IQ Consultants, Felicitas Solutions, ECS Trustees - loan repayment demands

[Culps67]

So if they are legally binding....

1. How many folk knew it was a loan scheme when they signed up ?

I didn't.

2. How many people were told they would have to pay the back ?

I wasn't told.

3. How many folk would have signed up if they knew this ?

Not one person would sign up for this.

This is no different to PPI mis-selling. The loan part was never mentioned to me and when I read the agreement recently the loan bit was on page 22 of 24.

This same umbrella company is still trading and texted me a few times asking me to re-join for a loyalty bonus !

[webberg]

So if they are legally binding.... I think I've not suggested that? What I said was that the effectiveness of the tax position as calimed, will not be known for a while and even if a Judge says it did not produce the result required, that does not make it "illegal".

1. How many folk knew it was a loan scheme when they signed up ?

I didn't. I'm not trying to be cruel, but you signed a loan agreement.

2. How many people were told they would have to pay the back ?

I wasn't told. You signed an agreement that has a repayment clause. If you borrow money for a house, car, personal loan etc, the lender or their agent is required by law to discuss with you how and when you will repay it. These were not however regulated loans. I very much suspect you were told something along the lines of "yes, it's a loan but don't worry because we'll never ask for it back". If you have that in writing - it's very valuable.

3. How many folk would have signed up if they knew this ?

Not one person would sign up for this. The evidence disagrees with you. We have 150+ schemes on our books, probably 95% of them have loans at their heart. HMRC estimate 50,000 people still have issues here. I would say that is low.

This is no different to PPI mis-selling. The loan part was never mentioned to me and when I read the agreement recently the loan bit was on page 22 of 24. It's totally different to PPI. The people who sold you PPI were operating in a regulated market and their error was in not telling you that you were paying for an insurance that was unlikely ever to be useful to you. Their error was in breaching the regulations. This market is NOT regulated. The promoter offered you a chance to save tax/stay outside IR35/do the same as your mates and the degree to which you opened the bonnet and poked around int he engine was entirely up to you. You could not rely upon the Government here or the IOM to apply minimum standards to the arrangement.

This same umbrella company is still trading and texted me a few times asking me to re-join for a loyalty bonus ! Really? I'd be interested in knowing who that umbrella is if you want to PM me.

I apologise if you think the above response is callous or inappropriate. It is not my intention to add to the worry and concern.

It is however CRUCIAL that you look at the situation in as detached a manner as you can and leave the emotional side out of the equation.

Only then can you focus on the issues that matter.

As I've said before, if you want to call us and get a clear picture, you can. It's free and no obligation.

[Scrogbank]

We've been sort of mentioned (if mis-spelt) so I'll answer.

Tax arrangements are rarely "illegal" if by that you mean that some action not permitted by law has been used to make them work.

Tax arrangements are therefore defined (loosely) by words such as effective, ineffective, abusive, evasive.

Nobody really knows where a scheme sits in the above range until a Judge says so.

Promoters will claim that schemes are "effective" and simultaneously HMRC will say that they are "abusive".

They will therefore hold different views until the Judge decides.

That is where there schemes are right now. Nobody knows if the claimed tax effect is real or not.

The tax status of the scheme DOES NOT detract from the legal effect of the agreements you signed.

Mixing the tax situation and that of the various obligations you committed to, will just confuse you. THEY ARE NOT RELATED.

There are many ways in which the obligation you signed up for (to repay the loan etc) may be invalid. Many of these reasons don't need to reference the tax scenario. Those that do will require your adviser to be aware of both sides of this equation.

Equally no amount of finger pointing and making comments as to the personal or corporate integrity of people or firms connected to this shambles is actually going to help.

You need to be dispassionate about this.

You should be asking, not if the scheme was legal or otherwise, because as mentioned you will now know for perhaps a year or more, but rather do the documents you signed have flaws or were you under duress or coercion when you signed them. If the answer to the second part of that question is "no", then focus on the law around the contracts signed. Then think about the money flow at the time.

Many thanks for that. So I guess it will come down to arguing whether or not we signed an enforceable loan agreement!
Just for interest if anyone, like me, has part of the claim based on loans from Sanzar Partnership and or Sanzar Solutions, the MD of Sanzar posted on this site back around the start of the Solutions scheme with words to the effect that Loan Agreements were not used! Can anyone find that original post as it could be useful.

[webberg]

Many thanks for that. So I guess it will come down to arguing whether or not we signed an enforceable loan agreement!
Just for interest if anyone, like me, has part of the claim based on loans from Sanzar Partnership and or Sanzar Solutions, the MD of Sanzar posted on this site back around the start of the Solutions scheme with words to the effect that Loan Agreements were not used! Can anyone find that original post as it could be useful.

It's certainly true that the Sanzar arrangement claimed that the "loan" was repaid at the end fo every tax year and as such there should be nothing outstanding.

Couple of caveats to that.

First, I suspect that HMRC will find the above hard to swallow and will challenge whether the "repayment" meets the standards required in tax law. After all if the repayment was real, then the loan charge cannot apply.

(Read the loan charge rules here because they define "repayment" in narrow - arguably too narrow - terms).

Second, do you have any evidence of repayment? Any debits/credits via your bank account? Any documents other than an email saying all repaid?

[webberg]

An abusive legal agreement IMO.

I'm not sure if you're being deliberately provocative here?

Use of the tax legislation to produce a particular result can be said by HMRC and Tribunal to be "abusive".

If so, then this is just a precursor to saying that the arrangements do not achieve the tax result promised and instead some other tax result applies.

The word "abusive" is not really used in tax legislation but is bandied around by HMRC in particular to try to create a prejudicial mind set in the eyes of Joe Public.

A legal agreement has to meet the terms of the law it is documenting. It can therefore do that - and be legally binding - or fail to do that and be illegal. Either way, it cannot be "abusive".

Do not conflate the lexicon of tax arrangements/avoidance with the vocabulary of legislation.

The first is more concerned with using words in often pejorative or misleading ways in order to create an impression or prejudice.

The second is usually closely defined in the context of the law being documented and allows for a less generous interpretation.

All this to say that your one liner is an oxymoron.

[Micky20]

I apologise if you think the above response is callous or inappropriate. It is not my intention to add to the worry and concern.

It is however CRUCIAL that you look at the situation in as detached a manner as you can and leave the emotional side out of the equation.

Only then can you focus on the issues that matter.

As I've said before, if you want to call us and get a clear picture, you can. It's free and no obligation.

I appreciate your points but the loan was paid off before any money was recieved.

[pt101]

Email from Sanzar explaining solution

Many thanks for that. So I guess it will come down to arguing whether or not we signed an enforceable loan agreement!
Just for interest if anyone, like me, has part of the claim based on loans from Sanzar Partnership and or Sanzar Solutions, the MD of Sanzar posted on this site back around the start of the Solutions scheme with words to the effect that Loan Agreements were not used! Can anyone find that original post as it could be useful.

They never mentioned the word ‘loan’ to me. I still have emails from Sanzar explaining how ‘the solution’ worked. Copy and pasted below.

**We at Sanzar can take you on as an employee and your agency or client is invoiced as your timesheets are submitted. Once your agency has paid for your services, Sanzar immediately pay you your 85% having deducted all tax and National Insurance.

The 85% that you receive consists of two payments. Both of these payments are received in conjunction with each other. One of these payments is your PAYE wage. This is based upon the UK national minimum wage of £5.76 per hour and you pay full Tax and NI on this wage, thereby fulfilling your legal obligations upon this wage.

The Second portion of your 85% is received by yourself via an off shore trust in the form of a payment on account. These payments on account are resolved at the end of the tax year through execution of documentation that ensures they are non taxable.

[webberg]

These payments on account are resolved at the end of the tax year through execution of documentation that ensures they are non taxable.

What did you think this was?

Did you see that documentation?

We have that document.

I can make an argument that it was not a loan.

I suspect HMRC can make an argument that it was, (should they ever bother to investigate it properly).

To the best of our knowledge, the loan repayment letters so far have mentioned Sanzar only once in our client population despite having several hundred clients who used it. I suspect that may be an error caused by sloppy admin.

[Scrogbank]

It's certainly true that the Sanzar arrangement claimed that the "loan" was repaid at the end fo every tax year and as such there should be nothing outstanding.

Couple of caveats to that.

First, I suspect that HMRC will find the above hard to swallow and will challenge whether the "repayment" meets the standards required in tax law. After all if the repayment was real, then the loan charge cannot apply.

(Read the loan charge rules here because they define "repayment" in narrow - arguably too narrow - terms).

Second, do you have any evidence of repayment? Any debits/credits via your bank account? Any documents other than an email saying all repaid?

Still digging re Sanzar Solutions but for Sanzar Partnership I do have a letter saying all loas were repaid

[Scrogbank]

What did you think this was?

Did you see that documentation?

We have that document.

I can make an argument that it was not a loan.

I suspect HMRC can make an argument that it was, (should they ever bother to investigate it properly).

To the best of our knowledge, the loan repayment letters so far have mentioned Sanzar only once in our client population despite having several hundred clients who used it. I suspect that may be an error caused by sloppy admin.

Or maybe sloppy reporting by us individuals, my claim is for both Sanzar and Garraway periods