Murray Group decision 5th July

[BrilloPad]

No, the loans are loans. The employer should've paid PAYE on the sums placed in to the trust (the emoluments) long before it was loaned to any employee.

And the way the law stands, its up to the employer to pay.

[AtW]

Not in this case. It will require retrospective legislation.

A clarification perhaps.

[AtW]

No, the loans are loans. The employer should've paid PAYE on the sums placed in to the trust (the emoluments) long before it was loaned to any employee.

So if Employer pays gross to employee, thus failing to deduct all taxes, goes bust because no money left, then employee gets to keep tax free gross amount?

Perhaps in this particular case Liquidators will be obliged to sue those Trusts who got the money to demand part of the money returned, then Trusts will call in appropriate part of the loans to satisfy demand.

[Whysoserious]

Not everyone would complete self aessements. Why would an employee earning £10k complete a self assessment form.

[Dylan]

Employer was responsible for deducting correct amount of tax on behalf of employee, plus adding Employer NICs as it's own tax.

Employee is totally on the hook for his side of taxes even if employer failed to deduct, it's employee who files self-assessment for his own money, putting "loans" was wrong, so now lots more tax due.

It might take another 5 years of litigation to confirm this another obvious point of view.

Loans was correct.

This ruling concerns the money being paid in to the trust and the PAYE on it is the employers responsibility. In order for HMrC to collect from employee they must transfer liability.

[BrilloPad]

A clarification perhaps.

The implementation will be the same however it is worded. Transferring the burden of PAYE from employer to employee will not be taken well.

I suppose HMRC have opened the retrospective genie and all sorts will pop out.

[Dylan]

So if Employer pays gross to employee, thus failing to deduct all taxes, goes bust because no money left, then employee gets to keep tax free gross amount?

Perhaps in this particular case Liquidators will be obliged to sue those Trusts who got the money to demand part of the money returned, then Trusts will call in appropriate part of the loans to satisfy demand.

You might want to read the law rather than trying to point score on here. It has already been stated that they will have to transfer liability and there are conditions which must be met in order for that to happen. Maybe those conditions can me met, maybe not. Maybe HMRC should just do what is in the public interest and offer a settlement on sensible terms.

[Whysoserious]

Perhaps in this particular case Liquidators will be obliged to sue those Trusts who got the money to demand part of the money returned, then Trusts will call in appropriate part of the loans to satisfy demand.

Can't happen. The employer didn't issue the loans. A separate legal entity issued loans. The trusts don't legally owe any money back to the employer. The trusts do not belong to the employer.

That's like Tesco owing you money and you trying to sue Asda.

[AtW]

The implementation will be the same however it is worded. Transferring the burden of PAYE from employer to employee will not be taken well.

The tax burden (Income Tax, Employee NICs) is always with the employee. If employer makes mistake then employee still ownes the money, or 3rd party they nominated for payment. Ultimately it will come back onto employee.

[AtW]

Not everyone would complete self aessements. Why would an employee earning £10k complete a self assessment form.

But if they got £1 mln into EBT, which later was classified as emoluments then turns out they had to do it surely?