HMRC Consultative Document - marketed tax avoidance schemes

[cojak]

I guess being quite might give a wrong signal. So let it continue.

Can you please tell me which case HMRC are legitimately winning case after case? If you cannot then I guess all names you have given me will apply back. But what I would request is lets discuss and If I am wrong then please correct me instead of calling names. I am not fighting here. Will accept my mistake if I am wrong with you and with HMRC as well. If I have to sell myself and pay RIGHTFUL tax I would. I am not saying that.

Recent cases from HMRC in news are
1) Boyle - Which was not even an EBT, Forex even did not exist but should apply to ALL EBTs as per HMRC!
2) AAM - Giving Bonues through EBT to companies in individual names with full access to those funds by those company directors. But it should apply to ALL EBTs as per HMRC!
3) Rangers where HMRC lost should not even be mentioned which was an EBT and was giving Loans. And I know at least one argument why my EBT would be more by the law compared to Rangers.
4) I am not going to older cases at all where HMRC had lost. Lets just keep to above three

Now as you proved above all the cases I mentioned are different from Arctic and I AGREE 100%. Similarly Boyle and AAM are different to Rangers and MAY be VERY different to other EBTs.

Now as per HMRC's new condoc, NO ONE WILL HAVE THE RIGHT TO APPEAL once a follower/failure notice has been issued. HMRC MIGHT says Boyle's or any other case should apply to EBTs and all users have to pay. No tax payers get the right to prove that your case is different. If they can do that then why can't they do this to other case which you have rightly proved are different? And that is the whole point - How HMRC can use this legislation.

Second point is retrospective nature of legislation. If that is allowed than what is legal and rightful tax planning today does not make a difference because no one knows what HRMC might change tomorrow. So as per natural justice it should not be allowed and EVERY TAX PAYER should understand this. If all are happy and say retrospective legislation should be allowed than ok. But you cannot ignore and say that government can do retrospective legislation and it will not affect us ever because we run a ltd co.

Yes we can. Because this consultation doc is not referring to Ltds - it's referring to individual taxation.

I will use this post EVERYTIME you try to protest otherwise.

Otherwise, outside of your Ltd argument - away you go, I'll not comment on that.

[varunksingh]

Ok. I really don't have a problem with that and hope I am wrong. It is in my interest to be wrong.

If I just may request eek to let us know of any other EBT related cases apart from the ones I mentioned. Don't think that will upset any residents. I really don't want to keep my eyes closed if HMRC r wining this in court. Will be interesting to see what UTT says in Rangers case.

[cojak]

Ok. I really don't have a problem with that and hope I am wrong. It is in my interest to be wrong.

If I just may request eek to let us know of any other EBT related cases apart from the ones I mentioned. Don't think that will upset any residents. I really don't want to keep my eyes closed if HMRC r wining this in court. Will be interesting to see what UTT says in Rangers case.

No you can't because I've asked him not to post in this thread.

Post in here if you want to continue the conversation: http://forums.contractoruk.com/accou...trusts-17.html

[LisaContractorUmbrella]

Ok. I really don't have a problem with that and hope I am wrong. It is in my interest to be wrong.

If I just may request eek to let us know of any other EBT related cases apart from the ones I mentioned. Don't think that will upset any residents. I really don't want to keep my eyes closed if HMRC r wining this in court. Will be interesting to see what UTT says in Rangers case.

All of this discussion around legal precedents and whether or not all EBT's work in the same way is pretty irrelevant as they were outlawed with the introduction of the Disguised Remuneration Legislation. The fact that people kept coming up with variations on a theme has probably contributed heavily to HMRC taking their current all encompassing approach

[convict]

Yes we can. Because this consultation doc is not referring to Ltds - it's referring to individual taxation.

I will use this post EVERYTIME you try to protest otherwise.

Otherwise, outside of your Ltd argument - away you go, I'll not comment on that.

Looking at the actual draft legislation, rather than the consultation doc I see:

ìRelevant taxî, ìtax advantageî and ìtax arrangementsî
2 (1) This paragraph applies for the purposes of this Part of this Schedule.
(2) ìRelevant taxî meansó
(a) income tax,
(b) capital gains tax,
(c) corporation tax, including any amount chargeable as if it were
corporation tax or treated as if it were corporation tax,
(d) inheritance tax,
(e) stamp duty land tax, and
(f) annual tax on enveloped dwellings.

So clearly it's wider than personal taxation, otherwise why all the other taxes?

Tax enquiries, returns and tax appeals
3 (1) This paragraph applies for the purposes of this Part of this Schedule.
(2) ìTax enquiryî meansó
(a) an enquiry under section 9A or 12AC of TMA 1970 (enquiries into
self-assessment returns for income tax and capital gains tax),
including an enquiry by virtue of notice being deemed to be given
under section 9A of that Act by virtue of section 12AC(6) of that Act,
(b) an enquiry under paragraph 5 of Schedule 1A to that Act (enquiry
into claims made otherwise than by being included in a return),
(c) an enquiry under paragraph 24 of Schedule 18 to FA 1998 (enquiry
into company tax return for corporation tax etc), including an
enquiry by virtue of notice being deemed to be given under that
paragraph by virtue of section 12AC(6) of TMA 1970,
(d) an enquiry under paragraph 12 of Schedule 10 to FA 2003 (enquiries
into SDLT returns), or
(e) an enquiry under paragraph 8 of Schedule 33 to FA 2013 (enquiries
into the annual tax for enveloped dwellings returns).

(7) “Tax appeal” means—
(a) an appeal under section 31 of TMA 1970 (income tax: appeals against
amendments of self-assessment, amendments made by closure
notices under section 28A or 28B of that Act, etc), including any
appeal under that section by virtue of regulations under Part 11 of
ITEPA 2003 (PAYE),
(b) an appeal under paragraph 9 of Schedule 1A to TMA 1970 (income
tax: appeals against amendments made by closure notices under
paragraph 7(2) of that Act, etc),
(c) an appeal under paragraph 34(3) or 48 of Schedule 18 to FA 1998
(corporation tax: appeals against amendment of a company’s return
made by closure notice, assessments other than self-assessments,
etc),
(d) an appeal under paragraph 35 of Schedule 10 to FA 2003 (stamp duty
land tax: appeals against amendment of self-assessment, discovery
assessments, etc),
(e) an appeal under paragraph 35 of Schedule 33 to FA 2013 (annual tax
on enveloped dwellings: appeals against amendment of selfassessment,
discovery assessments, etc), or
(f) a further appeal against any determination of an appeal within
paragraphs (a) to (e) or any further appeal within this paragraph.

EXPLANATORY NOTE
CLAUSE 1 SCHEDULE 1: CONSEQUENCES OF FAILING TO TAKE ACCOUNT
OF RELEVANT JUDICIAL RULINGS
SUMMARY
1. Clause 1 and Schedule 1 introduce a new requirement for users of certain tax
arrangements to amend their returns to relinquish the asserted tax advantage obtained by
applying those arrangements when notified to do so by HM Revenue & Customs (HMRC).
HMRC may issue such a notification when those tax arrangements have been shown in a
relevant judicial ruling not to give the asserted tax advantage if applied to those tax
arrangements. The measure provides for a penalty to be charged on those taxpayers who fail
to make the required amendment or to satisfy HMRC that no such amendment is necessary.
Taxpayers have a right of appeal against the penalty.
Taxpayers in receipt of a notice to amend their returns will also be notified of a requirement
to pay the amount of the tax advantage to HMRC. This amount will only be payable if the
taxpayer fails to amend the relevant return and pay the additional tax liability.
The measure applies to Income Tax (IT); Capital Gains Tax (CGT); Corporation Tax (CT);
Inheritance Tax (IHT); Stamp Duty Land Tax (SDLT); and the Annual Tax on Enveloped
Dwellings (ATED). The clause provides for further taxes to be added to the measure by
Treasury Order.

[convict]

I should have said, my point is although the doc is entitled "Tackling marketed tax avoidance" the actual legislation is clearly much wider in scope and boils down to getting the money 1st are arguing later.

1 (1) HMRC may give a notice (a “failure notice”) to a person (“P”) if Conditions
A to D are met.
(2) Condition A is that—

(a) a tax enquiry is in progress into a return or claim made by P in
relation to a relevant tax, or
(b) P has made a tax appeal but that appeal has not yet been determined
by the tribunal or court to which it is addressed, or abandoned or
otherwise disposed of.

(3) Condition B is that the return or claim or, as the case may be, appeal is made
on the basis that a particular tax advantage (“the asserted advantage”)
results from particular tax arrangements (“the applied arrangements”).

(4) Condition C is that HMRC is of the opinion that there is a judicial ruling
which is relevant to the applied arrangements.

(5) Condition D is that no previous failure notice has been given to the same
person (and not withdrawn) by reference to the same tax advantage, tax
arrangements and judicial ruling.

Nothing in there about it being limited to schemes.

[cojak]

I should have said, my point is although the doc is entitled "Tackling marketed tax avoidance" the actual legislation is clearly much wider in scope and boils down to getting the money 1st are arguing later.



Nothing in there about it being limited to schemes.

Eek has replied in the other thread.
http://forums.contractoruk.com/accou...ml#post1881864

But this is obviously getting ridiculous, so do you want me to let him reply in this thread or shall I move any Ltd questions to that thread?

Which is it to be?

And as a hint, not letting eek reply is NOT an answer I'll accept.

[convict]

Eek has replied in the other thread.
http://forums.contractoruk.com/accou...ml#post1881864

But this is obviously getting ridiculous, so do you want me to let him reply in this thread or shall I move any Ltd questions to that thread?

Which is it to be?

And as a hint, not letting eek reply is NOT an answer I'll accept.

I'm a big boy, let eek reply anywhere he likes.

[convict]

On the basis that I can't reply in the correct thread



Yes but its irrelevant. each example mentioned there is purely designed to ensure that HMRC receive payment of the full amount of tax due regardless of type (be it corporation tax, inheritance tax, individual tax and capital gains tax) no matter what contrived means was used to avoiding paying that tax .

There is absolutely, totally, utterly nothing there which would impact your typical contractor taking dividends as part of their remuneration no matter how you describe it and no matter which part of that documentation / legislation you look at.

My point was that there could be a scenario where HMRC win a case at FTT 2vs1 and then apply this at their discretion using their opinion to all those they think are caught by it.

There might not be something obvious today but the implications are definitely there, and based on HMRCs previous, I think they'll try it on, like they did with Arctic. How will you then fight to UTT without any money (because HMRC has it all).

Let's not forget the retrospective application of this either.

Irrespective of one's opinion of schemes, this is an unfair power shift from the taxpayer to HMRC.

[DonkeyRhubarb]

I should have said, my point is although the doc is entitled "Tackling marketed tax avoidance" the actual legislation is clearly much wider in scope and boils down to getting the money 1st are arguing later.

Nothing in there about it being limited to schemes.

Correct. It applies to any (final) decision of a court in a tax case. It also appears to apply to companies, not just individuals.

3(2)(c) an enquiry under paragraph 24 of Schedule 18 to FA 1998 (enquiry
into company tax return for corporation tax etc), including an
enquiry by virtue of notice being deemed to be given under that
paragraph by virtue of section 12AC(6) of TMA 1970

However, in reality, it is mostly only going to affect schemes, which are the intended target.