Reply to: Settlement or other options - Darwinpay

[centurian]

Now the question - with EBT people have actually earned money - this is baseless and cannot be proven. Would HMRC say if anyone takes a loan and pays off tax on it to HMRC, then the loan becomes his earnings ( i.e., he does not have to repay to the lender).

So if HMRC win - and "prove" the loan was really earnings, does that automatically cancel the loan ??

No-one really knows - the scenario has never been tested AFAIK.

Pure gut feeling, probably not - the loan could still be called in. They could argue your tax bill from HMRC was on your gross earnings, which you promptly gifted away instantly - and then just happened to take out a loan for a very similar amount, which is what they want to call in.

I'd say it's highly unlikely - and there are probably other tricks to legally avoid paying it, but I don't think there is anything automatic in law which would cancel the loan in the event of losing to HMRC.

[StrengthInNumbers]

I remember Saleos reaching out to dandy and MJP to work together and join forces. Don't think it happened though.
I am still in touch with my MP but may contractors are just not interested in doing any thing.

Together if could stand HMRC will not have a chance in hell. Problem is trusting each other and taking time out to work on it together.

[Rob79]

Not sure what others are feeling, but I am in mood to fight this with f**king HMRC and the politicians who think they can make any law they like. If a law is broken we can be held accountable but EBT was within the law at that time. If they had left a loop hole knowingly why blame people for using it.
Tomorrow they gonna tax people for having breathed air in previous years ( this is rubbish).

I am thinking this retrospective law changes might aswell go against some EU human rights.

You cannot make a law and say this is how you were supposed to have acted... this is pure bullsh*t.
Law should be applied from the time it is in-acted.

Nut head Tories came up with similar retrospective immigration law to do with changing HSMP criteria for those people who have already applied. A group was formed and they fought it and won the case that law cannot be applied retrospectively.

Now the question - with EBT people have actually earned money - this is baseless and cannot be proven. Would HMRC say if anyone takes a loan and pays off tax on it to HMRC, then the loan becomes his earnings ( i.e., he does not have to repay to the lender).

Lets get together and fight these lunatics.

1. Retrospection in tax law has been tested at EU level and held to be acceptable where it is obvious that the will of Parliament is being thwarted.
2. The EU rules dealing with PEOPLE are much more protective than laws dealing with TAX over which most countries have sovereignty
3. Most contractor schemes are synthetic, i.e. they rely on a particular reading of complex legislation.
4. Almost EVERY synthetic tax scheme (contractor or otherwise) used in the last 15 years has been struck down by "purposive interpretation" (substance over form).
5. Politicians CAN make any law they like - short of revolution, if you don't like it, get elected and change it.
6. No draughtsman deliberately leaves loopholes, most arise because of the impossibility of covering every situation
7. You can be legal but not get the effect you want because a judge will prefer a different legal interpretation
8. In most EBT cases, the trust has no income or assets other then the funder and therefore it is possible to "prove, at least beyond a reasonable doubt" that the source and destination are linked

I don't understand your last comment about the loan becoming earnings - sorry.

Suffice to say that if you are a financial trader the tax laws operate to essentially tax your profit.

[Rob79]

I was under the impression that this approach would not work as it was essentially down to HMRCs discretion which schemes are simliar and which are not. ie if they win a case against a particular EBT that ruling in their opinion applies to all EBTs but if they lose the ruling just applies to just that particular EBT.

Besides , why haven't any of the so called providers adopted this collective approach?

Also surely downside of the collective approach is some poorly run schemes will be included and if they are picked as a test case your odds have been slashed before you even start?

Certainly some of the above is true but it's not the whole picture.

HMRC does not have discretion at all. They can make a decision that Scheme A is like Scheme B but different from Scheme C but that can be challenged, usually in Court. It is then for a judge to decide.

Providers in many cases have moved on. They took fees and when those fees stopped because the scheme was closed, there is nothing in the pot to continue the fight. It's easier for them to liquidate, reform as a different company and punt the next iteration of scheme. There is no incentive for them to stay around and fight. (That said, I think AML are doing that although I'm unclear as to their motivation other than they continue to use the name and brand perhaps?)

Tax litigation is all about the detail. Poorly papered and run schemes will get shot down with ease. Schemes which have been properly documented and where the actions follow the documents, are hard nuts to crack without some form of over-riding judicial rule. Unfortunately that over-riding rule exists (Ramsay, purposive construction, substance over form) which allows lower tier judges to perform cartwheels of logic to find for HMRC. Getting to a proper legal review (Court of Appeal and above) is a long and expensive process.

It's also the case that because most tax cases are about how the FACTS of what happened relate to the LAW, a finding of FACT to which a "not unreasonable" analysis has been applied at a lower tier is difficult to overturn. Thus the standard required for proof has been debased making it easier for HMRC to pick off weak schemes.

[junio]

Not sure what others are feeling, but I am in mood to fight this with f**king HMRC and the politicians who think they can make any law they like. If a law is broken we can be held accountable but EBT was within the law at that time. If they had left a loop hole knowingly why blame people for using it.
Tomorrow they gonna tax people for having breathed air in previous years ( this is rubbish).

I am thinking this retrospective law changes might aswell go against some EU human rights.

You cannot make a law and say this is how you were supposed to have acted... this is pure bullsh*t.
Law should be applied from the time it is in-acted.

Nut head Tories came up with similar retrospective immigration law to do with changing HSMP criteria for those people who have already applied. A group was formed and they fought it and won the case that law cannot be applied retrospectively.

Now the question - with EBT people have actually earned money - this is baseless and cannot be proven. Would HMRC say if anyone takes a loan and pays off tax on it to HMRC, then the loan becomes his earnings ( i.e., he does not have to repay to the lender).

Lets get together and fight these lunatics.

[DonkeyRhubarb]

Forget the providers. Most have run for the hills. These charlatans were only interested in making money out of you, not spending any of it to defend you.

You need a few hundred £k to defend a scheme through FTT, UT, CofA, SC.

A small group has no chance.

All club together, raise a £million+, then you can take on HMRC.

[FTTM]

I was under the impression that this approach would not work as it was essentially down to HMRCs discretion which schemes are simliar and which are not. ie if they win a case against a particular EBT that ruling in their opinion applies to all EBTs but if they lose the ruling just applies to just that particular EBT.

Besides , why haven't any of the so called providers adopted this collective approach?

Also surely downside of the collective approach is some poorly run schemes will be included and if they are picked as a test case your odds have been slashed before you even start?

[DonkeyRhubarb]

Agreed on the last point.

I did raise this a few weeks ago to be met with an overwhelming apathy.

The problem we (NTRT) have found is that motivating contractors is a bit like herding cats.

You wouldn't believe the number of people who whinged about paying £200 when they were facing a 6-figure liability.

[Rob79]

Unfortunately all these shysters have a vested interest in making it go away at the least cost to themselves.

You are better off forming your own group, raising a fighting fund and taking independent advice.

I can't help feeling all the EBT'ers, in all the various scheme variants, are missing a trick. There are several tens of thousands of you and if only you formed one huge army, instead of lots of little disparate groups, and all chipped in say £100 you could amass a serious fighting fund to give HMRC a real run for their money.

Agreed on the last point.

I did raise this a few weeks ago to be met with an overwhelming apathy.

[DonkeyRhubarb]

CHD want all this to go away, so do Sanzar/Garraway or whatever they are called.

Unfortunately all these shysters have a vested interest in making it go away at the least cost to themselves.

You are better off forming your own group, raising a fighting fund and taking independent advice.

I can't help feeling all the EBT'ers, in all the various scheme variants, are missing a trick. There are several tens of thousands of you and if only you formed one huge army, instead of lots of little disparate groups, and all chipped in say £100 you could amass a serious fighting fund to give HMRC a real run for their money.

[jbryce]

HMRC doing this understandable as they don't want to go to court. But contractor help desk saying this to people depending on them is plain evil. They should rename to HMRC help desk

CHD want all this to go away, so do Sanzar/Garraway or whatever they are called.

EBTs have not been taken to court because it is not a slam dunk for HMRC - they may well lose - which is a nightmare because they would appeal and then it starts to move up the court system which is very expensive. If they win, then users would have to chase it through the court system - it's painful for everyone.

This will not end at an FTT.

[StrengthInNumbers]

I am not with CHD. I am in another scheme where promoter at their cost are going to tribunal.

[DonkeyRhubarb]

HMRC doing this understandable as they don't want to go to court. But contractor help desk saying this to people depending on them is plain evil. They should rename to HMRC help desk

Have you paid any money to CHD for this service?

[StrengthInNumbers]

HMRC doing this understandable as they don't want to go to court. But contractor help desk saying this to people depending on them is plain evil. They should rename to HMRC help desk

[DonkeyRhubarb]

Also scaring people by saying NI and penalties.

HMRC are saying this to make the settlement seem attractive.

If you take NI & penalties away then basically the settlement is 100% of what they say you owe. Not many people would sign up for that.

Here's something to consider...

Boyle was a rubbish scheme. He went to a tribunal and lost.

Did he end up liable for NI or penalties? Or was it just tax & interest?