Edge EBT thread

[Bronco Billy]

Redstone

Just as an aside.....

would I be correct in thinking that the entire personnel at Redstone consists (give or take) of the entire personnel who were previously at Edge ? ie - Not just Michelle Booth.

An introductory email I received from Redstone in February 2013 indicated that it was merely a "re-branding", the reason being as follows:-

"There are many reason behind the re-branding however the most pertinent is remain as compliant as we can which has in turn made changes to the way we operate."

This must fill the current users of the Redstone scheme with confidence ! (I know I would be, anyway !)

[K12AN]

Conversation with HMRC

Ok - so I called the number on my notices to discuss the amounts etc and the CTD options

The lady I spoke to was quite helpful and told me that the figures that are on the notices are based on what they think is owed.
It was suggested that I appeal and then send in any information (bank statements etc) to prove that they are incorrect - this will help them to find a more accurate figure for the amounts which are being disputed.

When I informed her that my tax code was adjusted in order to take into account the tax on the loans - she said that I should also include this in the information I send over. This would help me and the HMRC to arrive at a more realistic sum which is to be disputed/appealed.


Also, by paying a sum into the CTD - it in no way implies admission...it simply prevents interest charges mounting up. The money in this account can be withdrawn/adjusted at any time.

So, here is what I'm going to do:

1. Send my appeal letter for the years in question
2. Pay the amounts requested into the CTD
3. Get an accountant to help me gather the necessary information to send to HMRC and arrive at a realistic dispute figure
4. Withdraw the difference between my figures and the HMRC figures from the CTD

[CanPayButWouldRatherNot]

ctd or overpay mortgage

we had the discussion about CTD merits on the BN66 page a few times

Depends on how long it runs for .. to me I can overpay my flexible mortgage and use the compound interest to help me more than a CTD (interest penalty is simple interest)..

Over the long run (been discussing this for 5 years now) ... think overpaying is a better solution (assuming you dont spend it on something else !)

[CDJ]

So, here is what I'm going to do:

1. Send my appeal letter for the years in question
2. Pay the amounts requested into the CTD
3. Get an accountant to help me gather the necessary information to send to HMRC and arrive at a realistic dispute figure
4. Withdraw the difference between my figures and the HMRC figures from the CTD

K12AN - it is not my place to tell you how to proceed. This is your call, but as an aside..

- Your loan amounts were (or should have been) completely and umambiguously declared on your annual P11D - This is all the info that HMRC require and to ask otherwise is erroneous. By all means resend of the P11D forms to them, but I imagine any advisor will tell you to leave it at that.
- a CTD is not the only solution.. think of it this way.. you have £1000 debt. Lets say it takes 4 years to resolve this amount.. so the total owed is £1000 + (£1000 x 1.03 x 4 - its simple interest remember) ie. £1120.
Now if you lodge a CTD this reduces to £1000, saving you £120. So far so good..
On the flip side, lets say you invest that £1000 in say the capital of your mortgage or a broad-based equity fund (eg MSCI World Equity Index). Lets say, conservatively, your investment returns 5% compound return per annum. After 4 years you'd receive $1215 - so even with the interest charge your are to the better of almost £100.. Obviously, if the interest rate that HMRC charges goes up (in years past it has been as high as 8%), then this equation changes, but the point remains. By all means put the money aside, but a sound investment strategy will trump a CTD, if the HMRC rate does start to climb, then re-evaluate, but look at it as an investment that pays 3%

Hope that helps and best of luck in whatever you decide

[Montyb]

....and for the avoidance of doubt, don't type 'Best of luck' at the bottom of your appeal!

I was in two minds to put that or not :-)


I have just spoken to a very nice lady who works for the HMRC ( no honestly, really nice and helpful) regarding the CTD Scheme as I wanted to clarify a few points,

1. I'm not admitting liability by joining this scheme

2. I can cash out if want to

3. Interest will IN EFFECT stop being charged from when they receive the funds and issue you the certificate

HOWEVER , what she did say is that they don't interact with the case worker that is looking after your individual assessment , so as far as the case worker is concerned you will still be accruing interest, but on the outcome of the case, should it be that the HMRC prevail, this part of the interest ( from receiving your CTD funds till the end of the appeal) will be taken off when you commit the funds to the tax owed at that point.



Best of luck

[K12AN]

Thanks all...definitely somehting to think about

[K12AN]

Although Edge was set up uniquely to other EBT schemes...are there any other providers who were very similar to Edge and are there any decisions coming up which we should we looking out for?

The fact that our loans were declared to the HMRC and we paid tax on these loans contradicts the HMRCs view that these should be classified as income. Did other EBT providers all declare their loans on their P11D forms too?

Shouldn't the HMRC then be taking action against everyone who has received a loan from their employer...for Season travel tickets (travelcards) etc...these can be several thousands of pounds!

[malvolio]

Although Edge was set up uniquely to other EBT schemes...are there any other providers who were very similar to Edge and are there any decisions coming up which we should we looking out for?

Only works if the appeal results in case law, which won't happen with a first tier anyway. However I rather doubt it.

The fact that our loans were declared to the HMRC and we paid tax on these loans contradicts the HMRCs view that these should be classified as income. Did other EBT providers all declare their loans on their P11D forms too?

Tax on the loan, tax on the interest for the loan, or tax on the use of the loan?

Shouldn't the HMRC then be taking action against everyone who has received a loan from their employer...for Season travel tickets (travelcards) etc...these can be several thousands of pounds!

Sigh...

[FHP143]

Although Edge was set up uniquely to other EBT schemes...are there any other providers who were very similar to Edge and are there any decisions coming up which we should we looking out for?

Edge's EBT was not unique.....it was exactly the same as most conventional EBTs, it was operated properly but it's the same as all the others

The fact that our loans were declared to the HMRC and we paid tax on these loans contradicts the HMRCs view that these should be classified as income. Did other EBT providers all declare their loans on their P11D forms too?

Yes.....those registered with HMRC under DOTAS (which all EBT operators were meant to be) had to declare the loans under P11D. Incidentally, it's not just Edge contractors who have had demands, it's across the board. Other scheme operators like Sanzar, AML etc have all had letters too!

Shouldn't the HMRC then be taking action against everyone who has received a loan from their employer...for Season travel tickets (travelcards) etc...these can be several thousands of pounds!

An EBT is not just a loan from your employer. In fact it isn't a loan form your employer! It's a loan from a trust

[Tweedle]

As mentioned before by both myself and COJAK, it really is advisable to use my simple appeal letter template.

The below is a direct quote from a tax barristers website.
Are you saying this is incorrect and you can appeal with no grounds?
Is so, I'll strike these from the list of possibles!
If not, the short appeal letter is not a valid appeal....

"Notice of appeal
If you decide to appeal, that must be done by notice in writing. The notice must be given to HMRC within 30 days. Furthermore, the First-tier Tribunal have recently held that is not enough to merely say that you wish to appeal a conclusion of HMRC, for a notice of appeal to be valid you must also set out the grounds upon which you wish to appeal the decision."