HMRC enquiries for EBT schemes through SANZAR

[jbryce]

Yes, but Rangers is about a corporation (actually a group of linked companies) using an incorrect structure for an otherwise valid EBT. Your cases are about individuals taking a course of action that mirrors that of Boyle in its intent if not its execution.

I'm a long way from being an expert and I don't know if I'm right or wrong, but it's not me facing the problem. If you're going to challenge it, at least be very clear on what it is you're challenging. Fingers in ears won't help anyone.

You are a long way from being an expert as am I.

I don't have my fingers in my ears; this really/actually impacts me and I will let C&M manage it for now. I've also taken 'expert' advice which basically says:

• I am not obliged by the Boyle judgement to hand over a penny to HMRC. They can ask, but they can also wait.
• I should wait and see the outcome of new 'proposed' legislation.
• That many EBTs may well have been effective and, until a court says otherwise, my appeal remains open.

In the end I may well have a large tax bill to pay, but but I will not be paying a penny until the Sanzar scheme has been examined in a court. That is the proper forum for the decision as to the effectiveness or ineffectiveness of an individual's tax arrangements.

[vern19]

You are a long way from being an expert as am I.

I don't have my fingers in my ears; this really/actually impacts me and I will let C&M manage it for now. I've also taken 'expert' advice which basically says:

• I am not obliged by the Boyle judgement to hand over a penny to HMRC. They can ask, but they can also wait.
• I should wait and see the outcome of new 'proposed' legislation.
• That many EBTs may well have been effective and, until a court says otherwise, my appeal remains open.

In the end I may well have a large tax bill to pay, but but I will not be paying a penny until the Sanzar scheme has been examined in a court. That is the proper forum for the decision as to the effectiveness or ineffectiveness of an individual's tax arrangements.

Excellent post

[flamel]

You are a long way from being an expert as am I.

I don't have my fingers in my ears; this really/actually impacts me and I will let C&M manage it for now. I've also taken 'expert' advice which basically says:

• I am not obliged by the Boyle judgement to hand over a penny to HMRC. They can ask, but they can also wait.
• I should wait and see the outcome of new 'proposed' legislation.
• That many EBTs may well have been effective and, until a court says otherwise, my appeal remains open.

In the end I may well have a large tax bill to pay, but but I will not be paying a penny until the Sanzar scheme has been examined in a court. That is the proper forum for the decision as to the effectiveness or ineffectiveness of an individual's tax arrangements.

Hear hear - totally agree, very good advice!

[Not Losing Any Sleep]

I believe the interest is currently 3%pa.....although I could be wrong.

Like I said, are the figures what HMRC are saying you owe actually correct ? There's no point phoning them up and discussing payment options if the figures are totally wrong......unless they're wrong in your favour that is

There is also an interesting issue as to whether the claim is against the company (Rangers) or the individual. The Leeds FTT EBT was interesting in that HRMC was saying that the discounted loans were a benefit in kind because of their discount structure. So HMRC was recognising that the EBT loans were loans and not income. This is possible their fall-back position for some schemes.

HMRC is getting very good at playing the role of the playground bully and clearly it is getting to some people. Most of their FTT wins have been on schemes that are significantly different to the ones on this forum.

http://www.accountancyage.com/aa/opi...-not-justified

I can't see them getting away with their proposed legislation. Clearly the Rangers case will be one to watch and the devil will be in the detail. Even if HRMC win, there is a good chance that the decision will not help HMRC for the bulk of their EBT and other similar schemes.

[malvolio]

You are a long way from being an expert as am I.


I don't have my fingers in my ears; this really/actually impacts me and I will let C&M manage it for now. I've also taken 'expert' advice which basically says:

• I am not obliged by the Boyle judgement to hand over a penny to HMRC. They can ask, but they can also wait.
• I should wait and see the outcome of new 'proposed' legislation.
• That many EBTs may well have been effective and, until a court says otherwise, my appeal remains open.

In the end I may well have a large tax bill to pay, but but I will not be paying a penny until the Sanzar scheme has been examined in a court. That is the proper forum for the decision as to the effectiveness or ineffectiveness of an individual's tax arrangements.

Well I'm not arguing with that, it is entirely sensible. As I say, I'm merely a disinterested observer, albeit one who has been observing for several years now, so none of this sorry mess comes as much of a surprise. Don't shoot the messenger.

All I'm saying is that relying on Sanzar, or any other scheme, having it's day in court may not be an option, and also that the legality or otherwise of the underlying EBT arrangements may be irrelevant. Post Budget, you may well find that "Simon says..." is now the applicable rule and all I'm doing is highlighting the basis that HMRC will apply to all 65,000 cases.

By all means listen to your advisors, you'd be foolish not to do so. But also think about and understand the wider picture.

[jbryce]

Well I'm not arguing with that, it is entirely sensible. As I say, I'm merely a disinterested observer, albeit one who has been observing for several years now, so none of this sorry mess comes as much of a surprise. Don't shoot the messenger.

All I'm saying is that relying on Sanzar, or any other scheme, having it's day in court may not be an option, and also that the legality or otherwise of the underlying EBT arrangements may be irrelevant. Post Budget, you may well find that "Simon says..." is now the applicable rule and all I'm doing is highlighting the basis that HMRC will apply to all 65,000 cases.

By all means listen to your advisors, you'd be foolish not to do so. But also think about and understand the wider picture.

What wider picture? That HMRC is trying to totally change the rules to the point that they can rule on the legal validity of any tax planning arrangement on the basis of their own esoteric view of guilt by inference? If that happens then things may be difficult, however there are voices expressing concern at the new proposals. The retrospective nature is a moot point; the role of HMRC as the sole arbiter is just a step too far......

The advice I am getting takes into account the wider picture, and that advice is wait until the situation is clarified, in the meantime buy some tax certs if you want to avoid interest.

[malvolio]

What wider picture? That HMRC is trying to totally change the rules to the point that they can rule on the legal validity of any tax planning arrangement on the basis of their own esoteric view of guilt by inference? If that happens then things may be difficult, however there are voices expressing concern at the new proposals. The retrospective nature is a moot point; the role of HMRC as the sole arbiter is just a step too far......

Yes, precisely. There is a chance that will happen. Concerns are being rightly expressed, but there is a pretty large lobby saying that tax avoidance in all its forms needs to be sat on, and hard. Fiarness is not part of the debate.

The advice I am getting takes into account the wider picture, and that advice is wait until the situation is clarified, in the meantime buy some tax certs if you want to avoid interest.

OK, I'll make this point once more than shut up. The argument has moved on and the legality of the scheme you were using is no longer the main issue. A UK tax resident earning money in the UK and moving it away from the normal UK tax jurisdiction by some non-business related and arguably artificial means is what HMRC are basing their approach on, and that, post Boyle, has legal precedent. If you can prove the business need, then you can start to worry about the scheme you were using. But not before.

[DonkeyRhubarb]

OK, I'll make this point once more than shut up. The argument has moved on and the legality of the scheme you were using is no longer the main issue. A UK tax resident earning money in the UK and moving it away from the normal UK tax jurisdiction by some non-business related and arguably artificial means is what HMRC are basing their approach on, and that, post Boyle, has legal precedent. If you can prove the business need, then you can start to worry about the scheme you were using. But not before.

Contractor Helpdesk, who are acting for Sanzar, have alluded to similar here:

http://forums.contractoruk.com/hmrc-...ml#post1880612

[MrO666]

It does all seem to be going too now. To give HMRC the power to be judge, jury and executioner (which is what they are asking for), will make our tax system little better than those of some very dubious countries.

You can't help but think that some big business will not be impressed by HMRC's approach to this, as this would/will clearly outline to one and all (individuals as well as businesses) that if the law doesn't work in HMRC's favour, they will get it changed. No matter whether what you are doing is legal today, HMRC doesn't care, if they decided that they want to change something in years to come which will retro-affect you, then that's all ok in their eyes. How oh how is that going to be a good position for corporates to be in ?

Basically, HMRC are saying we will hang you now and worry about proving whether you actually did it later, that's it in a nutshell.

I suspect that HMRC are looking for ANY way around having to challenge these schemes in court, and I guess by them now looking for alternative approaches is only on par with what the scheme providers were doing years ago.

Tax avoidance in the guise that everyone on here knows it is dead. I have no doubt that schemes will continue to exist, but you have to be brave or foolish to use them, so HMRC has got what they wanted.

Now I suspect you'll just start seeing people look for more and more creative ways of maximisng ltd co percentages.

[jbryce]

Yes, precisely. There is a chance that will happen. Concerns are being rightly expressed, but there is a pretty large lobby saying that tax avoidance in all its forms needs to be sat on, and hard. Fiarness is not part of the debate.


OK, I'll make this point once more than shut up. The argument has moved on and the legality of the scheme you were using is no longer the main issue. A UK tax resident earning money in the UK and moving it away from the normal UK tax jurisdiction by some non-business related and arguably artificial means is what HMRC are basing their approach on, and that, post Boyle, has legal precedent. If you can prove the business need, then you can start to worry about the scheme you were using. But not before.

Do you really, really promise to shut up? I really do see your point. Look, the Boyle case does not mandate/oblige or otherwise force me to pay a penny to the Tax Man. As it stands right now it has to go to court and be judged on its merits; who knows perhaps the Sanzar scheme had this covered. Boyle was a pretty poor implementation - my accountant (non IoM and not an EBT fan) was astounded that it even got as far as the FTT.

As for the new legislation - retrospective taxation is all the rage and defensible - to a point; but the powers HMRC want may well be a step too far. We'll have to wait and see.