AM Limited COP8 HMRC Investigation Letter..

[centurian]

Because that would still be a sham arrangement. Institutions loan money to make money and the higher the risk the higher the reward - look at Wonga and co. with their 1000%+ interest. An arrangement whereby the instigator of the loan got no financial reward but the recipient of the loan benefited from reduced taxes would still be viewed as a tax avoidance scheme.

WSS - judges are not stupid and they have a very wide margin to ignore any action which they believe is a sham. It could even be counter productive to demand £1 per month - as it proves they have no intention of ever receiving any substantial amount of the "loan".

If they were to start demanding more substantive payments - that might be different.

That's what I have always seen as a paradox of these loan schemes - the only way you can prove it's a loan - is to start making serious attempts to pay it back.

[lightball]

AML Limited v HMRC investigation

HMRC cannot challenge AML loan as if they do they will have to challenge all other loans that are setup in the same way including major credit cards and companies loans. If they do, lots of businesses will be forced to bankrupt as a result of it and the move will be seen as counterproductive to this fragile economy.

[cojak]

HMRC cannot challenge AML loan as if they do they will have to challenge all other loans that are setup in the same way including major credit cards and companies loans. If they do, lots of businesses will be forced to bankrupt as a result of it and the move will be seen as counterproductive to this fragile economy.

Not at all the same thing, because they are real loans. I use my credit card for a large one-off payment and either pay it ALL back the following month or pay it back plus 25%APR in monthly instalments.

[malvolio]

HMRC cannot challenge AML loan as if they do they will have to challenge all other loans that are setup in the same way including major credit cards and companies loans. If they do, lots of businesses will be forced to bankrupt as a result of it and the move will be seen as counterproductive to this fragile economy.

Nonsense.

[LisaContractorUmbrella]

HMRC cannot challenge AML loan as if they do they will have to challenge all other loans that are setup in the same way including major credit cards and companies loans. If they do, lots of businesses will be forced to bankrupt as a result of it and the move will be seen as counterproductive to this fragile economy.

If you get out a loan from, say, Wonga you will enter into a legally binding agreement whereby they will agree to loan you a sum of money, say, £500; you will agree to pay it back, with interest, within a given timeframe, say, 30 days. So, day 1 they will transfer £500 into your account and 30 days later you will pay them back perhaps £550.00. They took a risk in giving you the money in the first place as you will not have had to put up security to get the money and their reward is the £50 interest that they charged you on the deal.

On the other hand, most contractor loan schemes work in this way - you secure the contract via an agency or end client and then sign up with AML. You work for clientco and a rate of £200 per day; at the end of the week clientco are billed £1000.00. The money, that you have earned using your skills, is then paid to AML who, through accounting jiggery pokkery, lend you this money less their, probably rather substantial cut.

In scenario one you agree to borrow money, which is the asset of the loan company, for a period of time at an agreed rate of interest
In scenario two you arrange for your own hard earned money to be given to a company which then processes it through a Trust which then loans it back to you with no expectation of it being repaid within an agreed period of time and no interest chargeable.

There are significant differences between the two processes and genuine loan companies will certainly not be affected by HMRC current actions

[stek]

HMRC cannot challenge AML loan as if they do they will have to challenge all other loans that are setup in the same way including major credit cards and companies loans. If they do, lots of businesses will be forced to bankrupt as a result of it and the move will be seen as counterproductive to this fragile economy.

Lol!!

[lightball]

I defaulted on a huge credit cards bill and on a few large loans. I spend all that money for a fun and yet I don't have to pay a penny back. Would this constitute a tax invasion especially when I don't have to pay anything back?

[handyandy]

I defaulted on a huge credit cards bill and on a few large loans. I spend all that money for a fun and yet I don't have to pay a penny back. Would this constitute a tax invasion especially when I don't have to pay anything back?

I think that is called fraud. I love the idea of a tax invasion!

[jrock]

Any news from AML

Hi all, it's all gone abit quiet on here. Has anyone received any AML updates on the proposed APNs ?

I was under the impression we should all receive an update early September.

Just read this article that states hmrc are proposing to send APNs this weekend
'Thousands' of pay-up tax notices to hit doormats - 12 Sep 2014 - Accountancy Age

[jrock]

APN FAQ doc

Read this HMRC APN FAQ
http://www.hmrc.gov.uk/compliance/cc-fs24.pdf

Interesting paragraph in page 5 (see extract below)

---
What will happen if you pay the accelerated payment notice and a court or tribunal later rule that the scheme does produce a
tax advantage
If a tribunal or court decides that the scheme does produce the tax advantage, we would normally repay the amount you have paid under the accelerated payment notice, along with any interest that is due
to you.
However, if we appeal against the decision to a higher court or tribunal, we may, in certain cases, also ask for their permission not to repay the amount to you. We would only do this if we believed that there was a risk that, if we were successful with our appeal, you would not then pay the amount you owe
---

So basically if you pay up you eventually win the case HMRC may not pay you back.