HMRC enquiries for EBT schemes through SANZAR

[vern19]

If it is true – this is just a confirmation that HMRC could not win it now, but it will in the near future.
Rangers won the case as HMRC was not prepared well.
In any case Full amount = reduced amount + NIC

I will say that when I got my discovery notice in March I was very concerned and was tempted to pay up there and then but as I've had time to consider this and after much discussion with lots of other people in this mess and at least 4 tax specialists I am very glad that I appealed.

Before doing anything get professional advice. The general consensus from those with experience of this is to appeal and just get on with your life.

[ssbahra]

Hi,

I never said it was settled, indeed my appeal is in and will no doubt sit dormant for the next few years until HMRC realise that they probably haven't got much hope in proving that any of us owe them anything. Remember, what they think and or know and what they can prove beyond doubt may well be two different things.

All I did say was that HMRC cannot now issue any discovery assessments for the 08-09 year to anybody, that is unless you didn't disclose schemes etc on your original return, in which case they still would have until April 2015 to hit you with it.

After taking legal advice on this I was also told that if I were to settle the 08-09 year, then in all likelihood HMRC would then start hitting me for anything else they think off (including subsequent years), as if you settle once then it's more or less an admission of guilt. I'm not saying that approach is going to be right for everyone, but I won't be paying anything until every legal challenge and appeal has been concluded........and based upon said legal advice it's questionable as to whether HMRC would win this one anyway, or whether the time, effort and cost in doing so is actually worth their while.

Thanks for your feedback. Very helpful indeed! I too am going to fight this up until the end.

[badchi]

Hi. How is this going? Any further correspondance? I just contcated CH and they are now sending out their own templates for appeal. Need a tax advsior ideally.

Hi, I am in the same boat for 09/10, what template letter did you use in the end? and how can I get a copy? thanks

[MrO666]

Hi, I am in the same boat for 09/10, what template letter did you use in the end? and how can I get a copy? thanks

HI,

When did you get the assessment for 09-10, and was the wording the same as the 08-09 letter ?

I've spoken to a number of both scheme providers and tax professionals, and as far as they all are aware there's not been any action (en-mass at least) regarding 09-10 from HMRC at all, so the combined view seems to be that individuals receiving assessments for 09-10 are on a case by case basis and not a bulk attack like 08-09 (perhaps possibly seen as easy targets).

The general thoughts that I'm hearing seem to be that HMRC will in all likelihood assess what kind of results that they got from the 08-09 letters based upon what it cost them to do it. Depending on how that stands will probably determine whether or not they do the same for 09-10 etc.

All of this is just my opinion mind........

[Reggie]

2009-2010 Discovery Assesment - Sanzar Solutions

HI,

When did you get the assessment for 09-10, and was the wording the same as the 08-09 letter ?

I've spoken to a number of both scheme providers and tax professionals, and as far as they all are aware there's not been any action (en-mass at least) regarding 09-10 from HMRC at all, so the combined view seems to be that individuals receiving assessments for 09-10 are on a case by case basis and not a bulk attack like 08-09 (perhaps possibly seen as easy targets).

The general thoughts that I'm hearing seem to be that HMRC will in all likelihood assess what kind of results that they got from the 08-09 letters based upon what it cost them to do it. Depending on how that stands will probably determine whether or not they do the same for 09-10 etc.

All of this is just my opinion mind........

Hi,

I got the same one 2 weeks ago.

It states the following

"I enclose a notice of assessment to Income Tax for the 2009-2010 tax year. I have made this assessment under the discovery provisions of Section 29 Taxes Management Act 1970.

In addition to income already taxed, the assessment brings into charge further sums that you received during this tax year. The sum arose from tax avoidance arrangements you entered into with The Sanzar Solutions IOM Partnership, a company sited outside of the UK. Although described as loans, I believe that these sums related to your profrssional work in the UK and are taxable income, either as such or under long-stand standing anti-avoidance rules. In the assessment I have estimated the additional taxable income based on the information currently available to me. If the figure is wrong please let me know and I will change it"

Well I intend to tell them thier figure is wrong and should be changed to Zero as they are talking rubbish!

[MrO666]

Hi,

I got the same one 2 weeks ago.

It states the following

"I enclose a notice of assessment to Income Tax for the 2009-2010 tax year. I have made this assessment under the discovery provisions of Section 29 Taxes Management Act 1970.

In addition to income already taxed, the assessment brings into charge further sums that you received during this tax year. The sum arose from tax avoidance arrangements you entered into with The Sanzar Solutions IOM Partnership, a company sited outside of the UK. Although described as loans, I believe that these sums related to your profrssional work in the UK and are taxable income, either as such or under long-stand standing anti-avoidance rules. In the assessment I have estimated the additional taxable income based on the information currently available to me. If the figure is wrong please let me know and I will change it"

Well I intend to tell them thier figure is wrong and should be changed to Zero as they are talking rubbish!

Did you also get an assessment for 08-09 back in Feb/Mar this year ?

If you did, how did you appeal it (assuming you did) and have you ever entered into any discussions directly with HMRC yourself (or paid them anything)?

My contacts are telling me that the only ones they're aware of where people have been hit with 09-10 assessments was for people who either appealed directly or who actually paid HMRC something in relation to the 08-09 demand. Basically it looks at though HMRC might be looking for easy targets and low hanging fruit so to speak.

I'm not saying that right, it's only my opinion. Whilst it wouldn't surprise me at all if HMRC hit everyone with the 09-10 assessments, it would seem slightly premature at the moment. Like I said previously, HMRC have a duty of care to ensure value for money. No matter what both HMRC and the wider public think about tax avoidance, most people would also not be too happy if HMRC said it cost them £1 to collect 50 pence......

[MrO666]

Existing HMRC rules don’t require any further costly investigations even if tax demands don’t have any supporting evidence and the numbers are incorrect.
There is no difference in cost of HMRC arranging tribunal and contractor arranging it, it seems that if HMRC could win it now – everyone would have their appeals closed. HMRC is making aggressive changes to make legislation work for them and accumulating interest fees.
At least this point of view makes common sense for me, but I must admit that I am somehow afraid to make appeal myself despite having relatively small number on my tax demand.

Remember that even if you paid the figure on the assessment, remember that it is only that, an assessment. There is nothing at all to say that HMRC would then confirm that the tax year in question was settled. They would be fully entitled to ask you for more and more if they thought that they could.

The key thing to remember here is that these letter are all assessments. If HMRC could actually prove that you owed them a penny then they would be tax demands with 28 days to pay.

Most people appealed on that basis of the letter being an assessment and not an actual. HMRC are now slightly stumped on that one as in most cases they have absolutely no idea at all what an actual figure would be, so you're under no legal obligation to pay it.

Imagine if your mortgage company sent you an estimate and asked you to pay it, you'd tell them where to go........so the same happens here with HMRC. Until they can give me a pounds and pence figure which any accountant can verify to be accurate, then I wouldn't pay them a penny.

As for HMRC not requiring any further investigation even if the firgures are wrong, that is in fact incorrect. HMRC for all their powers can't just pick numbers out of the air and demand you pay them (remember....assessment not demand). Remember that if it were to go to court HMRC would have to prove where their figures came from and exactly what they were based on, no judge is going to tell HMRC that a figure picked out of the air will be fine.

[vern19]

09/10/11

I have heard that letters will be sent questioning tax returns for periods 2009 / 2011 in October (next month).

[Reggie]

No I didn't get an 08-09 as I only was only a sanzar employee in 09.
On the back of this assessment is a demand for £20k which states must be paid by October.

I've also logged in to hm website and they've added the charges incl. Interest & fees to my account.

Next step will be to appeal using the standard wording fron earlier posts unless anyone has any further suggestions?

[MrO666]

I have heard that letters will be sent questioning tax returns for periods 2009 / 2011 in October (next month).

Where did you hear that from ? And if that's the case, why are certain people receiving them now and not all together.

I'm not disputing what you're saying, more asking the question.