LC Review - Ambiguity for Ltd/Director arrangements

[DealorNoDeal]

The problem with putting anything to HMRC is that their default position is biased to benefitting them - that you are caught, unless you can prove otherwise.

True. And, in this case, it's a real long shot.

Without a DOTAS number on the returns, I think you'd only stand a chance at a tribunal if the returns contained either:

a) a declaration in the white space that an avoidance scheme had been used
or
b) a declaration in the white space that you received £x in (interest free) loans

Over the past 10 years, I doubt many promoters had their clients put anything like this on their returns.

[RickG]

However, if you feel you have grounds that there was adequate disclosure, you've got nothing to lose by putting this argument to HMRC.

The problem with putting anything to HMRC is that their default position is biased to benefitting them - that you are caught, unless you can prove otherwise.

I refer to webberg's posts saying similar with his vast experience of dealing with HMRC:

Are your loans within the definition?

HMRC will say "yes" but without giving it any thought at all. They consider that the few hundred words of legislation is enough to capture every nuance of every one of the (claimed) 250+ schemes they know about.

Really?

For example, some schemes feature loans direct from an employer without the initial involvement of a third party. Hard to see how that fits the definition in section 554A(1)(d).

https://www.contractoruk.com/forums/...ml#post2707629

[DealorNoDeal]

Catch 22

For any post-2010 closed years...

The fact that the year is closed, means HMRC didn't open an enquiry or raise a discovery.

In the majority of cases, this would have been because there wasn't much info (if any) on the tax return. (Had there been something obvious like a DOTAS number, they would have have pretty much automatically opened an enquiry).

Therefore, in most cases, it's unlikely there would have been sufficient disclosure to now fall outside the scope of the LC.

However, if you feel you have grounds that there was adequate disclosure, you've got nothing to lose by putting this argument to HMRC.

[DealorNoDeal]

From the govt response to the LC review:



DOTAS schemes used through Ltd structures had to be fully declared - however, not on an individuals SA. Does this or does this not then count as "reasonable disclosure"?

HMRC will probably argue that it's the sufficiency of the disclosure by you, the taxpayer, that counts.

They're unlikely to concede this point, so you'd have to take it to a tribunal to decide.

[RickG]

From the govt response to the LC review:

Unprotected Years arising from loans entered into on or after 9th December
2010, where the relevant taxpayer made reasonable disclosure of their scheme
usage to HMRC and HMRC did not open an investigation, should be out of scope of
the Loan Charge (subject to recommendation 5 below). Other Unprotected Years
should remain in scope of the Loan Charge. This will ensure that taxpayers do not
benefit from failing to disclose their tax affairs to HMRC. The approach to defining
“reasonable disclosure” should build upon HMRC’s ordinary compliance approach in
considering the extent to which a Se

DOTAS schemes used through Ltd structures had to be fully declared - however, not on an individuals SA. Does this or does this not then count as "reasonable disclosure"?