Tribunal and beyond

[webberg]

I had exposure to Marra, Kirium and Invicta (settled under CLSO1) - suspect that the arguments will be very similar to those raised in the Penfolds case (HMRC used Transfer of Assets as the main thurst of their argument which seems to be the same for the Penfolds FTT). Whilst, my interest at this point is purely academic, having settled, I would be interested to see what the FTT had to say about it - would be grateful if you could post a link once that judgement is available?

The core argument may be similar but far more expansive and we are entirely unbiased and have no historical or current connections to look out for.

ToAA which is used by HMRC as the bogeyman lurking in the shadows was pretty much dismissed as an effective argument in the Hoey case and hopefully will be consigned to whatever hole it came from.

FTT decisions (and higher Tribunals and Courts) are published online and I'm sure you can set a
tripwire there to get notified.

[Clairol]

Update please?

We will be in Tribunal within 6 months.

The challenge on Edge is for their loan scheme 2006 (? sorry on a train with no access to my database) onwards. Rangers did not defeat that scheme. Edge will be in Tribunal Q2 2020.

Any chance of an update on timing of the first set of schemes that WTT will take to FTT please? You mentioned writhin 6 months on this August post.

Many thanks.

[webberg]

Any chance of an update on timing of the first set of schemes that WTT will take to FTT please? You mentioned writhin 6 months on this August post.

Many thanks.

You will appreciate that I cannot "name names".

One scheme (which used shares/dividends/sales) will be in Tribunal within 3 months.

Another which alleged self employment and was almost certainly not, we are waiting on Tribunal to set a date.

Another is in Directions hearing. And on is pending.

All of the above are post 9/12/10 and we are pressing on.

We ahve progressed another which is pre 9/12/10. Clearly the news on the loan charge review will impact this and we await the legislation.

[Clairol]

You will appreciate that I cannot "name names".

One scheme (which used shares/dividends/sales) will be in Tribunal within 3 months.

Another which alleged self employment and was almost certainly not, we are waiting on Tribunal to set a date.

Another is in Directions hearing. And on is pending.

All of the above are post 9/12/10 and we are pressing on.

We ahve progressed another which is pre 9/12/10. Clearly the news on the loan charge review will impact this and we await the legislation.

Thank you Graham.
My open years are prior to 2007. I was wondering why these earlier years/schemes were not picked first for litigation by wtt as legislation was introduced at a later date. In my naivety I would have imagined they would have a better chance of success at ftt.

[webberg]

Thank you Graham.
My open years are prior to 2007. I was wondering why these earlier years/schemes were not picked first for litigation by wtt as legislation was introduced at a later date. In my naivety I would have imagined they would have a better chance of success at ftt.

Not really naive, but perhaps not fully aware of the position.

Prior to perhaps late 2009/early 2010, HMRC was not really aware of the scale of the use of loan schemes or were aware but had assigned no priority to them. Either way information on pre 2010 schemes is relatively sparse. For HMRC this became at once a problem (lack of sufficient data) and a reason to focus on later schemes.

Whilst unsaid, I suspect that their strategy was to "prove" that post 2010 schemes were really disguised remuneration - on general principles as well as because of a change of law - and that the ruling they obtained would make it "obvious" that pre 2010 schemes should have the same rules applied. If such a ruling could be obtained, then no need to reach the litigation hurdle required.

So, from HMRC's side of the equation, there is no pressure to bring a pre 2010 scheme to FTT.

From our perspective, finding solid information on pre 2010 schemes is nearly as difficult. We have got there now and we have an "agreement" with an HMRC that they will advance (or at least not object) to a pre 2010 case being heard. We expect that to be in FTT in 2020.

[DealorNoDeal]

So, from HMRC's side of the equation, there is no pressure to bring a pre 2010 scheme to FTT.

This might change now that pre-2010 loans are no longer covered by the LC and the Govt are giving HMRC extra resources to deal with this.

I'm sure the Govt will expect to see results in return for these extra resources.

[webberg]

This might change now that pre-2010 loans are no longer covered by the LC and the Govt are giving HMRC extra resources to deal with this.

I'm sure the Govt will expect to see results in return for these extra resources.

Entirely possible that a change in law will bring a change in strategy.

Remember however that all year with active enquiries prior to 2010 (I think the SAM report suggested that perhaps 40% of all instances of scheme use) still need to be resolved. Also the special unit HMRC is promising, will be looking to open up more years through means fair and foul.

The need to have an answer from a Tribanl for pre 2010 periods remains and that cannot be allowed to be the application of a set to circumstances and rules from a later period.

Our fight continues.

[DealorNoDeal]

I don't know how many individual schemes there were but there have been dozens mentioned on this forum alone.

I doubt HMRC will want to take action against each scheme individually. They'll be looking for "catch-alls". That was the "beauty" of the LC; it snared everything, even closed years.

I know you and I disagree about the LC forcing people's hand but it certainly meant people could no longer just carry on doing nothing and waiting to see if HMRC took any further action with their enquiries.

[webberg]

I also don't know how many schemes but we have over 140 on our books and HMRC did make a claim a couple of years back for over 250. We are also seeing new schemes crop up or even old schemes that we did not know about.

To a degree HMRC has a "catch all" in the Follower Notice legislation. Where a case is heard and its facts etc are sufficiently similar to other situations, then HMRC can issue a FN and require adjustments to tax calculations.

These have been used a few times, they appear to have also been abused and i'm sure we'll see a lot more challenges.

Now that the loan charge is largely neutered we will also see the re-emergence of challenges on validity of enquiry and assessment - we are already doing this - and that will be a major feature moving forwards.

I don't disagree that the existence of the loan charge was a major factor in individual decisions to settle or fight, but my point was that there is no evidence that a Court would accept which pointed to or proved a direct link. As such, attempting to argue that in a Court would be a long uphill battle and one that for the moment at least would have such a low chance of success that its reasonableness would have to be questioned.

[DealorNoDeal]

To a degree HMRC has a "catch all" in the Follower Notice legislation. Where a case is heard and its facts etc are sufficiently similar to other situations, then HMRC can issue a FN and require adjustments to tax calculations.

These have been used a few times, they appear to have also been abused and i'm sure we'll see a lot more challenges.

I was a bit surprised they didn't use the Boyle case to issue FNs to other contractor loan schemes. Maybe they weren't playing as fast and loose with the legislation back then.