liability for that year.

We also say that there are grounds for excluding such years from the DR charge - HMRC probably disagree and certainly many here will for reasons I posted about last week.

[stonehenge]

In our view, the CLSO terms are pretty much worst case scenario. All payments are income and taxable. Interest is due on tax. By "concession" we will not tax fees paid to promoters as your income (we think that taxing these is actually quite difficult). IHT is due according to HMRC's view and any disagreement results in CLSO being withdrawn.

Except if you've got closed (unprotected) years, where there's no interest.

For people who have all open (protected) years, BG may be worth a punt. Even though HMRC say CLSO2 has a limited window of availability, I can't see them ever turning anyone away who wants to settle. The terms may be slightly less favourable in a year or so but it's probably not a big risk.

It's definitely more of a dilemma for people with closed years.

[webberg]

Here's fine for me thanks. There's been over 120 pages of discussion on Big Group and yet still lots of people don't know what you're advocating. Having a clear understanding is useful for people considering their options so can I suggest you post it here in as clear and concise way as possible?

It's not rocket science and I suspect every one of those pages refers to the core position that the loans, post Rangers, are probably employment income and that the employer is primarily liable.

Clear and concise enough?

You advocate laying out in detail close on 4 years of research, discussion with barristers, discussions with trustees and lenders, discussions with regulators, technical analysis, collection and collation of data, etc. Add in a dash of Government policy, HMRC tactical moves, political campaigning, media and economic research and emotional support for many.

Whilst I do not flatter myself that HMRC are shaking in their boots at the prospect of our resolution plan, I am increasingly convinced that they are being fed items from this forum and that some of these have led to changes in legislation. Paranoid? Possibly. But I see sufficient connection.

So. I'll not post a full analysis. I repeat. Call us and we'll explain.

[webberg]

In terms of extending the analogy above.

We say that you may join our plan and if it wins, then you pay less. In some scenarios, that "less" may be very little. In others, it may be around half of the CLSO value.

If we lose, what then?

In our view, the CLSO terms are pretty much worst case scenario. All payments are income and taxable. Interest is due on tax. By "concession" we will not tax fees paid to promoters as your income (we think that taxing these is actually quite difficult). IHT is due according to HMRC's view and any disagreement results in CLSO being withdrawn.

If you don't deal with the loan (write off usually), then HMRC reserve the right to bring into tax, a subsequent loan write off (IHT) and possibly tax the "distribution" from a trust if you repay the loan and have the money returned to you via a perfectly legal mechanism put in place a decade ago and long before this was all "avoidance".

And if you ask HMRC really nicely, they'll give you payment terms that will hurt but are slightly better than insolvency.

How can the final position be worse than the above, except by the continued accrual of interest?

Penalties?

A penalty is there to discourage certain behaviours. Those behaviours are usually the non declaration of income, deliberately or otherwise, or the claiming of relief that is (in the eyes of HMRC) not due.

Penalties are mitigated were, for example, co-operation is shown, full response to enquiries made, etc.

In the majority of instances, the behaviours that could lead to a penalty have already happened, long ago. Loans have not been noted on tax returns. Income has not been declared. There is nothing we can do now about that.

Are we looking at how to mitigate the possible imposition of a penalty? yes.

So, we accept that not taking up CLSO means that there is an increased risk of a penalty in due course, if our analysis is incorrect.

Some clients accept that as part of the equation. Some say that the tax alone is pushing them to insolvency so adding the burden is irrelevant. Some understand that penalties will be threatened anyway "pour encourager les autres" and accept it as part of HMRC's bullying campaign.

We cannot and do not guarantee our plan will work.

We cannot and do not guarantee that the result at the end of the day will be less than or equal to the CLSO terms.

Let's however retain a sense of balance and not become hysterical. If a penalty is applied, will it be 200%, 100%? I very much doubt it. Might it be 5%? Probably be a bit higher than that. Will we resist it to Tribunal, certainly? Will we win that challenge? Who knows?

I understand why everybody wants certainty. Most of you were sold certainty and now that has disappeared like mist on a sunny day, (along with the promoters), you are rightly applying a more rigorous approach to anything that looks too good to be true.

If I had a sure and certain plan leading to a guaranteed result, I would be very busy and no doubt, in receipt of a lot of fees.

I don't.

I have a plan that has a chance of achieving a lower result than CLSO and in my view, if it fails, the final position will not be much worse than what is on offer now.

So what about fees? Don't they make the result worse?

Of course.

Big Group was designed to be an affordable way for most contractors to have access to the sort of expertise that normally comes at several hundred pounds an hour. The fee is £18 a month.

When we moved from research to execution, we advertised this fact and were very clear that if you joined pre July 2016, you would be included in the resolution plan for no extra cost.

If you joined after that date a further fee would be due, in three instalments between April 2017, 2018 and 2019.

If you join now, that fee is slightly higher, but again in instalments on joining, April 2018 and April 2019.

So yes, fees are to be taken into account. We have tried to be fair and reasonable on these. Some will find our fees high, some not. Compared to the fees paid to promoters, dare I suggest that we are not in the same league. We understand however that paying to defend a position that you were told was certain and solid, is not always palatable.

There are plenty of firms out there who can help and some will be cheaper and some not.

[DaveB]

Here's fine for me thanks. There's been over 120 pages of discussion on Big Group and yet still lots of people don't know what you're advocating. Having a clear understanding is useful for people considering their options so can I suggest you post it here in as clear and concise way as possible?

And as has been said repeatedly, anyone who wants to know more is free to contact them directly to discuss their circumstances rather than blurting it out on a forum we know HMRC reads.

[malvolio]

Here's fine for me thanks. There's been over 120 pages of discussion on Big Group and yet still lots of people don't know what you're advocating. Having a clear understanding is useful for people considering their options so can I suggest you post it here in as clear and concise way as possible?

Good idea. Let's all tell HMRC what we're planning so they can impose a rule variation or produce an interpretation of the law that makes it impossible for BG's case to proceed.

[Invisiblehand]

Can I suggest that rather than post what you think we are doing, that you call us and we will tell you what we are actually doing?

Here's fine for me thanks. There's been over 120 pages of discussion on Big Group and yet still lots of people don't know what you're advocating. Having a clear understanding is useful for people considering their options so can I suggest you post it here in as clear and concise way as possible?

[webberg]

I thought BG was designed to settle?

Can I suggest that rather than post what you think we are doing, that you call us and we will tell you what we are actually doing?

[webberg]

Just so I can understand it, you are saying that if someone's bill is £100,000 then doing whatever BG is doing means they pay £50,000 (plus your fees) 65% of the time or £100,000 (plus your fees) 35% of the time. Is that right?

There is no risk at all that you might end up paying more than £100,000?

And you won't say what the idea is? So how can anyone make a judgement?

Ah, just found this thread that is helpful in making a judgement: https://forums.contractoruk.com/hmrc...following.html

From my perspective, if a client of mine wants to go to the FTT and they have the strongest set of facts and they tie in with the policy objective of the legislation, the chances of success are no more than 75%. That's the best case. To go against the policy objective where (in HMRC's and the tribunal's mind) there is clear tax avoidance reduces the chances of success hugely.

If any idea to try to get around the April 2019 loan charge involves taking any active steps (other than reporting / litigating / settling) then in my view the chance of success goes down way more, and the risks go up hugely (GAAR penalties anyone)?

For the avoidance of doubt, we have no plans that if executed, avoid the DR charge.

Whilst I accept that my interpretation of elements of that charge and the CLSO terms are at variance with the present sentiment here (and for my own sanity have stopped saying why), our view is that in many (not all) cases, liability on payments should have fallen on employers and that under general principles the payments were never within Part 7A and therefore cannot be within the DR charge.

That is not a view that HMRC share (probably, we're seeing them on Thursday and it's on the agenda) and a literal reading and interpretation of the DR charge legislation says that you could find that an employer is liable - or rather was liable - but as they are no longer around, we'll transfer to employee.