Historical EBT Loans Current View on Legal Position

[ukcommando]

I thought I might as well crystallise my own thoughts, as there has not been much input to my original query. This is just my personal view of the current status on EBT loans and ongoing determinations being issued by HMRC, and not in any way a formal legal opinion.

I am inclined to not see any value in spending further money on professional advice unless there’s an argument to be had, especially as the evidence aspect (we had the loans) is pretty clear cut. I suspect the value of expensive advice on this particular subject is likely limited to engaging with HMRC on behalf of those in distress to help mitigate the impact, or to engage in the ongoing campaigning for relief. Happy to be proven wrong.

I've jotted down four headings that I think are a good way to consider the issue. I welcome any comments/input that help form a more complete picture.

1. Evidence

Straight forward. EBT loans were recorded on the recipients Tax Returns, so there’s no question that they are on record (unless folk submitted inaccurate returns which is a different matter)

1. Legal Status

The Rangers case and the subsequent Hoey case appear to establish that the loans are regarded as income and are taxable if HMRC opened an enquiry or issued a determination within the permitted time limits. Are there any viable challenges to this (I don't know of any)?

1. Applicability

This is the question as to whether any individual cases/schemes have circumstances/factors, or legal arguments, that place them outside the normal legal status mentioned above. This was the main reason for my original query. I think it unlikely, but thought it worth asking for input from others.

1. Relief/Mitigation

This relates to ongoing campaigning for the authorities to consider the extreme stress placed on former scheme members. Examples have been quoted of folk on more modest incomes whose lives are destroyed by HMRC demands, though I suspect there’s a much higher proportion of these in the body of people impacted by the Loan Charge which is hitting the post 2010 period when non-EBT loan schemes were being promoted to a wide range of employers. There are, of course, many in the contractor world hit by multiple determinations who have faced losing all their assets and been pushed to the brink.

My view is that I fully understand that those who have nothing more to lose, may as well fight to the end with whatever support they have get from campaign groups. But it seems that HMRC are now pressing to close off and finalise all the open EBT queries. I doubt that any relief provided by campaigning will come in time, and even if it ever does, I suspect it will be likely be of a form that delays or spreads out payment obligations over the long term so that the Government can claim no one is losing their home. HMRC has already forced lots of settlements from folk who would likely feel aggrieved if others are subsequently let off the hook altogether.

[ukcommando]

So is the general feeling/ advice from professionals is to settle pre-2010 open years?

I've summarised my own thoughts in a separate update to my original post, but I think you're right, and there are no viable options left, save paying for expensive professional advice that will likely make little difference. I am a bit hacked off at recently receiving a determination after an eight year silence, because there was an open query and, apparently, HMRC have absolutely no time limits on resolving open queries, which seems crazy. But it looks like I have to grin and bear it...