Reply to: More EBTs in Tribunal

[Fred Bloggs]

Following the DTA retrospective change in 2008, the courts ruled that the government can make any law they want when they want to.

An odd thing to say really. I mean, they are the government. The government make whatever law they like. If the court deems anything unlawful the government can change the law so it is. Seems a statement of the obvious to me, especially since we will soon be making all our own laws again post Brexit.

[jbryce]

Hi, I listened to the Webinar and I thought this subject was raised in the Q&A. I understood that HMRC said that although the responsibility has been deemed to be the employers it did not say it was NOT the responsibility of the employee. So I guess they see both as responsible should it suit them.

Indeed, although in this case, the employer knew where the cash was going and had insisted that all PAYE was covered.

[Clairol]

From the long pause in the HMRC webinar last week and the subsequent "the decision was wider than we expected and we're still thinking about it" response, I suspect that HMRC is struggling.

I suspect you are on the right lines about HMRC initially thinking that a decision that the sums are taxable was what they wanted.

However they won big but that means probably that the employer is responsible and many of those have disappeared forever, leaving HMRC with a lot of egg on face. I think PAC will be very interested.

Hi, I listened to the Webinar and I thought this subject was raised in the Q&A. I understood that HMRC said that although the responsibility has been deemed to be the employers it did not say it was NOT the responsibility of the employee. So I guess they see both as responsible should it suit them.

[BrilloPad]

HMRC spend a pile of cash to win in the SC and then decide it doesn't suit their purpose so they try and get HMG to change the law to suit another interpretation?
How are the courts going to see that?
What is the point in giving any ruling, if HMG just changes the law to suit HMRC's whim?

Following the DTA retrospective change in 2008, the courts ruled that the government can make any law they want when they want to.

[Iliketax]

HMRC spend a pile of cash to win in the SC and then decide it doesn't suit their purpose so they try and get HMG to change the law to suit another interpretation?

Contractors are a subset of the entire population of people who got loans. On average, I'd say that the loans to a contractor were on the smaller side (e.g. compared to an investment banker, fund manager, footballer or owner-managers). Many have settled but not all. So there is a very large population of people out there who have a solvent employer who is now going to have to stump up the PAYE/NIC when the follower notices come out.

Some schemes had the employer put cash into the trust knowing who was going to get the cash. In others they did not. In others the employer bought a "pre-funded" EBT and then it made loans. In those last two cases, why does Condition B of regulation 81 of the PAYE regs not apply to transfer the PAYE liability to the employee?

I'm also not clear why people say it does not suit HMRC's purpose? I've not discussed this with them, but they have many purposes and where there is a solvent employer it works well for them. The width of the decision works well too (e.g. if someone got paid via a contract for difference - which is probably not a contractor thing). Also, it (together with UBS) has a huge deterrent effect. So while it may or may not help on a relatively small aspect, it would seem to suit them very well from a big picture perspective.

[jbryce]

HMRC spend a pile of cash to win in the SC and then decide it doesn't suit their purpose so they try and get HMG to change the law to suit another interpretation?
How are the courts going to see that?
What is the point in giving any ruling, if HMG just changes the law to suit HMRC's whim?

[ChimpMaster]

From the long pause in the HMRC webinar last week and the subsequent "the decision was wider than we expected and we're still thinking about it" response, I suspect that HMRC is struggling.

I suspect you are on the right lines about HMRC initially thinking that a decision that the sums are taxable was what they wanted.

However they won big but that means probably that the employer is responsible and many of those have disappeared forever, leaving HMRC with a lot of egg on face. I think PAC will be very interested.

... which takes us to the next stage of the battle, 2019, and HMRC's anticipated attempt to pass liability from employer to employee.

[webberg]

I don't know if HMRC are happy with the final result but the bit they really cared about was the decisions in the initial tribunals that tax should have been paid - and that was the actual purpose of these tribunals were EBT payments subject to income tax or not - final answer yes they are...

From the long pause in the HMRC webinar last week and the subsequent "the decision was wider than we expected and we're still thinking about it" response, I suspect that HMRC is struggling.

I suspect you are on the right lines about HMRC initially thinking that a decision that the sums are taxable was what they wanted.

However they won big but that means probably that the employer is responsible and many of those have disappeared forever, leaving HMRC with a lot of egg on face. I think PAC will be very interested.

[webberg]

and what does any of that have to do with the nonsense you're posting on yet another thread just to get at me.

and the decisions in the initial tribunals found that tax did not have to be paid, that the sums involved were loans. you're having a nightmare today!

Not quite.

The decisions in earlier stages were that the sums were not employment income and as such tax could not be collected via a PAYE assessment (Reg 80 determination).

In the decisive hearing at the Supreme Court, the Judges held that the amounts paid by Rangers FC were employment income and could be collected via the Reg 80. You should note that the Murray Group companies that were part of the process in earlier stages pulled out before SC and presumably have settled with HMRC - who knows.

The reports published by the liquidators show that they had substantial sums and the assessments would have been lodged as creditors many years ago. I very much expect HMRC to walk away with the majority of what they want.

What is potentially more interesting is whether the companies were able to reclaim money from the EBT via a tax indemnity clause and if so, does that mean that the EBT can seek repayment of their loans to pay that indemnity?

I don't know.

It might also be interesting to see if the liquidator has grounds to go against those who designed and implemented the scheme. Again, I have no information on that.

[FakeHorizon]

I don't know if HMRC are happy with the final result but the bit they really cared about was the decisions in the initial tribunals that tax should have been paid - and that was the actual purpose of these tribunals were EBT payments subject to income tax or not - final answer yes they are...

and what does any of that have to do with the nonsense you're posting on yet another thread just to get at me.

and the decisions in the initial tribunals found that tax did not have to be paid, that the sums involved were loans. you're having a nightmare today!

[eek]

have you ever heard that saying about how it's best to stay quiet and only let people think you're a fool, rather than keep talking and confirm it? do you also think HMRC wanted the decision they got, that the company is responsible? you don't think they wanted a decision which allowed them to go after scheme users, who are the easier targets

I don't know if HMRC are happy with the final result but the bit they really cared about was the decisions in the initial tribunals that tax should have been paid - and that was the actual purpose of these tribunals were EBT payments subject to income tax or not - final answer yes they are...

[FakeHorizon]

why and how would they have £20m to distribute?

have you ever heard that saying about how it's best to stay quiet and only let people think you're a fool, rather than keep talking and confirm it? do you also think HMRC wanted the decision they got, that the company is responsible? you don't think they wanted a decision which allowed them to go after scheme users, who are the easier targets?

[FakeHorizon]

You actually want to take a random commentary from the internet and publish it as 'fact' on here??

From the bottom of your article...
"Case:

(1) MURRAY GROUP HOLDINGS LTD; (2) MURRAY GROUP MANAGEMENT LTD; (3) THE PREMIER PROPERTY GROUP LTD; (4) GM MINING LTD; and (5) RFC 2012 PLC (in liquidation) (formerly The Rangers Football Club PLC) "

So it wasn't just Rangers FC, it was Murray Group as well. What role do you think David Murray had at Rangers FC which saw him earn £6m from EBTs alone? I have to say whilst I find your childish behaviour incredibly amusing, all it's doing is deflecting from the adult discussion at hand.

[eek]

i'm incorrect and wrong? maybe you need to control your rage and do a bit more research before making a fool of yourself chasing someone around a forum, as if what you're claiming is true and Rangers paid all the money into the EBTs, then the liquidators of that company have over £20m to distribute to creditors, including HMRC

why and how would they have £20m to distribute?

[eek]

i'm incorrect and wrong? maybe you need to control your rage and do a bit more research before making a fool of yourself chasing someone around a forum

Yep - show me documentation that contradicts what I linked to and shows (as you claimed) that the money in Rangers' EBT came from more places than just Rangers Football club....