HMRC enquiries for EBT schemes through SANZAR

[eek]

So all these people who have moved on and accepted defeat, what scheme/vehicle are you using know ? It seems most of us went down the TA route due to the introduction of IR35 and with that still being very much active, the only option is full PAYE via umbrella or LTD using the 5% expense ruling. Is this really what people are now doing ?

or change your business practices to not fall under IR35....

[MrO666]

However much I'd like to get it over with, it's a grim choice - go bankrupt now and face homelessness, disruption of kids education, grieving wife and not being able to work - or toughing it out and hoping for a settlement that I could possibly pay by, say, remortgaging the house

I appreciate the situation you're in. I think ultimately it comes down to whether you yourself feel this will go away or whether HMRC will win the battle.

If you think it's the later, then at the very least I'd be trying to save like mad now (or throwing money into Tax Deposits), so if it does happen at least then you've got something to offer as a deposit so to speak......then work out an agreement to pay the rest.

[regron]

or change your business practices to not fall under IR35....

Yep, something I am actively trying to do.

[horrada]

"We've all done quite well out of the 'entirely legal' process, and we've all enjoyed spending the fruits of that.......so whilst I am on the HMRC hit list like many others, I fairly pragmatic about it all now (I wasn't in the first instance), and think if it's time to pay the fiddler then so be it."


Sorry but we've done quite well!! If Im being asked to pay PAYE, interest,no expenses claimed, no pension, paid scheme fees and Im doing quite well?

Im now being asked to pay tax twice and even more.

example

LTD
£80,000 Turnover
expenses £10,000
PAYE 2 * 7500

corporation tax 20% of £55,000 = £11,000

£44,000/2 dividends

Tax paid £11,000

Scheme 15% of £80,000 = £12,000 (including tax)
tax 30% of £68,000 = £20,400
Interest 3% * 5 years £700*5 £3500

Total to PAY including scheme fees £35,900

Now will be out of pocket £24,900 'entirely legal' process

Nothing to do with IR35, tax avoidance but an simple solution without no hassle.

[MrO666]

"We've all done quite well out of the 'entirely legal' process, and we've all enjoyed spending the fruits of that.......so whilst I am on the HMRC hit list like many others, I fairly pragmatic about it all now (I wasn't in the first instance), and think if it's time to pay the fiddler then so be it."


Sorry but we've done quite well!! If Im being asked to pay PAYE, interest,no expenses claimed, no pension, paid scheme fees and Im doing quite well?

Im now being asked to pay tax twice and even more.

example

LTD
£80,000 Turnover
expenses £10,000
PAYE 2 * 7500

corporation tax 20% of £55,000 = £11,000

£44,000/2 dividends

Tax paid £11,000

Scheme 15% of £80,000 = £12,000 (including tax)
tax 30% of £68,000 = £20,400
Interest 3% * 5 years £700*5 £3500

Total to PAY including scheme fees £35,900

Now will be out of pocket £24,900 'entirely legal' process

Nothing to do with IR35, tax avoidance but an simple solution without no hassle.

I'm sorry, but ANYBODY who used these schemes (and that's me included) who didn't think that there was always a slightly grey angle to them must be truly deluded.

I agree it's entirely unfair what HMRC are trying to do, but equally I'm not going to cry about it. You knew what you were doing (or certainly should have done) so now that there's a possibility that it's going wrong, everybody starts to cry foul.

Too many people today won't take any responsibility for their actions. When push comes to shove, I made a decision to use a scheme, if it backfires, then I have to sort it out. Nobody forced me to do it.

As for your maths above, if you're genuinely trying to say that as a limited company you would have paid a total of £11k in tax......then why the hell did you go down the Sanzar route and pay them £12k in fees.......now that truly is crazy !

[horrada]

I'm sorry, but ANYBODY who used these schemes (and that's me included) who didn't think that there was always a slightly grey angle to them must be truly deluded.

I agree it's entirely unfair what HMRC are trying to do, but equally I'm not going to cry about it. You knew what you were doing (or certainly should have done) so now that there's a possibility that it's going wrong, everybody starts to cry foul.

Too many people today won't take any responsibility for their actions. When push comes to shove, I made a decision to use a scheme, if it backfires, then I have to sort it out. Nobody forced me to do it.

As for your maths above, if you're genuinely trying to say that as a limited company you would have paid a total of £11k in tax......then why the hell did you go down the Sanzar route and pay them £12k in fees.......now that truly is crazy !

Yes it is crazy, hence the point of nothing to do with joining on the basis of IR35 and tax avoidance but an simple solution without admin. Should of would of, I think the word hindsight we are looking for.
Why are not and why did not HMRC hound these companies years ago, thats what gets my backup and now they are acting over 10 years too late and of course the potential bankruptcy looming!!

[MrO666]

Yes it is crazy, hence the point of nothing to do with joining on the basis of IR35 and tax avoidance but an simple solution without admin. Should of would of, I think the word hindsight we are looking for.
Why are not and why did not HMRC hound these companies years ago, thats what gets my backup and now they are acting over 10 years too late and of course the potential bankruptcy looming!!

Agreed, hindsight is a wonderful thing, and as for HMRC not doing something about these schemes years ago, we all agree on that.......but they didn't, and this is where we are.

Come on, anybody who thought keeping upwards of 85% of invoice value with virtually zero paperwork or true understanding of how that was being achieved must have been very blinkered. If it was that squeaky clean and above board, then every man and his dog would have been doing it.

It sounds like I'm trying to tell people it's all their fault etc, and i'm not. What I am trying to say though, as that we all went into these things with our eyes open (or should have done), so if it does end up going wrong, then there's nobody to blame but ourselves.

I accept that I was influenced by the big take home and no paperwork, but in the back of my mind I always knew this could be disputed one day......and it has been. Doesn't mean HMRC are right at all, but it does mean a long and drawn out process for those on the hit list.

Sad but true.

[DotasScandal]

"We've all done quite well out of the 'entirely legal' process, and we've all enjoyed spending the fruits of that.......so whilst I am on the HMRC hit list like many others, I fairly pragmatic about it all now (I wasn't in the first instance), and think if it's time to pay the fiddler then so be it."


Sorry but we've done quite well!! If Im being asked to pay PAYE, interest,no expenses claimed, no pension, paid scheme fees and Im doing quite well?

Im now being asked to pay tax twice and even more.

example

LTD
£80,000 Turnover
expenses £10,000
PAYE 2 * 7500

corporation tax 20% of £55,000 = £11,000

£44,000/2 dividends

Tax paid £11,000

Scheme 15% of £80,000 = £12,000 (including tax)
tax 30% of £68,000 = £20,400
Interest 3% * 5 years £700*5 £3500

Total to PAY including scheme fees £35,900

Now will be out of pocket £24,900 'entirely legal' process

Nothing to do with IR35, tax avoidance but an simple solution without no hassle.

That's a story you might want to tell your MP (but be quick)
http://tinyurl.com/pzbkfqv

Don't, and all they will know is David Gauke's rhetoric that you are just a filthy "tax dodger" on a 250 000 pounds income...

www.dotas-scandal.org

[MrO666]

[QUOTE=horrada;1945649

"I'm now being asked to pay tax twice and even more."



Not sure how you work that out.....the money deducted from you would have been 99% scheme fees, so you can't be made to pay tax twice, as you haven't paid it in the first instance yet !

Without a doubt you would end up worse off than had you just been limited from day one, but that's the same as all of us.

I understand your frustration, but i'm not sure you understand exactly what you were paying for when you were in a scheme........it wasn't tax, trust me.

[jbryce]

Easier ride......

I have it on authority that by working with HMRC now, you'll get a much easier ride than waiting for them to come looking for you.

In what sense? They're not going to cut you any slack on the amounts they think you owe.