HMRC Enquiry letters on Loans from EBT and other schemes

[Iliketax]

So what's the solution then? There is a key for any lock! Must be a way for all of this.

My answer is to choose another metaphor - it's not a lock.

[webberg]

My answer is to choose another metaphor - it's not a lock.

Unless it's a Gordian variety?

[stonehenge]

So what's the solution then? There is a key for any lock! Must be a way for all of this.

Leg it to Panama.

[Finalwhistle]

Hmmm

No, not negative. Factual and based on law.

The loan pay back to avoid the DR charge is anticipated and dealt with in the legislation. It very specifically says that unless you can get within the "commercial loan" exemption (and I would be amazed if any loans in this situation could) then any arrangement which sees the loan being repaid and the cash coming back to the borrower in some form can be ignored.

Like I said, almost certainly the cash coming back is taxable under Part 7a.

I think you have some valid points that in a reasonable world should be taken into account. You have to realise here however that HMRC consider you have perpetrated a tax avoidance scheme and as such tax must be paid. Therefore applying logic and common sense is not going to get you far in dealing with the complex web of law that exists. I think you need to realise the situation you are in and understand that what you were sold probably no longer achieves what you were told and indeed may never have done so. Until you come to terms with the realities of life here, I and other specialists here are going to struggle to remove you rose tinted glasses.

Thanks webberg. Bear with me please... I’m trying )
I don’t have rose tinted glasses I’m just trying to explore options. But you are right o am thinking of options based on logic and the fact of the matter is that I have no idea of the Laws or gravity of the situation. However I am a realist and NEED to know what the worst case is so I can prepare for it financially. BUT does it makes sense and sit and wait for April 2019 or try and do something prior to that? (if it is more cost efficient). I think from your options you said CLSO2 is the only other option (although still not guaranteed). I don’t have money for litigation.
Apologies for the “promoter of options”, I may have stolen someone else’s words rather than yours/WTT.
Please if you could explain the analysis bit that you’re looking at... and what that ultimately achieves? If I am struggling to understand what WTT are offering individuals like us then there maybe others who need the clarification.
Thanks again for your time

[Finalwhistle]

Hmmm

No, not negative. Factual and based on law.

The loan pay back to avoid the DR charge is anticipated and dealt with in the legislation. It very specifically says that unless you can get within the "commercial loan" exemption (and I would be amazed if any loans in this situation could) then any arrangement which sees the loan being repaid and the cash coming back to the borrower in some form can be ignored.

Like I said, almost certainly the cash coming back is taxable under Part 7a.

I think you have some valid points that in a reasonable world should be taken into account. You have to realise here however that HMRC consider you have perpetrated a tax avoidance scheme and as such tax must be paid. Therefore applying logic and common sense is not going to get you far in dealing with the complex web of law that exists. I think you need to realise the situation you are in and understand that what you were sold probably no longer achieves what you were told and indeed may never have done so. Until you come to terms with the realities of life here, I and other specialists here are going to struggle to remove you rose tinted glasses.

Can I just try putting this in another way. I’m not trying to avoid paying PAYE/NIC on the loan. I’m trying to make sure that is all I pay, rather than penalties or excessive charges. Does that makes sense? I appreciate I’m probably trying to over simplify it (again)

[webberg]

Can I just try putting this in another way. I’m not trying to avoid paying PAYE/NIC on the loan. I’m trying to make sure that is all I pay, rather than penalties or excessive charges. Does that makes sense? I appreciate I’m probably trying to over simplify it (again)

Then you need CLSO 2.

You can go it alone on that or you can hire somebody to help.

The help will be unlikely to reduce the amount demanded but you will know what you have when you sign the paper.

We can help you. Phil who has started posting recently can help you. There is a poster called ILiketax but I think he is not in this world so far as fees go. Otherwise any competent adviser.

All I would say is do not go back to the promoter of the scheme or any of the advisers they put you in touch with.

[ChimpMaster]

Then you need CLSO 2.

You can go it alone on that or you can hire somebody to help.

The help will be unlikely to reduce the amount demanded but you will know what you have when you sign the paper.

We can help you. Phil who has started posting recently can help you. There is a poster called ILiketax but I think he is not in this world so far as fees go. Otherwise any competent adviser.

All I would say is do not go back to the promoter of the scheme or any of the advisers they put you in touch with.

Webberg:

If one settles with CLSO2, do HMRC still require the loans to be reported under the 2019 DR charge?

As I understand it, loans will still have to be reported but only for 'informational purposes'. Unless of course HMRC think they can screw more tax out.

[Iliketax]

If one settles with CLSO2, do HMRC still require the loans to be reported under the 2019 DR charge?

As I understand it, loans will still have to be reported but only for 'informational purposes'.

On Tuesday a policy person at HMRC responsible for the legislation said that if someone settles then they do not need to report. My reading of the draft legislation is different. I'm sure HMRC will confirm what they want people to do once the current Finance Bill receives Royal Assent.

It's not clear what, if anything, would need to go on self-assessment tax returns if people have already settled.

[Finalwhistle]

Then you need CLSO 2.

You can go it alone on that or you can hire somebody to help.

The help will be unlikely to reduce the amount demanded but you will know what you have when you sign the paper.

We can help you. Phil who has started posting recently can help you. There is a poster called ILiketax but I think he is not in this world so far as fees go. Otherwise any competent adviser.

All I would say is do not go back to the promoter of the scheme or any of the advisers they put you in touch with.

yup webberg...i'm thinking CLSO too.
May I ask what the difference is between going through a CLSO or just re-submitting my SA declaring the loans in relevant years as income? as if putting on my SA i can just use my normal accountants?
I'm still a little bit frustrated that i don't get the opportunity to utilise that money to put into pensions with some tax relief. But i guess this is the penalty HMRC want me to pay. However, HMRC represent the government who are conscious that people aren't putting into pensions...and the longer term cost this has on the government. I guess i'm fortunate in some ways (here are my rose tinted glasses again web!) that this has happened to me whilst i'm relatively young and still earning money. But there are some guys this is happening to who are at the end of their careers. Even if they just gave a capped amount that could be put into pensions or a max percentage of the total monies received. Do you think this is something that could potentially be negotiated with HMRC webberg? has anyone ever asked the question? they can only say no right? I think this has moment if a collective group and may actually encourage more people to adopt CLSO? i.e. "I have 100+ contractors willing to adopt CLSO if they are able to demonstrate 20% put into a legitimate pension will not be taxed".
funnily enough my provider recommended WTT ) that's why i'm giving you such a hard time looool
thanks as always for your time....Phil can you get in touch?? if you're cheaper than WTT i'm in

[Finalwhistle]

iliketax

On Tuesday a policy person at HMRC responsible for the legislation said that if someone settles then they do not need to report. My reading of the draft legislation is different. I'm sure HMRC will confirm what they want people to do once the current Finance Bill receives Royal Assent.

It's not clear what, if anything, would need to go on self-assessment tax returns if people have already settled.

what happens if you just put it on your SA and don't go through CLSO? surely it amounts to the same thing!?