HMRC enquiries for EBT schemes through SANZAR

[DonkeyRhubarb]

Under the DOTAS proposal

Ultimately HMRC will want their money...

HMRC want the money now without proving anything.

[MrO666]

Under those proposals HMRC will need to prove that any follower notices issued in relation to scheme usage, can be directly linked in working to a case that they've already won. As it stands, HMRC have not won any EBT cases that can be directly likened (in fact not conjecture) to various schemes which users of these forums may (or may not) have used.

At present there has been no definitive answer given regarding who would be responsible for stating that two schemes were alike enough to warrant a follower notice. I find it fairly unlikely that HMRC themselves would be given this responsibility, as that's clearly a conflict of interest, and if left up to HMRC every man and his dog would get a notice, whether remotely relevant or not.

So in short and as I understand it (and as how it's been explained to me by a tax professional), even if HMRC do get this power, it does not mean that on day one they can issue all people with appeals follower notices. They will need to clearly state in any communications exactly which case they are 'claiming' your scheme mirrored, and at present, there isn't one......and the Rangers case is quite clearly NOT similar in working to a majority of these schemes.

Obviously that's not to say there won't be one in time, but as of right now, there isn't (from what I understand).

I appreciate that my comments only relate to EBT schemes, I don't have any knowledge of any other schemes which were in use over the years.

[Dylan]

I understand that if it has a DOTAS number they can demand payment.

[lfcynwa]

I understand that if it has a DOTAS number they can demand payment.

I heard that to but what about other schemes that are not DOTAS registered?

[MrO666]

The existence of a DOTAS number in no way says that any two schemes were alike. Remember we only really see/hear about schemes that were promoted towards contractors etc, however there are many other types of DOTAS registered schemes out there, and even to this day more are being registered (not sure I'd be trusting them though).

In short, the answer is no, just because a scheme was registered under DOTAS, I fail to see how HMRC could use that as their one and only reason to issue any form of follower notice.

There needs to be factual evidence for HMRC to able to say say look, a case we have won had these hallmarks......and look, the scheme you used also has the same hallmarks.

[MrO666]

I heard that to but what about other schemes that are not DOTAS registered?

I would be VERY cautious about what you're saying and what you may reveal on a PUBLIC forum

However, to answer your question, IF HMRC investigate a non DOTAS registered scheme and feel that they have sufficient grounds of proving it was clearly only ever created to avoid tax (whether legally or not), then yes they would have the power to issue notices.

However, seeing as most schemes during the periods in question were registered, I'm sure HMRC are busy enough at the moment going for the 'easy money'

[Dylan]

The existence of a DOTAS number in no way says that any two schemes were alike. Remember we only really see/hear about schemes that were promoted towards contractors etc, however there are many other types of DOTAS registered schemes out there, and even to this day more are being registered (not sure I'd be trusting them though).

In short, the answer is no, just because a scheme was registered under DOTAS, I fail to see how HMRC could use that as their one and only reason to issue any form of follower notice.

There needs to be factual evidence for HMRC to able to say say look, a case we have won had these hallmarks......and look, the scheme you used also has the same hallmarks.

I read section 4 as extending payment notices to those in DOTAS schemes regardless.

[MrO666]

I read section 4 as extending payment notices to those in DOTAS schemes regardless.

Well according to my tax advisor, no that's not the case. They MUST be able to show that schemes had enough similar hallmarks for it to be reasonably assumed that if HMRC had won against one of them, then they would win against the one in question too.

Just because there is a DOTAS number does not mean HMRC will be able to issue a follower notice. Of course that's not to say they won't try, as we all know that HMRC operate within their own law.

However, if I get one, then I will be asking for FULL details of the scheme which they have won and which they have linked my follower notice to.....and i'm sure this is a basic legal requirement which they will have to adhere to.

The sad thing is we know that IF HMRC get this money, they will sit on these cases for years in the hope that the users will more or less drop the issue.....I suspect that's their plan.

[Dylan]

Given section 4 talks about extending payment notices beyond follower notices I'm erring on the side of caution, I read it that they can issue a payment notice to DOTAS schemes without a follower notice.

Have another read and see what you think.

"The application of accelerated payment to ‘follower notice’ cases, where the
underlying legal principle has been addressed by the court or tribunal, goes some
way towards rebalancing the economics of entering into avoidance schemes by
requiring some users to pay up front, but it does not go far enough. Therefore, as
announced at Autumn Statement, the Government wants to consult on widening
the criteria by which taxpayers are required to pay disputed tax earlier in the
process."

"The proposal is that payment of the disputed tax may be required from:

• Anyone who has entered a DOTAS SRN on their tax return or otherwise
notified HMRC of the SRN; or
• Whose details feature on a DOTAS ‘client list’; or
• Who should have entered a SRN, or should have appeared on a ‘client list’ but
have not done so – either because the scheme was not disclosed as it should
have been, or the taxpayer has not entered the SRN when they should have
done so. "

[MrO666]

Given section 4 talks about extending payment notices beyond follower notices I'm erring on the side of caution, I read it that they can issue a payment notice to DOTAS schemes without a follower notice.

Have another read and see what you think.

"The application of accelerated payment to ‘follower notice’ cases, where the
underlying legal principle has been addressed by the court or tribunal, goes some
way towards rebalancing the economics of entering into avoidance schemes by
requiring some users to pay up front, but it does not go far enough. Therefore, as
announced at Autumn Statement, the Government wants to consult on widening
the criteria by which taxpayers are required to pay disputed tax earlier in the
process."

"The proposal is that payment of the disputed tax may be required from:

• Anyone who has entered a DOTAS SRN on their tax return or otherwise
notified HMRC of the SRN; or
• Whose details feature on a DOTAS ‘client list’; or
• Who should have entered a SRN, or should have appeared on a ‘client list’ but
have not done so – either because the scheme was not disclosed as it should
have been, or the taxpayer has not entered the SRN when they should have
done so. "

I agree that's certainly how it sounds, however remember it still needs to get through parliament etc. I will certainly get some advice on this though, so apologies if I'm wrong.

On a separate note, people in receipt of 09-10 and 10-11 Discovery Assessments.............are anybody's figures actually correct ?