HMRC Enquiry letters on Loans from EBT and other schemes

[webberg]

could you please advise?
I have received a letter from HMRC asking for payment on my self -assessment for 2011-12. I have worked for an umbrella company for about 3+ months in 2011, HMRC seem to be counting the loans/partnership amount as profits and asking me to pay tax on it. I spoke to my umbrella company regarding this, they are appealing on behalf of me. What should i do now? whether to pay this amount and get it back once the appeal is successful? My current accountant told me to pay it now and I can get it back after the appeal, how to go about it?

Speak to your accountant who should be able to help you

[Whysoserious]

Did you put a Dotas number on your tax return for that year? If the answer is no then there is a very strong chance that YOU did not undertake a 'tax avoidance' scheme but the scheme provider did.

Therefore if I was you I would do the following (but please speak to your accountant):
1. Via your umbrella company, ensure they are appealing the APN on the basis that the values are incorrect or no discovery assessment or you did not undertake the avoidance scheme, the umbrella company did (based on who recorded a Dotas number on the return).
2. The umbrella comp. should lodge a Judicial Review based on the above (and more legal issues they will know of)
3. Via your accountant claim financial hardship to HMRC.
4. HMRC cannot cause you any hardship to repay the APN amount, as at this stage it is only a payment on account. They cannot bankrupt you, they cannot force the sale of your home, they cannot make you sell cars etc.
5. Don't pay a penny and wait for the proper legal process to take effect. When you win in court and HMRC lose, smile and thank yourself for not paying a penny.

6. Do you think if you pay upfront, that HMRC will truly give you your money back when they lose at court? HMRC will appeal all the way through the courts (8-10 years duration) and then most likely claim they don't have the money to repay you immediately. They will reduce you NI contributions for the next XX years.

Just my thoughts. This is based on your scheme / umbrella being robust. I don't know if it is, but you should know before proceeding down this path.

[Nissan07]

Too Simplistic!

Am I being too simplistic here, but doesn't the law protect against retrospective actions, this is an interesting read

https://www.liberty-human-rights.org...nt-without-law

[DotasScandal]

Am I being too simplistic here, but doesn't the law protect against retrospective actions

Ask the NTRT guys how the law protected them.

[DonkeyRhubarb]

Ask the NTRT guys how the law protected them.

Convention rights are very weak in the area of taxation. We found that out the hard way.

[webberg]

Am I being too simplistic here, but doesn't the law protect against retrospective actions, this is an interesting read

https://www.liberty-human-rights.org...nt-without-law

Yes.

It is EU precedent that states can take action to protect their tax base, even when that means retrospection.

[webberg]

Did you put a Dotas number on your tax return for that year? If the answer is no then there is a very strong chance that YOU did not undertake a 'tax avoidance' scheme but the scheme provider did.

Therefore if I was you I would do the following (but please speak to your accountant):
1. Via your umbrella company, ensure they are appealing the APN on the basis that the values are incorrect or no discovery assessment or you did not undertake the avoidance scheme, the umbrella company did (based on who recorded a Dotas number on the return).
2. The umbrella comp. should lodge a Judicial Review based on the above (and more legal issues they will know of)
3. Via your accountant claim financial hardship to HMRC.
4. HMRC cannot cause you any hardship to repay the APN amount, as at this stage it is only a payment on account. They cannot bankrupt you, they cannot force the sale of your home, they cannot make you sell cars etc.
5. Don't pay a penny and wait for the proper legal process to take effect. When you win in court and HMRC lose, smile and thank yourself for not paying a penny.

6. Do you think if you pay upfront, that HMRC will truly give you your money back when they lose at court? HMRC will appeal all the way through the courts (8-10 years duration) and then most likely claim they don't have the money to repay you immediately. They will reduce you NI contributions for the next XX years.

Just my thoughts. This is based on your scheme / umbrella being robust. I don't know if it is, but you should know before proceeding down this path.

Be careful. SELF assessment means that what goes on YOUR return is YOUR responsibility.

I would very much doubt that an argument based on the scheme and declaration being perpetrated by a third party is going to cut any ice.

Your views on Judicial Review are noted. Personally I'm not a fan and would not recommend that route.

The information on hardship and the ability of a magistrate to force penury for a disputed amount, I'm not qualified to answer. I recommend speaking with a professional on this.

Be careful about not paying an APN. There is a penalty regime (not a disputed debt perhaps?) that could amount to 15% of the APN value. Take advice.

Finally, with regard to point 6, I would have to disagree in the strongest terms.

Time to final litigation? Perhaps 5 to 7 years. Claim that they have no money? Either you're being sarcastic and I've missed it or perhaps too cynical. If the APN value is eventually found to be excessive, it WILL be repaid. Failing to do that would be the final blow to Joe Public having any trust in HMRC and that would create an impossible situation for whichever Government we have then.

[tax is taxing]

Interim relief granted for Judicial Review applications - Sanzar users

If you have used Sanzar Solutions / Partnership before and still haven't joined our group, you may find the following useful and perhaps makes a case for joining the group.

1) Pinsent mason has secured Interim relief for those who have brought Judicial review against APNs. 5 out of 7 cases have secured relief over the past 3 weeks. As I understand it, this relief means that 5% six monthly penalties will not be applied until the we loose the Judicial review. This has been a sticking point for many of us (to accumulate 15% penalty whilst fighting the case). Assuming we get the relief, the penalty will apply only if we loose the appeal.

2) Should we get the interim relief, HMRC will not allowed to proceed to collection until the judicial reivew process is complete.

3) We are in the process of gathering more info from Pinsent Mason.

We have 45 members in our group and the more we are in numbers, the cheaper it gets to bring the Judicial review.

[webberg]

I don't know if this is related or not but in a meeting with HMRC today, they said that a contractor JR claim had failed in the last few days.

No details of which scheme I'm afraid.

[jbryce]

If you have used Sanzar Solutions / Partnership before and still haven't joined our group, you may find the following useful and perhaps makes a case for joining the group.

1) Pinsent mason has secured Interim relief for those who have brought Judicial review against APNs. 5 out of 7 cases have secured relief over the past 3 weeks. As I understand it, this relief means that 5% six monthly penalties will not be applied until the we loose the Judicial review. This has been a sticking point for many of us (to accumulate 15% penalty whilst fighting the case). Assuming we get the relief, the penalty will apply only if we loose the appeal.

2) Should we get the interim relief, HMRC will not allowed to proceed to collection until the judicial reivew process is complete.

3) We are in the process of gathering more info from Pinsent Mason.

We have 45 members in our group and the more we are in numbers, the cheaper it gets to bring the Judicial review.

Can I beg all members of whatever groups you are in to join the Big Group? It's not expensive and does have the benefit of large numbers, it's led by specialists and they are in the initial stages of engagement with HMRC.
Good luck with the JR, but in the meantime...join the Big Group!!!