Edge EBT thread

[Tiger22]

Congratulations on pulling your head out of the sand. Better late than never
The grounds to appeal an APN are limited. One of these grounds is that the year in question is not "open" (=under enquiry or discovery).

You say the letter you got makes "no mention of under what tax law" they intend to open the enquiry. So it might be that the enquiry is not a valid one, ant you can therefore argue that the APN should be withdrawn.

The devil is in the details, though.

You should ask on Big Group.

Thanks, I'll follow through on Big Group for some of this.

I perhaps didn't explain myself properly. I wasn't trying to appeal the APN per se, but rather trying to appeal the general principle that I owe anything because I don't believe that a loan should be treated as income. If I had been sent a Notice of Assessment in past for this year then I could appeal that, even though if an APN subsequently came through I would have to pay it. Until now however I have never had anything through saying I owed money for that year and so have never had a need to appeal/object.

By law the APN has to be paid but I want to make sure that by not objecting at some point in principle to the demand being made, I do not tacitly agree the HMRC position.

[DotasScandal]

Ok.
An APN cares not about the specifics of the underlying dispute. And the APN team won't care either. An APN is simply a bill that HMRC conjures out of thin air by saying they believe you owe them money.
Thanks to our wonderful Parliament, who apparently isn't too concerned with presumption of innocence, they now have a right to do that.
They say it's a "payment on account".

What makes APNs so revolting is precisely the absence of right to appeal.
So the fact that you think that the loans should not be treated as
income does count for nothing in the context of an APN, and you cannot appeal on that ground.

The underlying question of loans vs income may be determined by a court at some point in the future. Consensus is that once HMRC has your money, they will be in no rush to have this happening.

[Tiger22]

So I pay my APN. Then at some unspecified point in the future, miracle of miracles happens and HMRC are slapped down and it is judged the scheme is valid and they had no right to take the money which I paid via the APN. I try and ask for the money back. Can they say "no, because this whole time you've never written to us saying that you disagree with our determination that you do owe us money, so irrespective of the judgement we can keep your money because your lack of objection is the same thing as you agreeing with us."

Can that happen? Or is it irrelevant whether I appeal or not? I'm not talking about appealing to the APN people as I know that will go nowhere. I just wonder whether I have to have it lodged somewhere at HMRC I disagree that I owe any money.

[DotasScandal]

No, they cannot do that.

However, expect them to appeal any adverse court decisions into eternity and (my personal opinion) come up with all sorts of excuses not to give the money back shall we be vindicated.

[DonkeyRhubarb]

Can they say "no, because this whole time you've never written to us saying that you disagree with our determination that you do owe us money

In your case they haven't made a determination. All they've done is open an enquiry. Until they issue an assessment, or closure notice, you've got nothing to appeal against.

APNs only change where the money sits (HMRC's coffers instead of your's) until the underlying tax dispute is concluded. They have no bearing on the dispute itself.

[Dylan]

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Editted - just in case HMRC aren't planning on it, don't want to give them ideas.

[DonkeyRhubarb]

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Editted - just in case HMRC aren't planning on it, don't want to give them ideas.

I doubt HMRC are thinking much further ahead than collecting all the "easy" APN money.

[Dylan]

I wouldn't bet on it... Keeping it is high on the agenda too.

[CitySlicker]

Emails just bounce back from [email protected]

On the generic EBT thread A Man of Constant Sorrow posted



Hopefully he will join us here and we can compare notes.

When I contacted them about the 2010/11 investigation letter via [email protected] they responded very quickly and positively.

I have emailed them this morning about the 2008/09 demand that looks like it is on it's way (no letter yet, but an amount on my self portal). I will let you know how they respond. As I get a clearer picture about their approach I will update the original post.

I wouldn't be too worried about the Redstone thing. I received a 'please come back' type email a while back and the new company seemed to be setup to comply with the new (Dec 2010?) regulations. Probably not a bad thing if the pre GAAR EBT and the post schemes are seperate entities.

Early days, but what I'm seeing is that we have promising support so far.

Is anyone still in contact with Edge about the APN's? I just received one for 2005/6. When I email them on [email protected] my messages bounce back. Thank you

[CitySlicker]

Statutory time limits question - just received APN relating to tax year 2005/6

Hey folks....good prompt reply from Michelle at Edge...



Thank you for your email in respect of the ‘08/’09 HMRC tax demand that you have received.

We are very aware of this situation and can advise that this letter has been sent to several thousand contractors across the industry and is not exclusive to yourself. We appreciate that none the less, this letter will be very worrying for you and not something you anticipated receiving.

· It is important to understand the context of this letter and why this has been sent on such a large scale. As you are aware, the letter relates to the ’08 / ’09 tax reporting period and HMRC have very specifically targeted this period because they have four years from the end of the tax year in question to raise the assessment. If it is deemed that you took “reasonable care” in managing your tax affairs, they cannot charge any penalties, other than interest, which runs from the original due date. In the letter you have received HMRC have stated that they have made the assessment in order to protect their position and ensure that potential tax due for ’08 / ’09 is not lost because of the statutory time limits for issuing assessments. In other words, the letters have been issued to secure the option for HMRC to undertake a future challenge.

It is important to note that there has been no significant change in legislation and the position on EBT’s remains the same, they were lawful and compliant entities until the change in legislation in December 2010. HMRC have undertaken this campaign in relation to a case they are currently pursuing against Rangers FC. HMRC challenged Rangers on the basis that the EBT loans were not loans but rather salaried income, importantly, they lost the case with the judge finding in Rangers’ favour, further verifying that the loan payments are indeed recognised as such. HMRC have of course appealed this decision and it is on the hope of this appeal being found in their favour, that they have under taken this current campaign.

As always with significant approaches from HMRC, we have sought opinion on this matter from our tax advisors who are of the view that it is fundamentally important to appeal this assessment. If you do not appeal, the value of the demand becomes legally enforceable and HMRC will seek payment. If you elect to pay the demand, it is important to note that this will signal your acceptance of HMRC’s position, that the loan payments were indeed income and HMRC will then have the ability to apply the same rationale to the consecutive tax years that followed i.e. ‘09/’10 and ‘10/’11

With this in mind, please find attached an appeal letter you can utilise in order to respond to HMRC. You will need to personalise the letter with your address and complete any fields highlighted in red, we also suggest sending the letter via recorded delivery to ensure it has been received.

If you wish to discuss this matter further or if you have any questions you would like me to address, please email me back advising a convenient date and time for me to call you and I will diarise a call back. I’m sure you can appreciate that we are fielding a sizable number of queries on this so diarizing a call back you ensures my availability to speak with you.

Kind regards,

Hi - I received the dreaded letter and subsequent APN from HMRC last month. The APN relates to tax year 2005/6!

I saw Michelle's message above, it seems most people are getting APNs for ty 2008/9.

Does anyone have any opinion on a claim that relates to such an old tax year? (2005/6)?

I have seen a few posts mentioning the '4 year rule' and statutory time limits that the HMRC have, to make a claim by.

I spoke to HMRC about the '4 year rule' yesterday and they said an enquiry had been open since 2008 but I never received a letter or any notification from them at all.

Appreciate peoples thoughts on this. Thx