Schemes like Vanquish which claim to bypass the Loan Charge

[TonyT]

AML Recomended Vanquish

These schemes are extremely aggressive and very high risk.

In case you aren't aware of this, the LC is a law passed by Parliament. It was a major part of the Budget. Anyone using a scheme, to get around it, would be regarded as deliberately and wilfully flouting the law.

HMRC have to uphold the law, and they have already said that they will crack down hard on any arrangements which attempt to circumvent it.

There is a high likelihood of harsh penalties.

Think very carefully before embarking on this perilous path!

Dear all, please be very careful not to use this Vanquish. They came recomended by the very same bunch "AML" who put all users of their planning in this mess and dissapearing into thin air.

Not worth getting into a deeper mess then people are in already.

[pateen]

The more I think about this, the more I am not going to use them.

It just defers the final payment for few more years before HMRC catch up.

[webberg]

The more I think about this, the more I am not going to use them.

It just defers the final payment for few more years before HMRC catch up.

If the scheme is eventually proven to be ineffective you might also incur a hefty penalty.

[ric_77]

Indeed its just a reinvention of the sales pitch and unjustified claims that we were led to believe originally, and as others have said above, it is simply just delaying the inevitable outcome only with possibly greater risk.

PTS / Vanquish brand is just some project born after the recent change in AMLs fight that has done a complete u-turn from challenging HMRC to 'offering us help with settling'. Nonsense. Its the same outlaws at Knox House, the same building, setting up a new 'company' preying on us at our weakest and extracting further costs based on our fears and helplessness.

They are company i have many words for, none of which would be suitable on this forum.

[Dmac]

Vanquish on the prowl again

Received another Vanquish email today. They are still convinced that their "scheme to solve a scheme" is compliant, and has "Tax Counsel support".

When I replied previously to ask for details of that "support", ie, who was it from, when, what were the details and analysis, they completely ignored my email.

Now they are asking for an "initial fee" of £250 just so they can get the "planning provider" (whoever they are) to provide them (Vanquish) with details of my loans outstanding.

Lastly, they ominously warn "Taking no action is not an option".

Clowns.

[webberg]

Unfortunately we will see a resurgence of "solutions" to the loan charge as we move closer to the date of its operation, regardless of the review secured by LCAG.

Be clear.

The chances of any "loan to replace a loan" scheme working are low (in our opinion) given the purpose, intent and wording of the anti avoidance rules in the legislation.

The chances of any "loan to replace a loan" scheme working without litigation is (in our opinion) NIL.

Consequently, if you are tempted by such schemes, ask them to put up money for the inevitable fight in Court - say £1m - and to make it visible to all users (and preferably under their control).

This is a better test of the confidence they have in their scheme than any QC opinion.

[Bertie365]

So I spoke to these folks a few days ago and this is how they explained their scheme.

Essentially the loan recipient tells the trust they can't pay them back, and the trust agrees to accept 5% of the sum owed as final settlement. The trust absolves you of any further obligations to them, and they assume the liability for the outstanding debt.

I asked if this amounted to a loan to pay off the existing loan, they were adamant that it wasn't, that no third party was putting up money to get me out of the loan, because they would be writing me off, and finding the money to plug the hole was then their problem.

I'm extremely sceptical about all this, but not knowledgeable enough to know if this makes any sense, or HMRC will see right through it.

[stonehenge]

...they would be writing me off...

Possibly a prophetic slip of the tongue.

[GreenMirror]

I'm extremely sceptical about all this, but not knowledgeable enough to know if this makes any sense, or HMRC will see right through it.

Lets assume for a moment it is legal. HMRC will use their time machine to make it illegal retrospectively.

I am not sure why anyone is speaking to them?

[webberg]

I suspect that the use of "legal" and "illegal" is shorthand for "works" and "does not work", but it illustrates one of the many problems here.

Short of fraud, it's actually quite hard to do something "illegal" in tax.

You can make a decision as to the treatment of some income or expense that is incorrect because you read the law in a way that HMRC does not, but that does not make it illegal.

Tribunals and Courts spend a lot of time looking at transactions or series of transactions and applying the tax law to them.

In years gone by, the application of the law was literal, i.e. if the law said if A and B then C, that was the touchstone.

That view changed arguably in 1982 when a famous (Ok, in tax circles) case called Ramsay was decided. This essentially said that the rule should be substance over form. Moreover, that case and those that followed, permitted "recharacterisation" of transactions. Basically documents that claimed to create a tax effect but had no commercial effect, could be ignored.

The favoured view in Tribunal and Court now has moved on again. Now we have purposive interpretation. This means - establish the facts and apply the law, as written and intended, to those facts.

As you can see from the above, there is no question of legal/illegal.

Stride and his HMRC supporters (or is it the other way around?) are now saying that the schemes of the past were "always ineffective based on the law at the time". (or to use Stride's new favourite word - having been rapped on the knuckles for calling avoidance illegal - "defective). This can only be the case by applying the latest judicial principle to law that in existence before it was developed.

That is not impossible and past law is regularly interpreted with the benefit of later (and supposedly better) principles.

It may feel, but is not, retrospective.

(A poor comparison would be to consider the sort of sexist and discriminatory behaviours at work many of us experienced in the 80's and 90's with the horror that the new generation in work view such attitudes. I'm sure many of who have had long working lives also view with embarrassment some of the things we have seen or perhaps done, when viewed through the lens of today).

There is also a practical reason why HMRC does not push the "illegal" issue. Allegations of illegal behaviour have to cross a much higher threshold - legally - than showing that a view of tax law was incorrect. Even in tax avoidance cases which are arguably more egregious than anything done in contracting, steer clear of even suggesting illegality.