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

[Iliketax]

I only know about tax law and so am reluctant to get involved in this. But some of the statements about the "loans" not being "loans" because of tax law is wrong. They might not be loans for many other reasons but tax is not one of those reasons.

The Supreme Court's decision actually supports the tribunal's view that the loans were real loans and not a sham.

As evidence of this:

2. ... This was because the FTT considered the steps in the scheme were not shams and that the employees had received only a loan of the moneys which the employing companies paid to the trusts.

27. ... In some cases, such as the one to which the majority [of the FTT] expressly referred, the player’s wife cooperated with RFC, the trustee and the player to assign the receivables of the sub-trust to the player and thus extinguish the loan.

32. The majority of the FTT found that the trusts and the loans were valid and were not shams. ... HMRC does not challenge those findings in its defence of this appeal.

61. ... Every time a footballer wanted to use the money provided to his sub-trust, he was given a loan by the sub-trust.

[piebaps]

From Gladst*ne's website.

"Our competitive pricing models, are tailored to the needs of each of our individual clients, based on their needs and expectations.

Based on the referral of low-value, bulk debt (low value being under £700) the typical charge per case applied, is between £25 - £70 plus VAT, for cases allocated to the Small Claims Track (excluding disbursements).

The work carried out for this fee includes (dependant on how a specific case proceeds);
•Obtaining instructions. In particular, understanding our client’s business and debt portfolio, in order to meet expectations.
•Undertaking appropriate searches
•Sending Letters Before Claim
•Sending of SMS messages to debtors
•Negotiating Settlement, including obtaining payments
•Dealing with Pre-Action Protocol correspondence
•Issuing legal proceedings
•Entering judgment
•All preparatory work required for Court Hearing
•Taking steps to enforce a judgment based on instructions
•Corresponding with Debtors throughout"

The bad guys here are whoever instructed them and is paying them.

[jbryce]

Some numbers

Say, 500 people receive these letters with an average exposure of 100K That's c 50 million.
Not bad.

On the flip side, that's also a lot of people to contribute to fighting this through the courts.

It's all rather unfair.

[webberg]

Everybody is entitled to their opinion of me and what I do and is free to share it here and elsewhere.

I'll say a few things in defence of the points raised above (and hope they don't come across as high and mighty").

I'm a tax adviser, not a lawyer. Consequently I'm never going to be absolutely certain about some of the legal aspects of the loans and the attached rights and obligations, unless and until I have had those views checked by a lawyer who knows enough about the situation to give me a view that has some balance and some depth.

I don't have that as yet.

If therefore it sounds as though I don't know the answer as to whether the loan is enforceable or not, it's because I don't.

I could happily say to you all "I absolutely, definitely guarantee that the demands you have can be safely thrown away and forgotten". Except it wouldn't be true. I could charge you all several hundred pounds for just joining. By the time you discovered I did not have a guaranteed answer I would have spent that money on fast cars.

I chose to instead tell the truth.

We have in the past resisted such demands from another promoter. We are in the process of doing so with another scheme. We have already supplied our clients who used these schemes with a - as my lawyer friend calls it - a strongly worded "I don't think so" - to the solicitors. This we provided free of charge to existing clients.

Do I think that will be the end of the matter? I hope so, but I cannot guarantee it. If the alleged owners of the alleged loan come back for a second bite, we will no doubt defend again.

Do I think that the loan repayment demands can be resisted? Yes. Am I going to detail that route here? No. Am I going to use our detailed research and knowledge to help our current clients? Yes. Is that knowledge available to non clients? Yes, but you have to become a client.

As to calling anybody here a liar, I think not. I have been here five years and have never done that, never will do it and have no reason to.

Do I think many people, for a variety of reasons, failed to understand completely what they were signing up for? Yes absolutely. Our files are full of these tales.

Do I blame or judge those clients? Of course not. My role is to extract them from the consequences of those actions taken unwittingly or knowingly (makes no difference) at the lowest possible financial and emotional cost.

You may consider that I am falling short of that mission - your prerogative.

I have not however accused any individual here or elsewhere of being a liar. Again you can see it as that if you wish, but I am comfortable with my responses.

The first step to dealing with these situations is to understand, coldly and calmly, what you have in terms of good evidence and bad evidence. From that you can apply the law and the terms of the documents to the facts of the arrangement and arrive at an objective assessment as to the best route forward.

What you cannot do is base a defence around "fairness", use tax law to define contract law terms and expressions, assume that because you see yourself as being a victim that a judge will, listen to the unsupported hearsay of anonymous posters on this or any other forum.

The best defence against an unwarranted claim is evidence and facts leading to a position that removes the claim.

If you think I've been harsh in saying so, again I think not. The position I have outlined is a tried and tested route to opening the eyes of those we help and try to help. Until you can see past the outrage and fury, justifiable as it may be, you cannot mount a coherent defence.

It does not matter that the solicitor has an unsavoury reputation. They're still solicitors who use the law and you therefore have to match them. IN Court a Judge will not care a jot if Messrs, Sue, Grabbit and Runne are "ambulance chasers" (not my phrase). He/she will care only that the law has been applied.

Sorry to go on, but I suspect that the 10,000 hours plus I have put into this area, qualifies me to give unbiased advice and opinion and I'm going to continue to do so.

[Wazza1882]

From Gladst*ne's website.

"Our competitive pricing models, are tailored to the needs of each of our individual clients, based on their needs and expectations.

Based on the referral of low-value, bulk debt (low value being under £700) the typical charge per case applied, is between £25 - £70 plus VAT, for cases allocated to the Small Claims Track (excluding disbursements).

The work carried out for this fee includes (dependant on how a specific case proceeds);
•Obtaining instructions. In particular, understanding our client’s business and debt portfolio, in order to meet expectations.
•Undertaking appropriate searches
•Sending Letters Before Claim
•Sending of SMS messages to debtors
•Negotiating Settlement, including obtaining payments
•Dealing with Pre-Action Protocol correspondence
•Issuing legal proceedings
•Entering judgment
•All preparatory work required for Court Hearing
•Taking steps to enforce a judgment based on instructions
•Corresponding with Debtors throughout"

The bad guys here are whoever instructed them and is paying them.

I wonder how it works for IOM and Maltese jurisdictions? Gladstones can't do anything in those countries. That's where the hearing would be heard as its under those laws, I believe.

[78paul]

Not only this, but I don't know if people realise. The actual text in the letter, if you read it fully, is not asking for loans to be repayed. Not at all. What it's asking for (for one of my apparent 4 loans with them) is payment of interest accrued from 2015 totalling a few grand. And then interest will also be due every April, with the next due April 2020. But, they do add that as a one time offer, they can cancel all loans and interest for a one off payment of £xk.

They carry on with a threat and say that if they don't receive any payment then they will use the 30 day notice to call in the loans.

So that's the pressure tactic all for a few quid here and there.

£1-£10k Interest or £5-£20k settlement payments x 400 of the 4-5k people that are affected by this means a nice tidy sum of close to £1m.

My letter read exactly the same... Interest amounts only on the last "loan", although I was never informed of any interest rates..
Or, I can opt to pay a one off single payment for a larger amount and all interest and all loans will be wiped off..
And how will they guarantee this?
Will they send you written confirmation that you will never be hassled again?

Everyone, we need to stay focussed and try not to let emotions run or risk losing people from this thread..
There are lots of good and positive things going on here and I think we should stick together and join forces for anything legal if it comes to it.

[Wazza1882]

Everybody is entitled to their opinion of me and what I do and is free to share it here and elsewhere.

I'll say a few things in defence of the points raised above (and hope they don't come across as high and mighty").

I'm a tax adviser, not a lawyer. Consequently I'm never going to be absolutely certain about some of the legal aspects of the loans and the attached rights and obligations, unless and until I have had those views checked by a lawyer who knows enough about the situation to give me a view that has some balance and some depth.

I don't have that as yet.

If therefore it sounds as though I don't know the answer as to whether the loan is enforceable or not, it's because I don't.

I could happily say to you all "I absolutely, definitely guarantee that the demands you have can be safely thrown away and forgotten". Except it wouldn't be true. I could charge you all several hundred pounds for just joining. By the time you discovered I did not have a guaranteed answer I would have spent that money on fast cars.

I chose to instead tell the truth.

We have in the past resisted such demands from another promoter. We are in the process of doing so with another scheme. We have already supplied our clients who used these schemes with a - as my lawyer friend calls it - a strongly worded "I don't think so" - to the solicitors. This we provided free of charge to existing clients.

Do I think that will be the end of the matter? I hope so, but I cannot guarantee it. If the alleged owners of the alleged loan come back for a second bite, we will no doubt defend again.

Do I think that the loan repayment demands can be resisted? Yes. Am I going to detail that route here? No. Am I going to use our detailed research and knowledge to help our current clients? Yes. Is that knowledge available to non clients? Yes, but you have to become a client.

As to calling anybody here a liar, I think not. I have been here five years and have never done that, never will do it and have no reason to.

Do I think many people, for a variety of reasons, failed to understand completely what they were signing up for? Yes absolutely. Our files are full of these tales.

Do I blame or judge those clients? Of course not. My role is to extract them from the consequences of those actions taken unwittingly or knowingly (makes no difference) at the lowest possible financial and emotional cost.

You may consider that I am falling short of that mission - your prerogative.

I have not however accused any individual here or elsewhere of being a liar. Again you can see it as that if you wish, but I am comfortable with my responses.

The first step to dealing with these situations is to understand, coldly and calmly, what you have in terms of good evidence and bad evidence. From that you can apply the law and the terms of the documents to the facts of the arrangement and arrive at an objective assessment as to the best route forward.

What you cannot do is base a defence around "fairness", use tax law to define contract law terms and expressions, assume that because you see yourself as being a victim that a judge will, listen to the unsupported hearsay of anonymous posters on this or any other forum.

The best defence against an unwarranted claim is evidence and facts leading to a position that removes the claim.

If you think I've been harsh in saying so, again I think not. The position I have outlined is a tried and tested route to opening the eyes of those we help and try to help. Until you can see past the outrage and fury, justifiable as it may be, you cannot mount a coherent defence.

It does not matter that the solicitor has an unsavoury reputation. They're still solicitors who use the law and you therefore have to match them. IN Court a Judge will not care a jot if Messrs, Sue, Grabbit and Runne are "ambulance chasers" (not my phrase). He/she will care only that the law has been applied.

Sorry to go on, but I suspect that the 10,000 hours plus I have put into this area, qualifies me to give unbiased advice and opinion and I'm going to continue to do so.

Thank you for this response and I fully agree with your points.

I'm not sure how long it will take for you to understand from your lawyers what the situation is here, but when you do and if I need to sign up and pay, count me in.

I do value what you are saying, but, in order to fight a good battle, morale needs to be high. I am not saying tell us lies or what we want to hear, but some motivational words would be great. Equally, you don't have to do that at all if you don't want. Your prerogative.

Good luck with your investigations.

[NickLeeson2]

Is this all part of HMRC's plan to get you to pay the loan charge or tax?

If Gladstones are sending a generic letter requesting repayment of the loan and you respond in writing that it is not a loan but a wage structure. Wouldn't HMRC then say you owe X amount in tax on this payment?

Then there is the unknowns of whether there is a requirement to repay the loan. What are the terms and conditions, what happens to the repaid money. Surely they can't just sit on it when there was a payment from a client which was paid on the understanding that it was going to an employee.

[Culps67]

webberg, Fair enough with what you say and its your choice whether you contribute thousands of hours giving advice. No-one is forcing you to do that. I'm not asking for free advice either.

I'd stated earlier that I was not told about any loan when I signed up.

You responded with.... "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"."

Correct me if I'm wrong here but that suggests I wasn't telling the truth. That's fine. It aint end of the world but I'm not in same boat as most people in the fact the contract was very short and its a couple of thousand pounds. Not life changing. But there are a lot of people out there who are affected to a much greater level and I'm sure wouldn't appreciate being lectured on the circumstances of what they signed up for. They all definitely knew they were signing up for a loan scheme ? All of them were told ? Judging from my experience that seems not to be the case.

In my 24 page contract nothing is mentioned about any loans. Until you get to page 22 it mentions paying it back on tenth anniversary.

[Wazza1882]

Is this all part of HMRC's plan to get you to pay the loan charge or tax?

If Gladstones are sending a generic letter requesting repayment of the loan and you respond in writing that it is not a loan but a wage structure. Wouldn't HMRC then say you owe X amount in tax on this payment?

Then there is the unknowns of whether there is a requirement to repay the loan. What are the terms and conditions, what happens to the repaid money. Surely they can't just sit on it when there was a payment from a client which was paid on the understanding that it was going to an employee.

That was my question, but having thought about it, the payment was made from the Agency to IQ Consultants (in my case). They are now dissolved. The trust have nothing to do with it apart from, they "lent" us the money.