HMRC Enquiry letters on Loans from EBT and other schemes

[akkaraju]

Edge Consulting

I received a letter from HMRC yesterday that I need to cough up more tax for 2008/2009. I spoke to Edge this morning, and they are aware of these letters. They have taken my details and they'll be sending a standard template for appealing. I shall post the details once I receive this template.

Regards,
Suren

[ads1980]

Hi ads1980... thanks for sharing this. It sounds like a professional response, particularly since it is coming from your representative (and reads 'we', rather than 'I'). It sounds like your provider is being a lot more helpful & proactive than what ours are (Talent Resource Management / Raingold at least). Who was your EBT scheme with?

Yes they have been really good so far I think. I was using AM Limited

[KnightRider]

Hi ads1980... thanks for sharing this. It sounds like a professional response, particularly since it is coming from your representative (and reads 'we', rather than 'I'). It sounds like your provider is being a lot more helpful & proactive than what ours are (Talent Resource Management / Raingold at least). Who was your EBT scheme with?

Thanks ads1980. Shevlan, I agree as well. It looks more professional & carry some weight. As we don't get much help from TRM, I would rather get a professional to write the appeal. However due to time limits we may not be able to find one. In that case it would be good if we all can agree to one template.
Please note the "What to do if you disagree" section. Part of it says
"If you appeal you can ask for payment of all or part of the tax in dispute to be postponed until the matter is resolved. If you want to apply for a postponement please tell us the amount of tax that you think you are being overchrged and the reasons why you think you should not have to pay this."

[ads1980]

Thanks ads1980. Shevlan, I agree as well. It looks more professional & carry some weight. As we don't get much help from TRM, I would rather get a professional to write the appeal. However due to time limits we may not be able to find one. In that case it would be good if we all can agree to one template.
Please note the "What to do if you disagree" section. Part of it says
"If you appeal you can ask for payment of all or part of the tax in dispute to be postponed until the matter is resolved. If you want to apply for a postponement please tell us the amount of tax that you think you are being overchrged and the reasons why you think you should not have to pay this."

Well it may be worth contacting them to see if they will act on your behalf? I dont know about the complications behind this though as they obviously wont know any of your past scheme details and I dont know if all the schemes will have be set up in exactly the same way either?

I did ask about the usage of the word postpone as this meant to me that it could still be payable in the future. I was advised that this is the formal approach that they have to take and to apply to postpone all the tax as if the appeal failed then the tax would still be payable and that is why they have used the word "postponed"

[shevlane]

Well it may be worth contacting them to see if they will act on your behalf? I dont know about the complications behind this though as they obviously wont know any of your past scheme details and I dont know if all the schemes will have be set up in exactly the same way either?

ads1980 - it sounds like your guys know what they're doing. I would be interested in giving them a call and seeing if someone on their side would be prepared to help us out too, even though we are from a similar-but-different EBT scheme. Could please PM me the details of the phone# & who best to speak to?

Cheers
- shevlane

[LandRover]

ads1980 - it sounds like your guys know what they're doing. I would be interested in giving them a call and seeing if someone on their side would be prepared to help us out too, even though we are from a similar-but-different EBT scheme. Could please PM me the details of the phone# & who best to speak to?

Cheers
- shevlane

Providers imho will help and advise only there current/previous members, as they are responsible for only their own arrangments. Unfortunately it appears to be coming to light that there were different levels of professional providers, those who undoubtably setup legal and counsel approved arrangements and others who probably cut corners and appear to now not be providing enough help to their previous employees.

What about contacting Michael J Perry on post #91

Worth reading

http://www.tribunals.gov.uk/financea...d-corfield.pdf

which seems to imply that how can the HMRC argue a "discovery" when arrangements were registered with HMRC they were well known to them?

[ads1980]

Providers imho will help and advise only there current/previous members, as they are responsible for only their own arrangments. Unfortunately it appears to be coming to light that there were different levels of professional providers, those who undoubtably setup legal and counsel approved arrangements and others who probably cut corners and appear to now not be providing enough help to their previous employees.

What about contacting Michael J Perry on post #91

Yes I think you are correct. All the schemes are probably set up slightly differently depending on who created them so the response my providers have sent back will not apply to all anyway and they wont know the specific set ups of all the other peoples schemes.

[EBTContractor]

I received a letter from HMRC yesterday that I need to cough up more tax for 2008/2009. I spoke to Edge this morning, and they are aware of these letters. They have taken my details and they'll be sending a standard template for appealing. I shall post the details once I receive this template.

Regards,
Suren

Sounds great, I was also with Edge back in the day...

[a Man of Constant Sorrow]

Update for those with Edge Consulting 08/09

Edge have now contacted me and informed the following complete with appeal letter text:

Their view on this is that in the first instance HMRC don’t have a leg to stand on, this view supported by KPMG, their tax advisors having not won a single ‘like-for like’ case.

In the first instance they have advised to send the letter (below) and should HMRC come knocking with further demands they will ‘consider’ appointing KPMG to fight further claims – all in all the person I spoke to appeared supremely confident this was nothing more than a fishing trip on the good ship ‘empty vessel’

Letter (this can be used by others, amended where required)

Dear xxxxx

I am writing to formally notify my appeal against an additional tax liability of £xxxxxxx assessed for the tax reporting period 2008/2009 which has arisen from an outstanding beneficial loan balance.

During the 2008/2009 tax period, I was employed by Edge Consulting Limited in the capacity of a xxxxx Consultant. My services were outsourced to an end client for an arranged fee and I was remunerated by way of an agreed salary. At this time, profit that Edge Consulting Limited generated from the outsourcing of its employees was settled into an employee benefit trust of which its employees and I as such an employee, became beneficiaries. The employees were then able to periodically request funds from the trust, this was a request made to the trustees who, at their discretion, would advance funds to the employee from the trust. The funds were paid to the employees as a loan, these loans did not attract an interest rate and were therefore regarded as beneficial to the employee. The loans have always been treated as beneficial by Edge Consulting Limited and my P11D documents support this. Furthermore, these loans all remain outstanding and can be recalled by the trustees at any time.

In consideration of the above, the outstanding EBT loan values should not be treated as income and only the relevant benefit-in-kind tax should apply. This benefit-in-kind denoted in the P11Ds should have been collected through subsequent adjustments of my PAYE tax code.

I trust this should prove sufficient at this stage.

Yours sincerely,

[KnightRider]

I have sent a sample appeal letter in this thread to Tax Talk UK asking their opinion for using something like that for TRM employees. I got the following response.

TaxTalk have not been involved with any of the past issues surrounding TRM, so seeing this detailed appeal is extremely helpful.

The appeal letter being suggested by us forms a basic wording to enable the appeal to be made within 30days of the assessment. If any individuals have a different wording that they wish to use, then they should go ahead.

I believe that all HMRC are expecting at this stage is an appeal, not necessarily too detailed, in response to estimated 2008/09 assessments that have only been issued now in order to comply with the legislative time limit of 5 April 2013.