HMRC enquiries for EBT schemes through SANZAR

[creativity]

I would worry about finding your contract and loan agreement with Sanzar. My understanding is that HMRC are challenging this scheme because the employment contracts have clauses that mentions the loan agreements. HMRC challenge is that the loan payments form part of your renumeration of employment and are subject to PAYE/NIC.

Hi Porker,

No mention of loans in the contracts post feb 2011, just trying to dig out one for 2010 & 2009, although from memory there was no mention of loans.

Anyone have a copy to check?

Did you here this from Cobham? I would be very surprised if loans and remuneration are mentioned in the same breath so-to-speak... Not discounting it though!

[MrO666]

So here's a question.....

Let's just say HMRC does win the argument, surely at that point they would need to legally dissolve the individual of any requirement to repay the loan. They can't treat it as income but then also leave the requirement there for it to be repaid, as by doing so it means that they would be agreeing that the money was in fact a loan.......that's an interesting one.

Also, by beginning to repay any loans it would surely also put HMRC in a difficult quandary, as if you are repaying it then it clearly is a loan.

There is no law in this land that can reclassify a loan as income, should the government and HMRC wish to do that then they need to start rewriting the law.

[porrker]

Disguised Renumeration

So here's a question.....

Let's just say HMRC does win the argument, surely at that point they would need to legally dissolve the individual of any requirement to repay the loan. They can't treat it as income but then also leave the requirement there for it to be repaid, as by doing so it means that they would be agreeing that the money was in fact a loan.......that's an interesting one.

Also, by beginning to repay any loans it would surely also put HMRC in a difficult quandary, as if you are repaying it then it clearly is a loan.

There is no law in this land that can reclassify a loan as income, should the government and HMRC wish to do that then they need to start rewriting the law.

I don't wish to appear negative but you need to read up on the disguised renumeration legislation within the finance act. Having reference in an employment contract to the loans, regular payments of loans close to the contract value, and the DOTAS reference all don't help the argument that in fact scheme users fall into disguised renumeration.

If you don't have reference in the contract to the loans this will certainly help your defence.

[MrO666]

In spite of all of this there is still the legal argument of whether HMRC are even entitled to send these 'discovery' assessments, which argument is deeply divided upon.

We all know that HMRC are saying that they don't actually need to discover a single thing in order to open a discovery assessment, all they need to be able to do is to PROVE is that if a different case officer were to look at your tax return, then that individual could reasonably argue that he has a totally different view of what it contains, and hence would have come to a different conclusion regarding the need for any original Self Assessment enquiry.

Well that's a strong argument from both sides really. HMRC need to stand in front of a judge and say even though your self assessment contained a DOTAS number, and in the white space CLEARLY stated that you were using a tax avoidance scheme, that in-spite of all those facts they saw absolutely no reason at all to believe that tax may have been avoided and hence worthy of further investigation. They need to then argue that another tax official has now looked at that same return, and that they have come to en entirely different conclusion based upon identical facts.......that is what HMRC have to do in order to argue that these discovery assessments are legal. That's not me surmising, that is the legal standpoint as set out in the HMRC v Dr M Charlton case (which HMRC lost).

In a nutshell, HMRC have to categorically prove that it's entirely reasonable for two educated employees of HMRC to look at the same return, and for them to come to different conclusions regarding whether it requires further investigation.

[vern19]

09-10

I have heard from a fellow target of HMRC that they have started updating online self assessment accounts with a calculation based on tax owed for the 2009 - 2010 year. There is no breakdown and reports are this figure is simply added to any other outstanding figures from earlier years

[MrO666]

I have heard from a fellow target of HMRC that they have started updating online self assessment accounts with a calculation based on tax owed for the 2009 - 2010 year. There is no breakdown and reports are this figure is simply added to any other outstanding figures from earlier years

I'm not sure what're you actually mean ?

HMRC can't just add money owed to your online statement without notifying you in writing (usually by way of an assessment).

Is that what you're saying ?

[Old Kent Road]

Hi Porker,

No mention of loans in the contracts post feb 2011, just trying to dig out one for 2010 & 2009, although from memory there was no mention of loans.

Anyone have a copy to check?

Did you here this from Cobham? I would be very surprised if loans and remuneration are mentioned in the same breath so-to-speak... Not discounting it though!

My 08/09 employment contract has no mention of loans. The employment was with a company and the loans were from a trust, so they would be separate. Pretty sure 09/10 was the same.

[vern19]

I'm not sure what're you actually mean ?

HMRC can't just add money owed to your online statement without notifying you in writing (usually by way of an assessment).

Is that what you're saying ?

Apparently they have. Maybe letters are in the post.

[MrO666]

Letters would HAVE to be in the post, it's clearly illegal to start demanding money from somebody without any explanation as to what it's for.

HMRC are sneaky and unscrupulous that's for sure, but even they have limits.

[danewiig]

Hi could someone please PM the templates as i have received a letter for 2010-2011.

Cheers.

<admin note - pm access granted />

Hi all... also received assessment notices for 09/10 and 10/11 for Sanzar, thankfully only with them about 9 months in total. Could someone also PM me the templates for the appeal? Thx!