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

[WJK]

Cheers Happychat.

[looperevil]

Are these demands being sent ny HMRC the loan charge? Were they/you not given the chance to settle?

[WJK]

According to 1 of the documents sent by HMRC it states:
"We believe that you received loans related to your employment. We believe that this amount was outstanding as of the 5th Apr 2019"
I have never been contacted by them before until now.

[GregRickshaw]

Don't confuse HMRC's demands with the demands for the loans to be paid back.

It gets way too confusing as HMRC have deemed them not loans. Yet the company chasing the loans want their money back... and never the twain shall meet.

Be sure to get help with the correct one of the demands or both as they are very different.

[MrsPatricia]

I’ve gone back through all my paperwork and I did declare everything back in 2019 when I settled. The payments came from a different name on my statements, not Birling, which is where I think the issue has come from. I’ve sent off all evidence again. Don’t expect to hear back anytime soon if last time is to go by.
I was on one of these schemes for less than 4 months in total back in 16/17. How all these years later it is still biting me in the arse I don’t know.

According to 1 of the documents sent by HMRC it states:
"We believe that you received loans related to your employment. We believe that this amount was outstanding as of the 5th Apr 2019"
I have never been contacted by them before until now.

The advice I had from HMRC was to email them using the email address on the top right hand of the letter and use the below phrases:

Formally appeal as costs are an estimate

Require extension to provide evidence

I understand email policy and risk of communicating via email

[creativity]

According to 1 of the documents sent by HMRC it states:
"We believe that you received loans related to your employment. We believe that this amount was outstanding as of the 5th Apr 2019"
I have never been contacted by them before until now.

When did you receive the letter? Its important as HMRC are out of time if the letter is dated after 5th April 2023 (and they haven't opened an investigation already).
Did you include the loan in your 2019 self assessment?

[WJK]

The letter is dated 5th April 2023. @ end of 2014 I took early retirement not worked since so I have not submitted any self assessments. In my naivety I believed all had been done by the administrators associated with the contract.

[peasant2023]

Don't confuse HMRC's demands with the demands for the loans to be paid back.

It gets way too confusing as HMRC have deemed them not loans. Yet the company chasing the loans want their money back... and never the twain shall meet.

Correct me where I am mistaken please:

My understanding is that:
1. HMRC have deemed they are loans
2. But loans which will never be repaid
3. The loan must be compensation in lieu of income


1. HMRC have deemed they are loans (and must be - if they're not loans, they're income - still subject to taxation, but as equally beyond recall of a promoter or third-party as the contractors transferred salary is. Effectively, the offshore argument used to make contractors liable for the Employer segment of the tax applies, except the other way around. To overturn this, requires a promoter to turn up in a British court and have the court accept the validity of their scheme)

2. But loans which will never be repaid (they musn't be repaid or rationalised via asset transfer - otherwise the legal basis might be undermined and the penalty regime referred to in "Spotlight 50" might be invalidated)

3. The loan must be compensation in lieu of income - that is the justification for making it subject to income tax (retrospectively and post 15 Nov 2017)

That can stand up on it's own - it already does as of 16 Nov 2017.*

According to "Spotlight 50", where this occurred on or after 16 Nov 2017 - anyone who designed, managed, marketed, enabled participation or financially enabled the scheme is subject to the penalty regime, with Accountants explicitly singled out (and most likely guilty of "something" - if they have failed to comply post 15 Nov 2017 or with the "Standards of behaviours set out in the Professional Conduct in Relation to Taxation code" ).

So far, HMRC have been totally re-active.
That's why Spotlight 50 had to explicitly clarify HMRC's opinion - that the transfer of assets to rationalise a loan and thus escape taxation - can not work.
Had they been pro-active - that would have been invalidated when the Loan Charge received Royal Assent - instead it had to wait until Mar 2019 for a reaction - that legally, it was always invalid (including retrospectively)

If the loan or any portion of it is repaid - legally, it has now become something else.
What that is - doesn't seem to be clear to anyone...

But presumably UKGov will have to either legislate against Loan Repayment
or HMRC will need to defeat every single scheme. (HMRC have now resorted to Stop Notices - widely criticised by Tax Specialists as redundant, with claims that HMRC do not understand the Tax Avoidance market)

If UKGov fail to legislate against Loan Repayment in the case of DR schemes, the next evolution would just be for the Promoters to just deduct a loan repayment from each disbursement going forward, and now they're off the hook again - and keeping more money than ever before.
And they can attempt to invalidate the penalty regime, by asking for just .01% of any past loan to be repaid in agreement for a loan write off
(This will end up in a never ending legislative nightmare for UKGov)

UKGov will also need to legislate against selling the loan on to a third party, seeking repayment - where a disguised remuneration settlement has been reached. (regardless of the clear violation of the rules around trust/transfers etc.)
Legally, any third party seeking repayment of the loan used in a DR scheme must be seen as an enabler of a tax avoidance scheme.
Otherwise, the promoters are handed carte blanche to continue all extant schemes and start new ones - even post-Stop Notice and penalty.

Pragmatically speaking - this thing will have to reach a conclusion where settlement with HMRC, is the end of the Promoters ability to funnel wealth out of the UK.

Otherwise, the schemes will continue to proliferate and HMRC will eventually be forced to hand it over to the Serious Fraud Office - that might jeopardize their ability to claim some or all of the tax (Employer's portion), where the SFO determine that a crime has been committed ("missold" might then switch to "defrauded" - which might already be the case anyway post 15 Nov 2017).




* If these criteria are not met - then UKGov probably have a serous legal crisis on their hands.
e.g. Hypothetically, if a public official received a loan, and any portion of that loan is later written off - a risky legal precedent has been established where it might then need to be retrospectively taxed as income and might have serious ramifications for the Bribery Act 2010.
A million prospective scenarios like this would seem to arise.

[GregRickshaw]

HMRC have deemed them as taxable income and not loans though.

The confusion I am referring to is this is a post about the companies recalling the loans, not the DR/Loan scheme itself.

The last few posts have started to repeat what is on the specialised posts.

Everything else you say though is common sense as someone pointed out common sense rarely prevails in court.

[peasant2023]

HMRC have deemed them as taxable income and not loans though.

Seems like an absolute legal quagmire in that case...and probably totally unenforcable - do you know if any loan recall has ever been enforced?