HMRC Enquiry letters on Loans from EBT and other schemes

[webberg]

Appreciate the detailed response on this webberg.

Indeed its difficult trying to make any form of progress on this and working out the best steps to take. Most advice so far from various accounts companies has been lacking in real knowledge of the schemes and the real predicament we are in.

Has anybody actually settled with HMRC that you are aware of whilst their provider is still active?

Yes. We are helping a number of people right now.

We suspect that because we ask for certain things to be included (guarantee that the DR charge will not apply; clarification where an earlier settlement was used; etc) that we are making life difficult for ourselves and HMRC. However the client pays us to be difficult and to get as close as we can to a the "final" position that is promised.

In some instances we had the loan obligation removed last year. In others we have a view that the loan is ultra vires. In others we have a good relationship with the current owner of the loan.

In some instances, the loan was not removed last year. Some loans are definitely real. Some owners refuse to acknowledge us and will not pick up the phone or let us in their office.

[ric_77]

There is no connection between settling the tax position and having the loan repayment obligation removed.
HMRC are guilty of misleading you into thinking that they can "solve" the problem and "exit" you from tax avoidance when in fact all they can do is charge you tax on an amount that may not even be your liability.

Some loan providers will not release because they are defending their piece and a release may harm that; some don't release because they worry that a tax liability goes to them (IT or IHT); some don't release for reasons unknown - some may not have control for the loans any more, some may be waiting for the dust to settle and then ask for repayment - who knows.

Once you settle the tax on the grounds that the loans exist - HMRC may claim IHT and may claim more when the loan is finally dealt with! - I know - but it's true.

If the loan is repaid and the trust redistributes an amount (net of fees obviously), then there may be a further income tax charge - I know but it's possible.

Be careful - get advice.

Appreciate the detailed response on this webberg.

Indeed its difficult trying to make any form of progress on this and working out the best steps to take. Most advice so far from various accounts companies has been lacking in real knowledge of the schemes and the real predicament we are in.

Has anybody actually settled with HMRC that you are aware of whilst their provider is still active?

[webberg]

I'm also looking to settle with HMRC and the scheme provider i was with are still active and i have asked them to clarify what the status of the loans are, ie are they written off.

They have replied to say that would not be the case and that the loans will not be 'written off'.

So what bearing does this have on settling, does it render it somewhat illogical given what the provider has confirmed above?

There is no connection between settling the tax position and having the loan repayment obligation removed.
HMRC are guilty of misleading you into thinking that they can "solve" the problem and "exit" you from tax avoidance when in fact all they can do is charge you tax on an amount that may not even be your liability.

Some loan providers will not release because they are defending their piece and a release may harm that; some don't release because they worry that a tax liability goes to them (IT or IHT); some don't release for reasons unknown - some may not have control for the loans any more, some may be waiting for the dust to settle and then ask for repayment - who knows.

Once you settle the tax on the grounds that the loans exist - HMRC may claim IHT and may claim more when the loan is finally dealt with! - I know - but it's true.

If the loan is repaid and the trust redistributes an amount (net of fees obviously), then there may be a further income tax charge - I know but it's possible.

Be careful - get advice.

[ric_77]

I'm also looking to settle with HMRC and the scheme provider i was with are still active and i have asked them to clarify what the status of the loans are, ie are they written off.

They have replied to say that would not be the case and that the loans will not be 'written off'.

So what bearing does this have on settling, does it render it somewhat illogical given what the provider has confirmed above?

[ConfusedEasily]

If you have money in your Ltd Co then I wonder if they could force you to take dividends to cover the tax bill (assuming profits/funds allow).

Nope - they can't - however, DMB can get pretty unpleasant.

It is worth noting that there are very few (if any) bankruptcy proceedings resulting from APN demands at the moment.

I'm holding fire at the moment - the 2019 charge, APNs etc. are designed to push you towards a settlement.

I can't settle because I have no idea of the sums (so long ago) and neither do HMRC - so I have no idea how much my 'voluntary' contribution should be.

If you want a real laugh - HMC suggested I speak to my employer (of the time) to get a guess on how much I owe. I suggested HMRC could ask them and just get the PAYE at the same time but that led to an embarrassing silence.

You couldn't make this up. You'd have to be a ******* idiot to resolve this mess using something as half-assed as the 2019 loan charge...no...wait....

[ConfusedEasily]

You'd have to lie to get a remortgage to pay a tax bill and I guess that's mortgage fraud...

Similar with personal loans - I said it's to pay a tax bill and they refused me. Eventually I did a debt consolidation on a loan and then paid the first lump of APN on a CC. As I understand it, it is now banned to pay tax bills using CCs.

We don't really stand a chance with all of this, unless DMB take a reasonable TTP...

Not necessarily - if you have enough equity in your home you may be able to borrow the money under debt consolidation. I know of one person who applied for a remortgage for exactly this purpose and got it. They had an LTV of 50%

[ChimpMaster]

You'd have to lie to get a remortgage to pay a tax bill and I guess that's mortgage fraud...

Similar with personal loans - I said it's to pay a tax bill and they refused me. Eventually I did a debt consolidation on a loan and then paid the first lump of APN on a CC. As I understand it, it is now banned to pay tax bills using CCs.

We don't really stand a chance with all of this, unless DMB take a reasonable TTP...

If you have money in your Ltd Co then I wonder if they could force you to take dividends to cover the tax bill (assuming profits/funds allow).

[andyc2000]

You'd have to lie to get a remortgage to pay a tax bill and I guess that's mortgage fraud...

Similar with personal loans - I said it's to pay a tax bill and they refused me. Eventually I did a debt consolidation on a loan and then paid the first lump of APN on a CC. As I understand it, it is now banned to pay tax bills using CCs.

We don't really stand a chance with all of this, unless DMB take a reasonable TTP...

[RJJ85]

I arranged TTP in May 17 on my 5apn's ....... paid a chunk .. then 24 slices with a balloon due at the end.

was pretty easy to arrange and did it all over the phone with nothing being sent to proove earnings etc etc

I heard DMB are being less helpful recently however :-(

Thanks for sharing.

My hope only lies on the fact that the amount due is quite substantial and i am clearing 35-40% which is big enough. I have not received any APN. I have asked for settlement and i am hoping that they will be accommodating then pushy (its only my guess work though)

Out of curiosity - did anyone EVER try to ask for a discount on personal grounds / or the fact that HMRC were sluggish that lead us poor hardworking people into this stage? after all we have been the victim of these schemes and paying huge taxes.

Looking for advice/opinions

[CanPayButWouldRatherNot]

TTP

I arranged TTP in May 17 on my 5apn's ....... paid a chunk .. then 24 slices with a balloon due at the end.

was pretty easy to arrange and did it all over the phone with nothing being sent to proove earnings etc etc

I heard DMB are being less helpful recently however :-(