Murray Group (Rangers) tax case - decision today?

[jamesbond007]

There are time limits for assessing PAYE.

Other than in the case of fraud, HMRC can only go back 6 years.

That means 2008/9, and prior years, are out of time.

So from what I have read the judges confirmed that the responsibility for the payment of tax fell on the employer in each case.

So am I right in thinking that this judgement only relates to PAYE due by the companies we were employed by at the time, therefore under this ruling they (if they are still around) will be liable for the tax and NOT the employees?

[webberg]

So from what I have read the judges confirmed that the responsibility for the payment of tax fell on the employer in each case.

So am I right in thinking that this judgement only relates to PAYE due by the companies we were employed by at the time, therefore under this ruling they (if they are still around) will be liable for the tax and NOT the employees?

Perhaps a bit hasty but the assessments were for PAYE due from the employer. As these are employer obligations, the ability of HMRC to visit the tax upon recipients is limited.

There are circumstances in which PAYE can be demanded from employees and for those recipients in positions of influence and control of the companies, this is a higher risk. For the players? Probably a less obvious problem.

There are further implications here as well and a thorough reading (and re-reading) is probably required before any public comment.

[AtW]

Surely if scheme provider is liable for tax then they would be forced to call in the "loans" they gave to scheme users...

[DonkeyRhubarb]

Surely if scheme provider is liable for tax then they would be forced to call in the "loans" they gave to scheme users...

Typically, the loans were issued by Trusts not the companies themselves.

There are strict rules governing Trusts. One is they can't do anything to the detriment of the beneficiaries. Obviously, calling the loans in would be detrimental...

[ASB]

I wonder if any of the contracts signed by scheme users contained any indemnities back to the "employer" and whether these might be effective ?

I realise any indemnity would not help HMRC in transferring any debt, but it might be an avenue of attack against the scheme users if the scheme provider were ultimately held liable.

Of course there are huge leaps there in assuming that this ruling will stand and will also apply, but it is further case law which may possibly be relevant to some scheme users.

[Not Losing Any Sleep]

I wonder if any of the contracts signed by scheme users contained any indemnities back to the "employer" and whether these might be effective ?

I realise any indemnity would not help HMRC in transferring any debt, but it might be an avenue of attack against the scheme users if the scheme provider were ultimately held liable.

Of course there are huge leaps there in assuming that this ruling will stand and will also apply, but it is further case law which may possibly be relevant to some scheme users.

Judgement now out.

Judgment

[AtW]

Typically, the loans were issued by Trusts not the companies themselves. There are strict rules governing Trusts. One is they can't do anything to the detriment of the beneficiaries. Obviously, calling the loans in would be detrimental...

But if the court says it's not a loan, but "emoluments or earnings"? Recalling the part of the loan sufficient to cover taxes seems a no-brainer, especially since court said those ain't loans - surely that should be enough to question creation of the Trust itself since the only funding it had was for those "loans"? The Revenue might just not bother and issue APNs.

[webberg]

But if the court says it's not a loan, but "emoluments or earnings"? Recalling the part of the loan sufficient to cover taxes seems a no-brainer, especially since court said those ain't loans - surely that should be enough to question creation of the Trust itself since the only funding it had was for those "loans"? The Revenue might just not bother and issue APNs.

The Court is hearing tax matters, not matters of legal construction or trust law.

The loans are loans in legal form. The trust did not get a loan but a contribution and that would not be reclaimable.

APN has been done to death elsewhere.

To get an APN you need to have met the conditions of

1. Open year
2. Claim made that arrangements produce a tax benefit
3. DOTAS/GAAR/FN

You need all three. Nothing in the decision changes that.

[DonkeyRhubarb]

If a court ruled that the contractor loans should have been treated as earnings from employment then HMRC could be in a spot of bother.

They would first have to chase the employers for tax and class 1 primary & secondary nics.

Getting the liability transferred to the employees under either Reg 72 or 81 would not be easy, and then there's the 6-year time limit to contend with anyway.

I've always felt that it was a bit convenient of HMRC to treat the loans as other income so they could pursue the individuals rather than the employers. But is that the correct tax treatment? Hmmm.

Definitely worthy of further investigation.

[DonkeyRhubarb]

ps. it would be a bit of poetic justice if HMRC had to chase the employers (promoters).

For too many years, the promoters have got away scott free raking in £millions. It's about time they shared a bit of the pain.

And, if HMRC can't collect off them, well that's their problem.