Edge EBT thread

[jbryce]

apart from the fact that



and I can guess what HMRC do when they find people didn't enter their details...

...if only it was so easy. My (non Edge) scheme was not consistent in the advice given to users on how to complete an SA, and some may have omitted the SRN number out of nativity/stupidity/whatever.
Luckily (and I use this word very advisedly) HMRC were quite capable of deriving/guessing the amounts owed from the P11Ds. So there is visibility of a sort.

As for accountants peddling their wares - they really need to stick to the actual facts, as opposed to resorting to scare tactics. A simple call to HMRC would have shown that Edge was indeed DOTAS registered and really didn't warrant the panic posts on this forum.

Everyone is twitchy, nobody can say, for certain, how this is going to pan out. So be patient, take good advice (other accountants are available) and be prepared to fight/cave in.

It's also good to have posts from members who have not been impacted by this f*c*-up, we might not like what they say - but some hardcore reality is welcome.

[Saleos]

Blimey there is some crap on here

It is no wonder that so many struggle to know which way to turn. Please do your own research but more importantly take advice from someone who actually understands this stuff. There are thousands of accountants and Chartered Tax Advisors out there only a handful of whom post here. If you think it expensive to use an expert see Boyle as a great example of the cost of not doing so!

Some facts:

Edge was disclosed and has an SRN. Confirmed by HMRC.

The obligation to disclose was that of the employer. HMRC's guidance at the time made it clear that the employer but NOT employees using an employment structure needed to disclosure the SRN. So there should be no question of penalties for not including the SRN on your tax return.

Doing so would though have undoubtably increased the prospects of successfully rebutting any discovery assessments under S29(5) TMA 1970.

A payment notice can be issued to anyone who submitted their return on the basis of the tax advantage envisaged by the disclosed arrangements. Whether or not they included the SRN (it would be an rather easy way to defeat the purpose of the proposed new rules if you could simply omit the SRN wouldn't it!).

HMRC are to publish further guidance on payment notices by the end of May, and allegedly the initial list of arrangements to which they will be applied before Royal Assent.

HMRC will tell me before they send any payment notices out and I will tell my group. At least being forewarned is better than ignorance, though many may prefer the latter.

A payment notice does NOT determine liability. You "simply" have to hand over the disputed tax (and interest) whilst the argument goes on. The payment is treated as a payment in account.

Penalties will apply if you pay late following a payment notice. Up to 15%.

After receipt of a payment notice those that can show genuine hardship to HMRC should be able to agree payment terms. Six months is not uncommon, three years or more very unlikely. Distraint or County Court proceedings and even bankruptcy are options for HMRC if they believe people have the means to pay but simply won't. Have your evidence to show you can't pay rather than simply won't and engage with HMRC, or expect the bailiffs.

If you pay up and simply roll over you will never get that tax back - despite nothing being done to actual prove it was due.

So the only realistic course for those that want to get their money back is to fight on. Realistically that means getting professional help whether you think this an attempt to drum up business or not, and ultimately litigation.

Litigation is expensive.

Given the prospects of former Edge employees coordinating themselves into a united group of 200 or more (which would realistically be necessary to get the costs of even a hearing before the FTT down to £1000 or less per head - the more the cheaper) to fund proper litigation an Edge case is unlikely based on the disparate postings here. I'd be delighted to be proven wrong.

So you may have to rely on litigation elsewhere. But you can't issue follower notices to HMRC even if another very similar arrangement is litigated (as is very likely ).

Anyone that thinks settlement on attractive terms is likely should first read the Litigation and Settlement Strategy, then the EBT Settlement offer and consider whether things are likely to get more or less attractive once HMRC holds your cash.

So the best tactic and chance of you getting any tax back after a payment notice is to stop navel gazing and get yourselves together, create a fighting fund, and get on the front foot. Find an advisor you believe has the expertise and experience to manage the enquiry process and instigate litigation.

Or you can keep posting on here waiting for HMRC to send you a payment notice and then roll over and have your tummy's tickled.

I think you will find that he has been very upfront from the beginning about what he was doing and offering to do, otherwise Cojak and Admin would have kicked him out a long time ago.

Reading what he has said, I really don't think he could do much more. He has offered to provide the help he can and has stated above exactly what the perceived current state of play is. Which is that DOTAS scheme members who put the DOTAS number on their self assessments will probably have to pay HMRC later this year....

If no DOTAS number is recorded on your self assessment forms than you may not need to pay now, but HMRC may well descend on you in ways that make BN66 look pleasant...

[eek]

Blimey there is some crap on here

Um was that aimed at me because I thought my views are clear. You will need to pay up (due to left field law changes) and unless you pay to fight you will have no chance to recover the money...

As for what should appear on your tax return, it seems that not writing it down has resulted in Sanzar members getting bills for 2007-8 last week. That could not have happened if the SNR number had been on the self assessment return. Yes you may not have needed to mention it on the return but I bet the lack of explicit disclosure has made those people EVEN more interesting to HMRC....

[jbryce]

Um was that aimed at me because I thought my views are clear. You will need to pay up (due to left field law changes) and unless you pay to fight you will have no chance to recover the money...

As for what should appear on your tax return, it seems that not writing it down has resulted in Sanzar members getting bills for 2007-8 last week. That could not have happened if the SNR number had been on the self assessment return. Yes you may not have needed to mention it on the return but I bet the lack of explicit disclosure has made those people EVEN more interesting to HMRC....

I think he's probably referring to the earlier posts from a member of the profession....

As for the SRN.....just had a chat with HMRC re. this. The guy I spoke to said they used the P11Ds and employment by Sanzar as their way in. They used the DOTAS disclosure by Sanzar as the starting point, and just followed the trail from there.
HMRC accept the fact that the SRN didn't appear on everyone's return - but they don't need it, they aren't idiots - they're after the tax, not the genitalia.

[davedavis]

There are thousands of accountants and Chartered Tax Advisors out there only a handful of whom post here.

Do your own due diligence when it comes to paying for professional help. Most reputable firms will not resort to trawling forums and beware of anybody wanting money up front based on loans outstanding or some other arbitrary measure

[Saleos]

It was a general comment and not aimed at any individual.

Re Sanzar I assume those affected have considered that the discovery window for 07-08 actually closed on 5 April 2012?

HMRC must therefore be relying on the provisions of s36(1) TMA 1970 but that requires them to be able to show that the taxpayer has been careless. If they disclosed their employment, and loans, but not the SRN, it is hard to see how they were careless to follow HMRC guidance which makes it clear that employees benefiting from a scheme used by their employer need not disclose the SRN: indeed the employer is under no obligation to even give the SRN to their employee.

No doubt those affected will take advice from people who do not post on here or who charge up front (but fixed!) fees.

I think he's probably referring to the earlier posts from a member of the profession....

As for the SRN.....just had a chat with HMRC re. this. The guy I spoke to said they used the P11Ds and employment by Sanzar as their way in. They used the DOTAS disclosure by Sanzar as the starting point, and just followed the trail from there.
HMRC accept the fact that the SRN didn't appear on everyone's return - but they don't need it, they aren't idiots - they're after the tax, not the genitalia.

[sl4]

Four Year Window

It was a general comment and not aimed at any individual.

Re Sanzar I assume those affected have considered that the discovery window for 07-08 actually closed on 5 April 2012?

HMRC must therefore be relying on the provisions of s36(1) TMA 1970 but that requires them to be able to show that the taxpayer has been careless. If they disclosed their employment, and loans, but not the SRN, it is hard to see how they were careless to follow HMRC guidance which makes it clear that employees benefiting from a scheme used by their employer need not disclose the SRN: indeed the employer is under no obligation to even give the SRN to their employee.

No doubt those affected will take advice from people who do not post on here or who charge up front (but fixed!) fees.

Hi Saleos,

thanks for all your recent postings, I think most people appreciate your comments.

One question, which I suspect many people are asking is this, "is there now any importance in the 4 year window for Discovery Assessments ?"

I've seen a few discussions regarding 4 year cut-offs and 6 years if acting dishonestly etc etc, but the real point is HMRC want all loans to be taxed with interest to be paid up from 2004, so why are we discussing 4 year windows.

[eek]

Hi Saleos,

thanks for all your recent postings, I think most people appreciate your comments.

One question, which I suspect many people are asking is this, "is there now any importance in the 4 year window for Discovery Assessments ?"

I've seen a few discussions regarding 4 year cut-offs and 6 years if acting dishonestly etc etc, but the real point is HMRC want all loans to be taxed with interest to be paid up from 2004, so why are we discussing 4 year windows.

The reason for discussion 4 year and 6 year cut offs is because that is how far HMRC can legimately go back unless total and utter gross dishonesty can be shown....

Section 34(1)

In any case of incomplete disclosure without careless or deliberate conduct the time limit for a discovery assessment is not later than 4 years after the end of the tax year to which it relates.

Section 36(1) and (1A)

In any case involving a loss of tax brought about carelessly, the time limit for making a discovery assessment is not later than 6 years after the end of tax year to which the assessment relates.

[sl4]

Prior to 2008

The reason for discussion 4 year and 6 year cut offs is because that is how far HMRC can legimately go back unless total and utter gross dishonesty can be shown....

eek, so are you saying that those who participated in a DOTAS prior to 2008 who have not received a Discovery Assessment are in the clear?

I've seen postings on these forums and even spreadsheet interest calculators starting from 2004.

[eek]

eek, so are you saying that those who participated in a DOTAS prior to 2008 who have not received a Discovery Assessment are in the clear?

I've seen postings on these forums and even spreadsheet interest calculators starting from 2004.

Nope, I'm merely saying why people discuss 4 and 6 year windows....

Beyond that I'm merely an interested bystander.....