Things about to get very serious and much more real? / Felicitas Letters

[GotScrewed]

Love how they add the comment "You are not the person they won the court case against" I suspect I may already know this. Very thoughtful of them.

Oh and my final deadline is now April after the last final one was March and before that....

Spotted that too, to cover their ass from last times cockup.....

[DealorNoDeal]

I bet they don't like this forum.

[Fred Bloggs]

I bet they don't like this forum.

That thought makes me happy.

[cojak]

I bet they don't like this forum.

I couldn't possibly comment...

[WJK]

I find it unbelievable that a judge in the County Court at Newcastle's Civil and Family Courts and Tribunals Centre is au fait with the technicalities of tax avoidance schemes. What an unbelievable coincidence!

The other thing I don't get is the fact they referred to a particular scheme that I never used. Each scheme had its own T&C's, supporting artefacts etc so why would one alleged win in court make a difference to someone who's never used the scheme in question?

If as "they" say in their email this case was and is a reflection of ours then surely their so called win would have had the HMRC all over it like a rash!

[DealorNoDeal]

If as "they" say in their email this case was and is a reflection of ours then surely their so called win would have had the HMRC all over it like a rash!

Why would HMRC care? The fact that the "loans" might be legally enforceable wouldn't matter one iota to them. After all, they already treat them as loans for the purposes of IHT, even though primarily they class them as disguised remuneration and liable to income tax.

[Fred Bloggs]

Why would HMRC care? The fact that the "loans" might be legally enforceable wouldn't matter one iota to them. After all, they already treat them as loans for the purposes of IHT, even though primarily they class them as disguised remuneration and liable to income tax.

Exactly. Hector couldn't care less.

[MrO666]

If more and more scheme providers start trying this angle, I do think it's a matter of time before it would get picked up by HMRC (probably via the main stream press).

They are no doubt openly ignoring it for now, but if the issue became so large that it started to publicly bring into question the validity of HMRC claiming this is income and NOT a bona-fide loan, then I suspect they would have something to say.

Ultimately, if this issue gets larger and larger, it will only be a matter of time in my opinion before someone, who may be potentially on the hook for very serious sums to both HMRC and the provider is going to have to go to court. HMRC are not going to want a judge to verify that these were loans which must be repaid, as that would be at total odds with HMRC's stance, and open a whole can of worms that HMRC don't need. I appreciate that something can "technically" be income and a loan, however HMRC and UK Gov are very quick these days to make reference to the "spirit of the law", and you'd be hard pressed to find anyone (a judge included) who would try and argue that taxing a loan that has to be repaid is in any way fair or just. Even more so when the claim that it's a genuine loan is exceptionally weak in the first place.

All just my opinion of course.

[DealorNoDeal]

If more and more scheme providers start trying this angle, I do think it's a matter of time before it would get picked up by HMRC (probably via the main stream press).

They are no doubt openly ignoring it for now, but if the issue became so large that it started to publicly bring into question the validity of HMRC claiming this is income and NOT a bona-fide loan, then I suspect they would have something to say.

Ultimately, if this issue gets larger and larger, it will only be a matter of time in my opinion before someone, who may be potentially on the hook for very serious sums to both HMRC and the provider is going to have to go to court. HMRC are not going to want a judge to verify that these were loans which must be repaid, as that would be at total odds with HMRC's stance, and open a whole can of worms that HMRC don't need. I appreciate that something can "technically" be income and a loan, however HMRC and UK Gov are very quick these days to make reference to the "spirit of the law", and you'd be hard pressed to find anyone (a judge included) who would try and argue that taxing a loan that has to be repaid is in any way fair or just. Even more so when the claim that it's a genuine loan is exceptionally weak in the first place.

All just my opinion of course.

I think HMRC's stance is that it was earned income as soon as the employer received the money from the agency/client ie. before it was even passed to the trust to lend out. And I believe this is a view which is supported by the Rangers case.

Of course, if this was the case, then the employer should be liable for PAYE, which is exactly what the current court cases (Hoey, Big Group) are about.

I suspect HMRC are in a bit of a pickle about all this.

[Fred Bloggs]

I think HMRC's stance is that it was earned income as soon as the employer received the money from the agency/client ie. before it was even passed to the trust to lend out. And I believe this is a view which is supported by the Rangers case.

Of course, if this was the case, then the employer should be liable for PAYE, which is exactly what the current court cases (Hoey, Big Group) are about.

I suspect HMRC are in a bit of a pickle about all this.

Myself, I don't think there's really much doubt that the schemes have in the main landed users with a liability that is BOTH earnings and a loan. I know everything to do with this saga is very unclear but that point, I believe, is beyond reasonable doubt. The money was paid in return for work and that triggered income tax (that wasn't paid) as per Rangers. Then, the scheme user gave that money away which was then loaned back to them, albeit sprinkled with pixie dust. I don't think there's much doubt that the money was both income and loans. Obviously, others may choose to not see it that way, other opinions are available etc.