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Amazing HMRC loan charge audacity

https://www.parliament.uk/documents/lords-committees/economic-affairs/Govt%20HMRC%20Powers%20report%

They use Dawn Primarolo's 2004 warning statement to justify it, yet overlook the fact that they did nothing for around 15 years after that re this apparently grossly abusive tax avoidance scheme that they knew all about well before 2004! See:

 https://www.parliament.uk/documents/lords-committees/economic-affairs/Go...

https://ion.icaew.com/taxfaculty/b/weblog/posts/house-of-lords-report-on...

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By Mr_awol
12th Feb 2019 11:47

'apparently' abusive?

I actually have a small amount of sympathy for some of the people caught up in this mess - rather less for the crooked advisors who pedalled the schemes. I'm struggling, however, to see how anyone could dispute that these schemes were artificial and abusive.

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to Mr_awol
12th Feb 2019 12:38

If that is correct how can you explain why HMRC did nothing about this so-called highly abusive & aggressive artificial tax avoidance planning for approximately 2 decades (HMRC normally (if not invariably) block such schemes immediately they become aware of them and often retrospectively)?

If that's right, the only sensible explanation is that HMRC have been utterly incompetent for all that time, which is hard to believe even for them.

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to Justin Bryant
12th Feb 2019 13:20

Well as I recall HMRC did not routinely shut these things down at the time, this is a much recent thing in the past 5 years.

The beauty of this one, is by converting income into a loan (and hence temporality avoiding tax) the loan still exists, so HMRC have all the time in the world to deal with it.

Of course competent advisors would have explained the risks to their clients of taking an open ended loan, in terms of changes to future taxation rules on the open loan, so its the client's fault if they have spent the cash rather than putting it into investments which can be easily cashed out to pay the tax bill when the rules changed, which would have been the prudent advice.

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to Justin Bryant
12th Feb 2019 14:13

Justin Bryant wrote:
the only sensible explanation is that HMRC have been utterly incompetent for all that time, which is hard to believe even for them.

I don't find that hard to believe at all, Justin.
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By Mr_awol
to Justin Bryant
12th Feb 2019 14:55

HMRCs 'apparent' inaction against the scheme is not the same as some sort of 'apparent' endorsement of it.

In any case, the longer these 'loans' have gone on without repayment, the more artificial they are - by definition, a loan is expected to be repaid.

Anyone who went into this eyes open deserves all they get - along with the snake oil salesmen who helped them. There are a number of people who, whilst motivated by greed, probably didn't understand how abusive the schemes were, and it is those that I have mild sympathy for.

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12th Feb 2019 13:42

Pt 7A dates back to 2011. Rangers, as I recall, was decided largely on rules from before then.

Two decades? And you say HMRC is disingenuous!

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to Tax Dragon
12th Feb 2019 14:27

I knew someone would say that and EBT loan planning has been around since the late 1980s & early 1990s - just ask PB-W. In any event P7A & Rangers do not answer my above point do they? I recall having to explain all this to you before, so I will end there.

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