2019 tax charge - consultation preparation

[Whysoserious]

These clever peope make a killing on highly priced advice without going to jail for fraud when their schemes fail, but the clients get burnt in the end.

Not one single loan scheme has failed to date.

[centurian]

Not one single loan scheme has failed to date.

Murray Group...

Pending appeal at the Supreme Court of course, but it was deemed to fail at a lower court.

[Fred Bloggs]

Murray Group...

Pending appeal at the Supreme Court of course, but it was deemed to fail at a lower court.

I understood Murray Group had won 2 and lost (the last) 1?

[Whysoserious]

OK firstly to quote directly from the published judgement on the case..
"with the result that the obligation to deduct tax under the PAYE system fell on the employer who made such a payment.”

If the Murray decision remains unchanged, the tax liability therefore falls on the employer, not the employee.

Secondly, three QCs in this area have gone on record pulling apart the decision to award in favour of HMRC. One of them commented that the decision was largely based on New Zealand Tax Law, not UK Tax Law. To name only one of the many holes found in the judgement.
It is therefore generally accepted that the decision will be overturned in favour of Murray at the Supreme Court.

HMRC know this, hence the distinct lack of celebration from the 'victory' at the Court of Session.

[Iliketax]

It is therefore generally accepted that the decision will be overturned in favour of Murray at the Supreme Court.

I struggle big time on your 'generally accepted' point. Many of those who've commented have a vested interest in maintaining that view. After the Supreme Court's judgement on UBS, I would say that the odds of Murray Group winning are small. Not vanishingly small but small nonetheless.

[Whysoserious]

I struggle big time on your 'generally accepted' point. Many of those who've commented have a vested interest in maintaining that view. After the Supreme Court's judgement on UBS, I would say that the odds of Murray Group winning are small. Not vanishingly small but small nonetheless.

I struggle to see how the UBS case has any correlation to EBT and loan schemes. We shall just have to wait and see who is right and who is wrong.

[AtW]

Not one single loan scheme has failed to date.

Not for sellers of the loan schemes, but for the buyers situation is very different, the end result is terrible for a lot of people and it makes little difference if technically "loan" schemes "worked".

Specifically HMRC will get loan users with new tax and lets not forget APNs and years of anxiety, divirces, bankrupcies - how can you say loan schemes did not fail for the buyers???

[EBTContractor]

When is the Murray vs HMRC decision due?

[Iliketax]

I struggle to see how the UBS case has any correlation to EBT and loan schemes.

It's worth a read. Basically UBS wanted to pay its staff and decided to do it in a fancy way that, they claimed, meant no tax was paid. Most loan schemes do the same thing, but the fancy way of doing it is with a trust and a loan. The Supreme Court said they can ignore something fancy that has "no business or commercial purpose" which meant that what the UBS guys got was taxed as a bonus.

So turning to loans, I struggle to see how paying someone via a trust and loan (as opposed to paying them with normal a normal salary/bonus) has any business or commercial purpose. In other words, getting cash to individual clearly has a business purpose. But doing it via a trust and a loan?

And the FTT is already applying the UBS decision in a completely different context to a bonus scheme, for example:

128 In our judgment, these authoritative comments are of general application to the construction of tax legislation where (as in this appeal) avoidance of tax is sought to be achieved by the use of a provision apparently providing for a tax exemption, by its application to ‘transactions having no connection to the real world of business’ such as we find the transactions by which the Partnership arranged to receive the Helios dividends to have been.

IWe shall just have to wait and see who is right and who is wrong.

Yep

[Fred Bloggs]

When is the Murray vs HMRC decision due?

Murray Group have been granted an appeal at the supreme court. I can't see it being settled this year?