HMRC enquiries for EBT schemes through SANZAR

[Sting]

Is it me or does the tone of the latest communication almost try and scare you in to settling? I get the feeling that if we don't settle, we'll be left high and dry by CM/CH.

Other schemes seem to have a much more aggressive approach to defending our position.

Thoughts?

Agree the tone of todays communication was downbeat considering where we are with the Rangers case

[oldari]

Is it me or does the tone of the latest communication almost try and scare you in to settling? I get the feeling that if we don't settle, we'll be left high and dry by CM/CH.

Other schemes seem to have a much more aggressive approach to defending our position.

Thoughts?

Today I received communication from CH and it seems their idea is to settle with HMRC:

We are pleased to advise we have an agreement in principle with HMR&C to offer you what we are a calling our “pre-pack” option. Whilst there is still process detail to conclude, this option essentially means we are leveraging our long-standing relationship with HMR&C to offer you something no other contractor support group can. As you will appreciate, it has taken a lot of time and effort to obtain this agreement/concession so thank you for your patience.

One of the questions we get a lot is “why do I need to pay additional tax now – it’s not fair.” The short answer is we agree - however the Government passed new laws in the summer (Finance Act 2014) which gave HMR&C the right in law to collect upfront “payments on account” without needing to prove their belief that loans you received (from EBT-based schemes running until April 2011) were payments of income. Accordingly, HMR&C are acting within their powers to do so. These new powers are known as “Accelerated Payment Notices” (APN’s) and we mentioned them in our last update. They are a real “hot topic” in the industry at present.

We know from speaking with many of you that this change to the law means you now reluctantly acknowledge this force majeure and so want to understand how you might meet the bill that has fallen due in law. There is however reasons to remain positive – in that the amount payable is something that remains within your power and control. For example, the SO is we believe a final opportunity to settle on far more preferential terms compared to as/when HMR&C deploy the APN’s – which could even start as soon as February next year.

If you have already let us know of your intention to use the “pre-pack” then you do not need to advise us of this again. You are already on our list so you can now jump to the section entitled “Next Steps” below.

If you have previously indicated to us you were not interested in the SO or were undecided then please consider the following;

By registering your interest in the SO with us, you are NOT making any commitment to proceed. It will simply allow you to be armed with the information to allow you to make an informed decision. You retain the right to walk away from the SO should you wish to.

HMR&C’s deadline for registering an interest in the SO is currently January 9th 2015. We expect any who have not done so by then will be lined up to receive an APN (assuming they meet the criteria for receiving one). Thousands of APNs have already been issued to users of film investment write-off schemes.

The amount due under the SO would be less than under the APN - as the latter is expected to contain not only the income tax and interest charged as per the SO, but also include National Insurance and penalties. Under the terms of the SO, HMR&C will also effectively “close the file” for any enquiries in that period.

Part of our “pre-pack” contains a concession from HMR&C for us to “pre-approve” requests for extended payment terms where an individual can suitably demonstrate repayment within 90 days is not possible.

As you might expect with any HMR&C process, you must ensure you complete it in full accordance with their expectations to secure the desired outcome. We understand specifically what needs to be provided and how best to do that, so it makes sense for you to benefit from that knowledge. Attempting to undertake it yourself could lead to the potential for errors, resulting in the possibility of further unwanted attention from HMR&C in future.

If after reading the above you have decided you now wish to change your mind and sign up to be part of the “pre-pack”, then you need to be quick. Please notify us by email by latest Monday 8th December and remember we can only accommodate a fixed number of you. All remaining pre-pack spaces will be allocated on a strict “first come, first served” basis.

We will shortly provide everyone who has/will pre-register with us for the pre-pack with more detail about how it will work, the various responsibilities shared between you, us (Contractor Helpdesk), HMR&C and our advisors – along with the expected timescales for completion. In the meantime, we recommend that everyone undertakes the following two actions;

"Next Steps"

If you currently hold any loan amount documents (e.g. drawdown statements, P11D’s, etc) within your possession at the moment, then it is worth adding those figures up to get an indicative total amount of loan payments up to April 2011. When HMR&C provide you with their own figures in due course, you will then already have a benchmark figure to compare it with.

If you don’t have your loan documents readily to hand, then don’t worry as we will check what information exists within the statutory “Books and Records” handed over to us previously by your promoter.

Contractor Helpdesk cannot provide you with tax advice, so whilst we believe the SO represents the “least worst” outcome for you, we cannot say if is right for you and your specific circumstances. Accordingly, if you have not already done so, please consider engaging with a tax advisor and/or accountant. They will help you determine your current financial position ahead of receiving any SO figure. Having an overview of your income and expenditure levels is critical if you wish to be considered (as mentioned earlier) for repayment over a longer timeframe than the current 90 days under the SO rules. This then removes the requirement for you to go through HMR&C’s formal and rigorous “Time To Pay” process. If you would like a template to discuss with your advisor, then just let us know.

In summary, the recent changes to law mean HMR&C has the right to collect “tax in dispute” upfront regardless of how any of us may feel about that. So, we think our (and your) focus now needs to shift to minimising the size of that demand. It is our view the SO presents you with that and we hope you feel now is the time to act so to bring some much-wanted closure as we head into 2015.

It doesn't look to me they are willing to put any fight against HMRC. Hard to say if they will negotiate some preferential terms for group settlement. I was hoping they are going to organize something as the guys from Edge did i.e. get tax advisers/lawyers to fight back and question the discovery itself. On the other hand maybe they did and it turned out there is nothing to win there hence their approach. Settle and have it over with.
Thoughts?

[StrengthInNumbers]

NI and Penalties for what? So apply NI under ToAA - not even HMRC will know how that will work! God might.
I guess this provider does not want to pay for litigation and this help desk is for helping the promotors so that people don't complain rather then help contractors. Why not pay and APN and try a day in court? Penalties for what? pre package which is available to anyone ... this is shambles.

Stop , save for APN and pay (you will have to - you don't have an option), form a group and go for litigation. Get all docs for litigation while the help desk is around!

[jbryce]

"The amount due under the SO would be less than under the APN - as the latter is expected to contain not only the income tax and interest charged as per the SO, but also include National Insurance and penalties. Under the terms of the SO, HMR&C will also effectively “close the file” for any enquiries in that period."

mmmmm my accountant has discussed this with HMRC and is under the impression that the APN, against a DOTAS scheme, will be for the tax under dispute. Penalties and NI may follow after the case has been pursued and found for HMRC at an FTT.
Of course late payment of an APN may attract late payment penalties.

[TheDandy]

Today I received communication from CH and it seems their idea is to settle with HMRC:



It doesn't look to me they are willing to put any fight against HMRC. Hard to say if they will negotiate some preferential terms for group settlement. I was hoping they are going to organize something as the guys from Edge did i.e. get tax advisers/lawyers to fight back and question the discovery itself. On the other hand maybe they did and it turned out there is nothing to win there hence their approach. Settle and have it over with.
Thoughts?

Perhaps representation is found wanting, who can say.

[TheDandy]

NI and Penalties for what? So apply NI under ToAA - not even HMRC will know how that will work! God might.
I guess this provider does not want to pay for litigation and this help desk is for helping the promotors so that people don't complain rather then help contractors. Why not pay and APN and try a day in court? Penalties for what? pre package which is available to anyone ... this is shambles.

Stop , save for APN and pay (you will have to - you don't have an option), form a group and go for litigation. Get all docs for litigation while the help desk is around!

[DutchMan]

Ex DarwinPay

Please Admin can I have pm rights. No access to anything at the moment

[administrator]

Please Admin can I have pm rights. No access to anything at the moment

Your account has now been upgraded.

[LLAB]

Ex sanzar

Hi admin just found this site as I have also received the email from chd regarding the SO. could I please have PM added thanks

[administrator]

Hi admin just found this site as I have also received the email from chd regarding the SO. could I please have PM added thanks

Done!