HMRC Enquiry letters on Loans from EBT and other schemes

[Vallah]

Hi Michael,

I assume that if HMRC do decide to litigate they will agree test/lead cases, possibly on a per-scheme basis, and ask everyone else if they agree to be bound by the outcome?

Since you now appear to be acting for a number of different scheme users, do you mind me asking what your litigation strategy is? Do you intend to represent the litigants at a tribunal yourself, or appoint a tax counsel (barrister/QC)? If the latter, how is this going to be paid for because tax barristers don't come cheap? I'm sure you are aware that HMRC won't spare any expense when it comes to hiring the best legal representation.

It is very unfortunate that it has come to this. People paid exorbitant fees to use these schemes, which should have covered the cost of any litigation, and now they are going to have to pay twice.

Regards
DR

Some of the promoters listed above are still in existence, and where this is the case I think the people with an enquiry would be best contacting the companies concerned. Not everybody is going to have to pay twice.

[DonkeyRhubarb]

Some of the promoters listed above are still in existence, and where this is the case I think the people with an enquiry would be best contacting the companies concerned. Not everybody is going to have to pay twice.

Absolutely. First port of call for anyone affected should be the company who ran the scheme.

[porrker]

Some of the promoters listed above are still in existence, and where this is the case I think the people with an enquiry would be best contacting the companies concerned. Not everybody is going to have to pay twice.

Interesting point. I know of one provider that in January moved its employees to a new entity. When pushed on why they stated to isolate the loans. Even thou they are yet to be mentioned within this thread I wonder if its to prepare For letters hitting their employees past and present door mat. I now wonder how many of these providers will hang around.

[Stanley]

HMRC Discovery Letter for EBT through Cascade Management?

Hi,

I'm a Newbie here, first post. *

I too have received the same discovery letter from Hector re the 2008/09 tax year relating to loans through an EBT. The operator of my scheme was Cascade Management Solutions (havent seen Cascade mentioned much here). I joined the scheme in April 2007 and left in March 2009, so two tax years. *Been PAYE since then. *I've been in touch with Cascade and they are being helpful: say that they are in touch with their tax advisors (Kingston Smith LLP) and are considering whether an appeal will go ahead on a group or individual basis. *I'd prefer an appeal went forward as a group, but even if on an individual appeal they say they will provide all the necessary letter templates, etc and I will definitely appeal. My questions are:

1- Anyone else from Cascade get the same letter? *Had any independent advice? *Will you appeal?
2- Do people have a view on whether HMRC are likely to pursue previous years, 07/08? * I'm aware of the general four year limit for issuing assessmemts but am aware they can go back further if they feel there was deliberate intent to mislead.*

Any other general thoughts or suggestions gratefully heard...

[Chods]

THE FOLLOWING IS A COPY OF MY LATEST CLIENT ALERT!

Notice to clients issued with an HMRC 2008/09 Section 29 TMA 1970 discovery assessment:

If you have recently received an assessment you have only 30 days to appeal and apply for postponement. If this deadline is missed, HMRC may not accept a late appeal.

Some clients that have received an assessment are already under investigation by HMRC and those that are currently not will be. This will be conducted under HMRC Code of Practice 8 a copy of which is attached. You should read this as it explains what is involved and your rights as a taxpayer.

Michael - What does this mean?

[contr7758301]

Hi,

I'm a Newbie here, first post. *

I too have received the same discovery letter from Hector re the 2008/09 tax year relating to loans through an EBT. The operator of my scheme was Cascade Management Solutions (havent seen Cascade mentioned much here). I joined the scheme in April 2007 and left in March 2009, so two tax years. *Been PAYE since then. *I've been in touch with Cascade and they are being helpful: say that they are in touch with their tax advisors (Kingston Smith LLP) and are considering whether an appeal will go ahead on a group or individual basis. *I'd prefer an appeal went forward as a group, but even if on an individual appeal they say they will provide all the necessary letter templates, etc and I will definitely appeal. My questions are:

1- Anyone else from Cascade get the same letter? *Had any independent advice? *Will you appeal?
2- Do people have a view on whether HMRC are likely to pursue previous years, 07/08? * I'm aware of the general four year limit for issuing assessmemts but am aware they can go back further if they feel there was deliberate intent to mislead.*

Any other general thoughts or suggestions gratefully heard...

Me and another two of my friends have received the letters and have spoken to the people. We would have to appeal as have no funds to pay at this stage. (All lost in 2007-08 shares firesale). And recommendation is that once the appeal is successful, work the backside generating the money to pay Hector into CTD.

View on retro is a resounding yes, unfortunately. There is no way Hector will take a loss in another case as the end. There will be different tactics and different approaches.

Currently though, they are publicly targeting the operators for settlement. The beneficiaries are not much encouraged or discouraged about settlement as the focus is on the PAYE and NICs not paid by the operators.

That much is what we understood.

[Stanley]

Me and another two of my friends have received the letters and have spoken to the people. We would have to appeal as have no funds to pay at this stage. (All lost in 2007-08 shares firesale). And recommendation is that once the appeal is successful, work the backside generating the money to pay Hector into CTD.

View on retro is a resounding yes, unfortunately. There is no way Hector will take a loss in another case as the end. There will be different tactics and different approaches.

Currently though, they are publicly targeting the operators for settlement. The beneficiaries are not much encouraged or discouraged about settlement as the focus is on the PAYE and NICs not paid by the operators.

That much is what we understood.

Yes, I've had the same advice re CTD - may start stashing some money away into one now as apparently that stops the interest ticking up. My adviser also suggested it shows intent to pay and that can be used favourably to argue against penalties.

I did speak with Kingston Smith as well - they were much more bullish that its too late to go back to 07/08 but I'm not so sure...

I'm waiting to hear back from Cascade and will then raise the appeal. Looks like this could drag on for awhile..

[sal626]

In case people missed this..

Contractors' Questions: Any advice for EBT contractors under HMRC enquiry? :: Contractor UK

[contr7758301]

Yes, I've had the same advice re CTD - may start stashing some money away into one now as apparently that stops the interest ticking up. My adviser also suggested it shows intent to pay and that can be used favourably to argue against penalties.

I did speak with Kingston Smith as well - they were much more bullish that its too late to go back to 07/08 but I'm not so sure...

I'm waiting to hear back from Cascade and will then raise the appeal. Looks like this could drag on for awhile..

One of my friends was thinking about repaying the loan and get Hector off the back. And then reclaim the money in the proper way by billing the operators for services through a LtdCo and paying CT on it. Don't know if it is viable. And also he is yet to talk to a proper tax advisor. Will be interesting to know the outcome. Will update once any details emerge.

[Michael J Perry FCA]

HMRC Code of Practice 8 - a must read!

I am receiving a number of PM's and have supplied over 20 appeal letter templates free of charge.

I am happy to help anyone who is suffering genuine financial hardship and has a problem with HMRC.

However, please do not contact me and question my qualifications and advice. Do your due diligence before calling!

Here is an extract from COP8 in answer to a PM I just replied to and it may be worth sharing for those with their heads still firmly in the sand:

That is correct. HMRC have stated that they consider the loans to be UK taxable income and will pursue each case. You must read COP8 and here is an extract if in doubt:

Most taxpayers pay what is due and others make genuine
mistakes. Some, however, deliberately try to pay less than the
correct amount or take advantage of a scheme or device to
reduce or eliminate a liability that might otherwise be due. If we
suspect this, we will investigate thoroughly to establish the facts.
We do not conduct investigations under this Code of Practice with
a criminal prosecution in mind but towards a financial recovery of
any tax, interest and penalties you owe.