Edge EBT thread

[DonkeyRhubarb]

Thanks for that info but with no pun intended and appreciate your concern but even if bigdug's posting IP is from the moon. His point of view as he explained it makes perfect sense regardless of where he is posting from.

I'm sure cojak issued the warning with good reason.

The only cloudy part is weather test case will cover all or will each be required to contest individually. If HMRC chooses to contest individually with almost 20,000 of us the Tribunal court will be busy and stretched till eternity even at rate of one case a week. So I don't think that is really feasible.

That will never happen. A handful of users per scheme at most.

[cerner]

But what happens if HMRC (deliberately, randomly or otherwise) chose a users who aren't members of the group? We would be 25 out of over 1000 Edge users? Its also likely that the test users aren't even part of this forum and have no idea about our group. In my mind, it would make sense for them to chose users who have the largest liabilities i.e. who have been using for multiple years - probably into the early 2000's.
If the test case for Edge were to lose, would our group still stand a chance if we were to appeal etc? Would there be any point after an Edge user were to lose?

Looks like If HMRC decide to pick a taxpayer caught in Edge EBT with a weak defence and if it becomes clear that it's going to be a test case fits all scenario then our response will be to contribute a fighting fund at that stage to back his appeal so he has a greater chance of overturning the ruling in our favour at the appeal.

We can setup the group right now so it's fully populated with members etc.. but it will be premature for the group organisers to start asking group members to stump up cash at this stage.

I believe the group needs to exist as a sleeper cell for now and activated at a moment notice with funds collection initiated when the situation arises i.e when we need to defend the appeal of an Edge EBT member who has lost the test case to HMRC.

[bigdug]

The only cloudy part is weather test case will cover all or will each be required to contest individually. If HMRC chooses to contest individually with almost 20,000 of us the Tribunal court will be busy and stretched till eternity even at rate of one case a week. So I don't think that is really feasible.

I think this will be dealt with in next years Finance Bill. The following was announced on 5 December 2013:
"Follower Penalties: users of failed avoidance schemes - This measure will introduce a new obligation for users of an avoidance scheme that HMRC have defeated in a tribunal or court hearing in another party’s litigation, to concede their position to reflect that decision. When there has been a relevant decision HMRC will issue a notice to all users of the scheme in question requiring them to amend their return or advise HMRC why they believe they should not. A tax-geared penalty would be charged if they failed to amend their return and it was subsequently found that the avoidance scheme they used failed on the same point of law. Taxpayers will be able to appeal against the penalty.
Accelerated tax payment in avoidance cases - Legislation will be included in Finance Bill 2014 to require payment of the tax in dispute in a tax avoidance enquiry when an ‘avoidance follower penalty notice’ is issued. This will take effect from Royal Assent which is expected mid July 2014.
At present taxpayers (in most cases) can hold on to the disputed tax while the dispute is being investigated. This can take a number of years, and there is evidence that some taxpayers enter into avoidance schemes primarily for the cash flow benefit. "

[DonkeyRhubarb]

Looks like If HMRC decide to pick a taxpayer caught in Edge EBT with a weak defence and if it becomes clear that it's going to be a test case fits all scenario then our response will be to contribute a fighting fund at that stage to back his appeal so he has a greater chance of overturning the ruling in our favour at the appeal.

That would work in terms of funding representation at a tribunal.

However, in the mean time, it would leave you slightly exposed if HMRC start asking for stuff. At the moment, all you've had to do is lodge an appeal. What if they send out a list of detailed questions or request information?

They did this with us but Montpelier always drafted the replies for us.

[cerner]

However, in the mean time, it would leave you slightly exposed if HMRC start asking for stuff. At the moment, all you've had to do is lodge an appeal. What if they send out a list of detailed questions or request information?

I'm afraid at information request or evidence gathering stage, the lawyers can't do anything tangible here. This is where Edge should step in. The lawyers can't replace the responsibility of the loan provider at this stage.

If Edge won't show their face to support the evidence gathering stage and questions request information etc.. It will be asking too much of lawyers to step in and take the place of Edge. It will be a near impossible task of asking the lawyers to turn water into wine.

Like bigdug pointed out in all cases where the taxpayer have won against HMRC, the loan provider has not done a runner but instead fully supported the taxpayer in every way possible.

Hopefully Edge will feel guilty enough to support us somehow even if they don't want to show their faces. They might chose to support us via proxy i.e mystery poster bigdug posting from Isle of man.

[DonkeyRhubarb]

I'm afraid at information request or evidence gathering stage, the lawyers can't do anything tangible here. This is where Edge should step in. The lawyers can't replace the responsibility of the loan provider at this stage.

If Edge won't show their face to support the evidence gathering stage and questions request information etc.. It will be asking too much of lawyers to step in and take the place of Edge. It will be a near impossible task of asking the lawyers to turn water into wine.

Like bigdug pointed out in all cases where the taxpayer have won against HMRC, the loan provider has not done a runner but instead fully supported the taxpayer in every way possible.

Have a read of what Saleos said regarding responding to HMRC questions/requests for information.

http://forums.contractoruk.com/hmrc-...ml#post1858160

I'd rather rely on a tax advisor like him than a defunct outfit like Edge.

As for bigdud...

[DonkeyRhubarb]

They might chose to support us via proxy i.e mystery poster bigdug posting from Isle of man.

[cerner]

I think this will be dealt with in next years Finance Bill. The following was announced on 5 December 2013:
"Follower Penalties: users of failed avoidance schemes - This measure will introduce a new obligation for users of an avoidance scheme that HMRC have defeated in a tribunal or court hearing in another party’s litigation, to concede their position to reflect that decision. When there has been a relevant decision HMRC will issue a notice to all users of the scheme in question requiring them to amend their return or advise HMRC why they believe they should not. A tax-geared penalty would be charged if they failed to amend their return and it was subsequently found that the avoidance scheme they used failed on the same point of law. Taxpayers will be able to appeal against the penalty.
Accelerated tax payment in avoidance cases - Legislation will be included in Finance Bill 2014 to require payment of the tax in dispute in a tax avoidance enquiry when an ‘avoidance follower penalty notice’ is issued. This will take effect from Royal Assent which is expected mid July 2014.
At present taxpayers (in most cases) can hold on to the disputed tax while the dispute is being investigated. This can take a number of years, and there is evidence that some taxpayers enter into avoidance schemes primarily for the cash flow benefit. "

In your opinion, what is the legal position of taxpayers if HMRC already acted on the so called discovery back then which was not really a discovery at all for them as they were aware of it and took action they thought was necessary back then.

If it was proven that not only did HMRC discover the loan payment back then but they also took action they deemed necessary at the time by imposing tax on the interest on the loan and also increasing our tax code as a result of the loan back in 2008. Do they have a legal ground to go back and say "Actually the action we took back then was not severe enough, we want to go back and take further action" which is exactly what they are trying to do right now.

[cerner]

Have a read of what Saleos said regarding responding to HMRC questions/requests for information.

http://forums.contractoruk.com/hmrc-...ml#post1858160

I'd rather rely on a tax advisor like him than a defunct outfit like Edge.

As for bigdud...

Yea I read that but I'm sorry I can't see how a lawyer can step in and provide you with information asked of you at the detailed enquiry assessment request. Only the loan provider have the knowledge of the complexity of the loan arrangement and how various bits is strung together. That is why I'm of the opinion that the lawyers cannot replace he loan provider in this instance.

Lawyers will obviously have role to play further down the line but not at the detailed enquiry assessment request stage. This should be for the loan provider

[varunksingh]

The timing of this post is quite relevant.

At this time there is no 'lead case' appeal concerning a test case on Edge (as far as I am aware) and therefore 'Group Representation' for related cases is not an issue. There are potential problems for an individual becoming a member of a group in these circumstances and the decision should be carefully weighed up at the time.

I have been dealing with cases on HMRC and ex-Edge employees going back to January 2007 and although each case will have obvious similarities, there are always factors that make each case unique.

HMRC deal with each case on its own facts and with each individual. You will all know that HMRC are not dealing with any 'group' but with you.

It is tempting to join the crowd in what seems like an easy solution to the problem at minimum cost, but you may not be aware of all the issues or how things are likely to proceed.

My observations and prediction (subject to change) at this time are:

1. The case of Philip Boyle may have little in common with the EBT loan scheme operated by Edge but that is not the point. The important fact of the decision in this case (the first of its kind) is that it goes some way towards clarifying the existing law at the time you were a member of the scheme and HMRC won on all counts. The taxpayer has been given a right of appeal. That is the case you should be supporting irrespective of what scheme you were with!

2. HMRC are likely to write to you in the New Year with a view to determining your Section 9A Enquiries (if you have them) and/or your Section 29 Discovery Income Tax assessments and could issue Closure Notices to move things along.
They will also want to review all earlier and any missed later years (subject to any limitations).

3. These matters are also relevant (if you are not burying your head in the sand):

Consider a Voluntary Settlement while you still have time (this will suit very few cases)

Consider your defences

Your potential total Income Tax bill for ALL years

National Insurance (if HMRC go down the 'employment' route)

Determining the applicable tax due date (possibly earlier)

Late Payment Surcharges

Late Payment Penalties

Interest on Late Payment

Tax Geared Penalties relating to a possible Failure to Notify or to submit Tax Returns and/or Inaccuracies in Tax Returns (these can be up to 70% of the tax bill)

Failure to Disclose (you did not tell HMRC but they found out!)

So I think these are the real issues and you would be wise to agree a Fixed Fee with a properly qualified and experienced Specialist for your own individual case before the **** hits the proverbial fan.

Can you please elaborate
1) Why all should support Boyle case? What are the benefits?
2) Why law in particular was clarified for during the years of operation of Edge?