HMRC enquiries for EBT schemes through SANZAR

[OnYourBikeGB]

Firstly, genuine condolences to those of you for whom this will have a potentially life changing impact. I am in the "fortunate" position of only being in an EBT scheme (not Sanzar) for a few months, in the 09/10 tax year, with a total loan amount of approximately £30,000, so I believe my exposure is limited to a manageable figure. However I am about to take on a new mortgage and will need every spare penny for stamp duty etc. Would any of you more informed than I give me a confirmation that I am likely to be affected by the impending demands for payment (I received and responded to an opening of enquiry letter and request for details of loan amounts letter in December 2012), and help me with a rough calculation on how much is owed? Is it just income tax on 30,000 plus interest, or are there likely to be penalties too?

We had a discussion on the S58 thread about interest payment, and we came to the conclusion that interest would not be payable at this stage. The consultation documents examples say that will happen when the liability is proven. See sections 3.30 - 3.32 of the consultation document. Interest will stop accumulating when the demand is paid. Interest comes when the dispute is settled. I guess what they are hoping for is that people won't be able to afford to go to court now they have hit them in the pocket, otherwise it it makes a nonsense of clearing the court backlog. If you are in the fortunate position of having a scheme provider that is prepared to fight on, you may have some time yet.

[meanttobeworking]

If you are in the fortunate position of having a scheme provider that is prepared to fight on, you may have some time yet.

I think they're so busy preparing, they haven't got time to pick up the phone or reply to emails

[MrO666]

Been hit this morning with a 10-11 assessment (well in my online account, haven't had a letter yet). What is strange about this one, is that on my online account at least, they've already added the interest due...........I can't remember that in previous years.

Is it just me, or does anyone else think HMRC have held onto these until the day after the budget, just to try to frighten people into paying up.

Also, it's again wildly inaccurate......they really are a bunch of f@@king idiots.

[davieloco]

So, with the Budget cat now out of the sack, what is your advice assuming I have two currently outstanding/ appealed DAs totalling at sizeable amount. I haven't got the cash in the bank to cover them - and likely won't have the cash by summer this year either.

Would I need to:
1) Move ask quickly as possible off DOTAS and become a limited company contractor - ideally before beginning of the new tax year (with the awareness that there may be more DAs coming through the letter box)?
Or do I need to find a "proper" perm job, i.e. having to give up being a freelancer altogether?

2) Start scrimping and scraping to collect the money on the side if and when the acceleration notes come through the door? But there won't be enough by summer even to paying just 25% of it off.

3) Be prepared to fight and initiate personal bankruptcy proceedings?

I.e. could they push me into personal bankruptcy for debt that I do not owe. Baring in mind if they did that, and I won the case later, I would get the money back + interest, and would consider suing for compensation, distress caused, loss of property/equity and loss of future income (I wouldn't be able to get any more work in my sector in case of a personal bankruptcy)? And breach of human rights as other commentators/law firms have commented already.


4) Expect that they will only take what's in the bank account and leave £5,000 - which doesn't leave them too much to take anyway.

5) Do nothing and assume that this will all blow over and will be challenged further before it makes it's way into the Finance bill?

What other practical solutions are there? What are others thoughts?
Many thanks for your help - any comments/feedback are much appreciated.

Brilliant forum and comments/thoughts btw. Helps knowing I'm not on my own in the deep end...

Hi Deaddotas,

You sum up the possible options succinctly, I have also been looking at what the next course of action should be as I do not want to make a mistake that could prejudice my position. Ultimately I cannot afford to pay back all the tax that they think I owe unless they give me 10 years to do it.

I know that some people are looking at IVAs and bankruptcy but would like you would appreciate any comments/feedback on what you have written.

Maybe as we now seem to be getting to the business end of some of this it may be worthwhile starting up another thread.

DL

[LandRover]

Been hit this morning with a 10-11 assessment (well in my online account, haven't had a letter yet). What is strange about this one, is that on my online account at least, they've already added the interest due...........I can't remember that in previous years.

Is it just me, or does anyone else think HMRC have held onto these until the day after the budget, just to try to frighten people into paying up.

Also, it's again wildly inaccurate......they really are a bunch of f@@king idiots.

I too have assessment received in post for 2009/10. And it appears when I called my ex-scheme provider that many more had too.

So it looks like the envelops were ready and sent yesterday on mass.

[MrO666]

I too have assessment received in post for 2009/10. And it appears when I called my ex-scheme provider that many more had too.

So it looks like the envelops were ready and sent yesterday on mass.

I certainly don't think it's a coincidence that everyone is getting these the day after the budget, maximum impact I guess.

I done all my stressing about it all a year ago when I got the first one, not worried now, I'll deal with it if I have to, then move on. Not going to let it affect my life.

Remember, all this stuff about HMRC not willing to take payments etc, it's just not how it's going to work. The situation is totally unprecedented, i'm sure there will be provisions created for people with large liabilities and arrangements to pay. As I keep saying, whether they like it or not, they'd rather the whole balance over a few years, than sweet FA right now if they try and bankrupt you.

In the works of seasick steve.........you can't take, what I ain't got

[jbryce]

I too have assessment received in post for 2009/10. And it appears when I called my ex-scheme provider that many more had too.

So it looks like the envelops were ready and sent yesterday on mass.

Do the numbers include interest and late payment penalties.

HMRC are bullying us. At the moment we aren't obliged to pay 'em a penny.

[MrO666]

I too have assessment received in post for 2009/10. And it appears when I called my ex-scheme provider that many more had too.

So it looks like the envelops were ready and sent yesterday on mass.

Is your assessment even close to being accurate ?

[flamel]

I certainly don't think it's a coincidence that everyone is getting these the day after the budget, maximum impact I guess.

I done all my stressing about it all a year ago when I got the first one, not worried now, I'll deal with it if I have to, then move on. Not going to let it affect my life.

Remember, all this stuff about HMRC not willing to take payments etc, it's just not how it's going to work. The situation is totally unprecedented, i'm sure there will be provisions created for people with large liabilities and arrangements to pay. As I keep saying, whether they like it or not, they'd rather the whole balance over a few years, than sweet FA right now if they try and bankrupt you.

In the works of seasick steve.........you can't take, what I ain't got

I agree with this
My (new) wife, the ltd company I now operate through and myself are three different legal entities - therefore they can only take ME for everything I've got which is not a lot (after a divorce).
Everything is paid for, including this year's holidays and next year's alimony payments. There's no point hanging onto more than £5k as they'll rob you directly through your bank.
I'll either be forced to take out a loan and pay them up to the value of my assets or they'll bankrupt me and get 20% less.
Knowing their gangster tactics, I'm thinking that they will outsource debt collection to limit negotiating. If and when I'm bankrupted I'll have a year off work, go to college and draw benefits. I'm almost looking forward to it.
On planet earth they'll have to make settlements and give people time to pay what they can according to their means.
It's never that bad - move to France, buy a fishing rod and have a nice life.
In the meantime have a cigar (and a bottle of Bollinger) it might be the last for a while. Bring it on so I can move on.

As you say, they can't take what I ain't got....

[LandRover]

Do the numbers include interest and late payment penalties.

HMRC are bullying us. At the moment we aren't obliged to pay 'em a penny.

Yes interest included.

There is a sense of spitefulness in HMRC actions. The likes of the big corps can hide behind realms of lawyers....the Starbucks etc etc

There is a myth that we are unscrupulous tax dodgers when in reality many of us were kind of sold into these schemes.

I elected to enter into a scheme from advice from an accountant, who was obviously geting a commission, however it was sold to me as being totally out of IR35 and a few years ago I was more stressed about that than anything else. Also the fact that all the administration was done for me was another factor. But hey ho, obviously lessons learnt and all that