Reply to: New charge on outstanding disguised remuneration loans

[webberg]

Treasury select committee has no direct intervention powers over the Finance Bill.

The FB is debated by a committee before going back to the ratified.

The Treasury Committee may wring their hands over a lack of proper consultation and administer a light tap on the wrist of Osbourne for minor infringements, but they're his lapdog and do as they're told.

[BrilloPad]

I am a little behind the 8 ball here but how much influence do the Treasury Select Committee on pushing through 'HMRC' bills through parliament? Or do they remain neutral?

My local MP was one of the MPs who was on the Treasury Select Committee in 2008 that passed BN66/S58.

He was not aware of what he passed.

Once in the finance bill it has to become law or its a vote on no confidence in the government.

HMRC get what they want.

[difficulttimes]

I am a little behind the 8 ball here but how much influence do the Treasury Select Committee on pushing through 'HMRC' bills through parliament? Or do they remain neutral?

[webberg]

As I mentioned earlier in this thread, I think it unwise to discuss some of the implications in a public forum.

We have been looking into a how a more secure environment might be achieved.

Details to follow but...

We have/are creating a distinct part of our Big Group forum which we have titled "TAX TOPICS".

Each month we will choose a topic and invite comments, observations, thoughts, rants, whinges, suggestions, ideas and possible answers.

Members of Big Group will have access to this part of the forum without need to do anything.

Non members will be able to access and contribute to the forum once signed up.

That sign up process is simple.

We will need some evidence that the person is a contractor (APN, DA, redacted contract, etc).

Aside from that, we will need an email address - for preference your usual private address - and a forum name. That name can match the CUK name you use if that's easier.

There is NO CHARGE.

WTT Big Group does reserve the right to use the email address to send messages (we're planning a newsletter) but aside from that we will not bother you.

Joiners to the TAX TOPICS forum will NOT be able to see the rest of the BG Forum which is a paid for service (£18 a month, plus a joining fee that is going up from £60 very soon).

We're expecting this to be live perhaps Tuesday/Wednesday next week.

If you'd like details of how to join and are not already in Big Group, please PM me.

[DonkeyRhubarb]

All HMRC would need to do to defeat pre-2011 loan schemes is:

(1) take a test case to tribunal
(2) win
(3) issue Follower Notices to participants of all schemes under Condition C

https://www.gov.uk/government/public...rated-payments

1.3.4 Condition C

Condition C is met if HMRC is of the opinion that there is a judicial ruling which is relevant to the chosen arrangements.

I can only assume, therefore, that they are not so confident about number (2), hence the need to rig the game in their favour with new legislation.

[ASB]

They would only be able to apply the 5/4/2019 charge to loans they know about.

I assume a question along the lines of "ever had a loan" will find its way onto the sa. And if not there will be some form of reporting obligation which will allow assessment and penalties.

what they dont know wont hurt them. But will no doubt hurt the users.

it does sem a huge abuse of process. Advisors and experts are clearly struggling with what the ramifications may be.

standard project phase 4. Persecution of the innocent.

[DonkeyRhubarb]

So if you didn't have an enquiry and/or assessment for 2009/2010 and 2010/11, does this mean that HMRC will conclude you did in fact receive loans for those years? And tax you accordingly?

Or just on loans they are aware of which have APNs issued, e.g. loans from an EBT which are declared on your SA?

They would only be able to apply the 5/4/2019 charge to loans they know about.

[EBTContractor]

I agree with you.

The 5/4/19 charge can be levied against any outstanding loan going back to the dawn of time.

It's a very devious move by HMRC since it enables them to tax loans which have slipped through the enquiry net.

It's a bitter blow for anyone, who thought they were in the clear, because HMRC missed the enquiry/discovery window.

So if you didn't have an enquiry and/or assessment for 2009/2010 and 2010/11, does this mean that HMRC will conclude you did in fact receive loans for those years? And tax you accordingly?

Or just on loans they are aware of which have APNs issued, e.g. loans from an EBT which are declared on your SA?

[DonkeyRhubarb]

HMRC's lexicon does not contain words like sensible, pragmatic, flexible, compromise etc

[jbryce]

Cluster Duck

Like webberg we have to wait and see what comes of this in the legislation.
Three years? Plenty of time for HMRC to ratchet up the pressure and force people to cave in.
On the other hand, perhaps a breathing space to negotiate a large-scale face-saving sensible settlement offer with HMRC.

Stay calm and join Big Group.

[DonkeyRhubarb]

It occurs to me that speculating about how the rules might work or be interpreted and suggestions about who is/is not liable is giving HMRC an insight into how to construct the next stages and plug gaps that they have not thought of.

Yep, you don't want to give the buggers ideas.

My guess is that they will be watching closely over the next 3 years, to see how advisors respond to the proposed charge, so they can try make it watertight.

If you're planning anything "creative" keep bloody quiet about it.

[DotasScandal]

It's a bitter blow for anyone, who thought they were in the clear, because HMRC missed the enquiry/discovery window.

Maybe a long overdue wake-up call for the (very sizeable) "I'm all right, Jack" brigade.

"First they came for the guys with open enquiries, and I said nothing..."

[webberg]

Enough now

The Technical Note on Disguised Remuneration is the first stage of the process.

We will in due course see a Consultation document and then draft legislation and then final legislation.

It occurs to me that speculating about how the rules might work or be interpreted and suggestions about who is/is not liable is giving HMRC an insight into how to construct the next stages and plug gaps that they have not thought of.

I'm going to speak with some of my more IT literate colleagues and see if we can't put together a more private forum to discuss this issue, away from public gaze.

In the meantime, I shall stop speculating here and I would urge others to do the same.

if I can get a private forum together (any offers of help will be gladly accepted), I'll post joining details here.

For now though, I'm out of here.

[webberg]

They may not be around but the Trustees would be? I guess it is the same if a IR35 tax dispute came up in regards to a Ltd. company that has now closed? Can HMRC pursue it if the company has closed and still go after the Director?

In some instances, mainly close companies, yes.

A close company is one owned by 5 or fewer participators.

A participator is usually a shareholder with more than 5% or a person who with their connected parties can own more than 5%. Where that person is also a director, the chances of liability shifting to the individual increase.

[webberg]

They may not be around but the Trustees would be? I guess it is the same if a IR35 tax dispute came up in regards to a Ltd. company that has now closed? Can HMRC pursue it if the company has closed and still go after the Director?

Very unlikely that the Trustee could be the employer under the terms of Part 7A ITEPA 2003.

The intermediary agency is more likely but with 3 years notice of a massive tax bill, chances of them being around are close to zero.

That is why the Technical Note promises changes to who is liable for the PAYE liability (tax and NIC) where it "cannot reasonably be collected from the employer" [Chapter 4 para 13 of Technical Note].

What if the end client is the employer?

If HMRC make that stick and the client pays up, can that end client recover funds from you?