Reply to: Draft FAQ - pre-2010 loans

[DealorNoDeal]

Bumping this because some people haven't seen it.

[DavidA]

Further evidence that HMRC deemed the year closed.

I'm pretty confident you'll get the whole amount back.

Well that would be nice. I'll post again when I have some news.

[DealorNoDeal]

After some back and forth with the HMRC the figure was revised to £160K because the National Insurance contributions should have been paid by my employer, plus the interest was waived because it was classed as voluntary restitution according to emails I received from HMRC. I paid it in October.

Further evidence that HMRC deemed the year closed.

I'm pretty confident you'll get the whole amount back.

[DavidA]

Thanks for all the responses. My paperwork is somewhat lost in the sands of time because I left the company that issued the EBT loan and then it went into liquidation. I understand the EBT scheme was being queried with the company before it went into liquidation. The next i heard was a letter in December 2018 titled Tax Avoidance and the Loan Charge, which told me I needed to pay the loan back or pay tax on it. Nothing about Accellerated Payment Notice as far as I can see. Although not quoted in the letter, when I gave them details of the scheme they told me I owed £250K. My advice from three tax advisers, including Qubic who set up the scheme, was that it would need to be paid.

After some back and forth with the HMRC the figure was revised to £160K because the National Insurance contributions should have been paid by my employer, plus the interest was waived because it was classed as voluntary restitution according to emails I received from HMRC. I paid it in October.

When I saw the news that the loan charge was successfully challenged I spoke to them on the phone. As someone said above, they were trying to make sense of the results of the review and didn't want to give me an answer as they had yet to process the implications. That sounded like it would take a few weeks and whatever was decided would be put into law in the summer. The guy I was speaking to was helpful but ultimately I don't think anyone at HMRC has all the answers yet.

[DealorNoDeal]

DavidA can't have received an APN because it was a closed year settled by voluntary restitution and, besides, he did say "I'm not sure what an APN is". I think you'd know what an APN was if you'd ever received one!!!

I think, in his situation, all he should do is sit tight and wait to see if HMRC provide a refund.

[lowpaidworker]

If I recall correctly, HMRC won but the tax liability was judged to be owed by the employer and not the employee. So not really a win. If HMRC win a case that they judge to be similar enough to your scenario then they would issue Follower Notices and not APNs.

Agree that you should get the person on the phone to confirm everything in writing.

true re the case or ruling. Again I am not an expert. However HMRC can transfer the liability to the tax payer.

in my case I was issued an APN for the EBT. Might be the two are not connected.

[NeedTheSunshine]

Interesting. EBTs basically lost at the Rangers case. If it was EBT I would imagine you had a DOTAS scheme number which allowed HMRC to issue an APN and collect post Rangers. Whilst APN does not mean settlement it means HMRC won the case and therefore you owe them and its not 'voluntary restitution'. Your 09/10 situation sounds like my Edge EBT. I paid the APN four years ago when Rangers lost in 2015 and to be honest I dont expect HMRC will pay me back. I'd be careful what some HMRC trolly dolly on the phone says to you about a refund or even a latter as HMRC are allowed to say whoops screwed up thats wrong.

TBH I dont think even the learned of HMRC front line staff have a scoobie whats going on right now based on a call I had a few days ago. If the money you paid is significant I'd seek advice per above and ask an Advisor if you really are due a refund. If its not sit tight and prey. I honestly doubt it if it was an EBT HMRC will pay anything back

If I recall correctly, HMRC won but the tax liability was judged to be owed by the employer and not the employee. So not really a win. If HMRC win a case that they judge to be similar enough to your scenario then they would issue Follower Notices and not APNs.

Agree that you should get the person on the phone to confirm everything in writing.

[lowpaidworker]

Thank you.

HMRC wrote to me querying a payment in calendar year 2009. Which under your definition sounds like Open (protected) by your definition, but HMRC have described it as 'voluntary restitution'. To quote:



Do you understand what's happening there? Advice very much appreciated.

Interesting. EBTs basically lost at the Rangers case. If it was EBT I would imagine you had a DOTAS scheme number which allowed HMRC to issue an APN and collect post Rangers. Whilst APN does not mean settlement it means HMRC won the case and therefore you owe them and its not 'voluntary restitution'. Your 09/10 situation sounds like my Edge EBT. I paid the APN four years ago when Rangers lost in 2015 and to be honest I dont expect HMRC will pay me back. I'd be careful what some HMRC trolly dolly on the phone says to you about a refund or even a latter as HMRC are allowed to say whoops screwed up thats wrong.

TBH I dont think even the learned of HMRC front line staff have a scoobie whats going on right now based on a call I had a few days ago. If the money you paid is significant I'd seek advice per above and ask an Advisor if you really are due a refund. If its not sit tight and prey. I honestly doubt it if it was an EBT HMRC will pay anything back

[DealorNoDeal]

Thank you.

HMRC wrote to me querying a payment in calendar year 2009. Which under your definition sounds like Open (protected) by your definition, but HMRC have described it as 'voluntary restitution'. To quote:



Do you understand what's happening there? Advice very much appreciated.

Maybe the person, who is now dealing with it, isn't aware of the "payment query" whatever that was.

I'd just leave them to it and keep your fingers crossed that you get a refund.

[DealorNoDeal]

100% clear from the current loan charge, right?

Yes, but also very difficult for HMRC to re-open.

[ChimpMaster]

I'm something of a newbie to this and this FAQ is useful. I've been working my way through the government website's section on the Loan Charge, which would be a good thing to link in the FAQ.

I don't really understand what open (protected) and closed (unprotected) means. How do I found out? When I spoke to the HMRC they used the same terms and I didn't understand. I'm not sure what an APN is.

In my particular case, I received disguised remuneration in the form of an Employee Benefit Trust in 2009. I settled and paid with 'voluntary resititution' last year, which I understand means that I gave them all the information and settled voluntarily. I think that means I'm due a refund but the HMRC are telling me they're still looking into it.

One thing that I found out was that the Independent loan charge review will need to be passed into law before anyone gets repaid, which is scheduled to be sometime this summer.

For your loan in 2009, did HMRC ever send you an Enquiry or Discovery letter? If so, then the year is Open and HMRC can challenge you for the tax on it.

Seriously, speak with a tax advisor who can help you get the refund, if it is due. I am frankly shocked that you didn't have an advisor already, given that you went through settlement, not even knowing what open/closed years mean.

[PeterF]

Q2) What about closed (unprotected) years prior to 2010?
A2) These are now 100% in the clear.

100% clear from the current loan charge, right?

[DavidA]

Thank you.

HMRC wrote to me querying a payment in calendar year 2009. Which under your definition sounds like Open (protected) by your definition, but HMRC have described it as 'voluntary restitution'. To quote:

I have reviewed the settlement calculation and noticed that the tax due relates to the tax year 2009-10 which we consider to be due under what we term as ‘voluntary restitution’. If you look at the PAYE input sheet on the calculation the column says ‘yes’ under the heading voluntary restitution, this relates to the PAYE tax due.

Do you understand what's happening there? Advice very much appreciated.

[DealorNoDeal]

Open (protected) means HMRC wrote to you, after you filed your tax return, opening an enquiry or raising an assessment. If the scheme was registered under 'DOTAS', they could also issue an APN for an open year, making you pay the tax immediately.

Closed (unprotected) means HMRC didn't open an enquiry or raise an assessment.

The term 'voluntary resititution' only applies to closed years. If you settled a closed year, you will be due a refund.

[DavidA]

I'm something of a newbie to this and this FAQ is useful. I've been working my way through the government website's section on the Loan Charge, which would be a good thing to link in the FAQ.

I don't really understand what open (protected) and closed (unprotected) means. How do I found out? When I spoke to the HMRC they used the same terms and I didn't understand. I'm not sure what an APN is.

In my particular case, I received disguised remuneration in the form of an Employee Benefit Trust in 2009. I settled and paid with 'voluntary resititution' last year, which I understand means that I gave them all the information and settled voluntarily. I think that means I'm due a refund but the HMRC are telling me they're still looking into it.

One thing that I found out was that the Independent loan charge review will need to be passed into law before anyone gets repaid, which is scheduled to be sometime this summer.