Member Since: 6th Aug 2011
3rd Aug 2018
And the last time we witnessed such bully boy tactics was when a certain small Austrian German said to his Polish counterparts if you don't do as I say I'll send in the tanks. Now that levelled a lot of playing fields!
3rd Aug 2018
I've now got an APN against my company which is disputed in its entirety but asking HMRC to internally review my matter is like watching paint dry. So the APN remains in place. I'm advised as a director I should call insolvency of my company as a result of the APN, the hell I will and why should I because I dispute the whole amount on what I see as 'reasonable grounds'. So the question is will HMRC do the dastardly deed, and did it do so on Psychic Sally - I don't know? If a creditor tries to enforce a disputed debt on a company it needs to go to court to prove it's debt to then serve relevant insolvency notice, so if HMRC can do this without having to go to court based solely on their own internal opinions how does that square with 'levelling the playing field' ? Me thinks David Richardson's playing field is slightly sloped towards HMRC and hardly level
6th Dec 2017
Neither can you be guilty just by association.
Her Majesty's Revenue and Customs take the easy option and work on wholesale decision making, whatever the individual affairs tell otherwise.
I was always informed the holding of money/companies the other side of the world in the likes of the Cayman Islands must smell before you open the package and should be avoided.
I wonder whether Her Majesty's Government will ask Her Majesty's Revenue and Customs to look closely in to Her Majesty's Cayman Island affairs seeing that association must mean guilt.
Surely HMRC could find a way for HMG to legislate in the next Finance Bill all loans/investments in such places constitute a 'relevant step' unless repaid/repatriated before 5/4/2019 ? Now that would get in a load of money for the treasury!
17th Jul 2017
With great respect making personal slights to what is a far wider ranging and very dangerous issue than just EBT schemes is I find unprofessional and before judging others you should take a good look at your contribution to this blog. If you don't have something serious to add then may I respectfully suggest you leave it alone.
Users, advisors and providers of many types of schemes now need to be extremely careful.
We have retrospective legislation, we have a U turn law change some 15 years after it was first challenged, we have HMRC unprepared to take Sempra any further which sent out a message in itself, and to wait so long for them to subsequently challenge a far more aggressive tax avoidance scheme leaves everyone in an extremely difficult position for far too long.
But not only that, in the interim it entraps people in to making decisions based on best advice they would otherwise not have made, and therefore end up with a huge and unnecessary tax bill. That cannot be right.
Neither can it be right that HMRC are now given carte blanche to issue Followers Notices which cannot be challenged. The next step I understand the Government are looking to, similar to some other EU countries, will be to allow HMRC to dip their hands in to tax payers pockets extract cash and ask questions later. This can lead to insolvency with no likely come back on HMRC and if you think that is not a very serious matter to debate then again with great respect I think you are very wrong.
There are far too many schemes where the facts are very different to Rangers and my attempt to argue based on my own experience, sadly doesn't appear to have resonated with yourself. Finding myself on the receiving end of all this, your comments are I find unworthy.
10th Jul 2017
Well after some 5 years of specialist tax advice on ebt's Ramsay, Dextra and Sempra and watching these court cases which even now seem absurd and which bounce from one rule to another, along with new Government legislation and coupled with HMRC's own views one has to wonder who in this world has such 'specialist and clear' advice. But yes I agree, it's just trying to get one's head around what has become a mess and where the law has entrapped me and possibly others in to a nightmare scenario. If the law had been clear at the start then we wouldn't all be in this mess and doubtless Rangers would not have had the opportunity to do what they did and screw it all up for the honest punters.
10th Jul 2017
That's interesting, thank you again Justin. I'm hoping this blog may raise contact with other ebt users who have largely similar problems as myself, and that we can join forces.
I have asked HMRC time and time again to show me exactly where I have gained personally by avoiding tax, they simply refuse to answer. I just can't see a single penny of benefit.
Originally Holding Company A (owned 100% by myself) loaned money on commercial terms to subsidiary Company B a property development company. Following concern in 2008 over group cross guarantees which involved other foreign trading subsidiaries and the banking crisis, the ebt arrangement was used for mainly asset protection reasons. The loans were repaid by subsidiary B to Holding company A, Company A then made a contribution to the ebt and the ebt made loans to Subsidiary company B again on commercial terms. There was no tax deduction in company A for the contribution and the asset sits on Company A's balance sheet (as an asset not under it's control according to UITF 32).
If I were to now extract funds from company B (either by way of dividend or earnings, and choose not to repay the EBT loans (why I would do this I don't know and it may even be illegal under Corporate Law) then tax will be paid on the extraction. If I repay the ebt loans and extract money personally from the ebt thereafter tax will be paid at that time. Assuming all the money is to be paid to myself which isn't a foregone conclusion to draw in any case. It seems HMRC are saying "aha we can see there are taxed profits sitting in either Company A, the ebt or Company B, but what we plan to do is say the funds sit in personal hands' so hand over 60.8% and do it now.
10th Jul 2017
For some strange reason though they failed to make a determination on the following 2009 contribution so for a part of it they are out of time. Seems maybe they didn't have enough qualified staff in 2009.
10th Jul 2017
Thank you Justin, unfortunately HMRC made an in time determination for the large part of the 2008 ebt contribution which we've been arguing incessantly for sometime. HMRC's main argument being "the loans will never be repaid" even though HMRC accept the long term nature of the property development project all the funds were ultimately invested in. The property is now up for sale and only after a successful sale (hopefully at full value and before 5/4/2019) can the loans be physically repaid in cash to the ebt.
9th Jul 2017
AnnAccountant Sorry did not see this earlier post, but you'll gather there was no CT deduction so other than IHT and asset protection there has been and never was there any intention to gain tax benefit (fair or unfair given the new rule of law on 'aggressive tax avoidance schemes'). I agree greedy and aggressive tax avoiders should be brought to account, even less aggressive tax avoiders should too, but when you have gained nothing and have not tried to gain anything but are treated like a pariah and no one wants to listen or allow you right to adjust your affairs it all seems particularly unfair,
9th Jul 2017
I agree that using EBT's to permanently extract profits to an individual to not pay paye/nic and claim a CT deduction in the company to boot is crass. In my case I did not claim a CT deduction in the company because it was not an earnings payment for my 'personal' benefit. If I own two companies and company A lends company B money (on commercial terms) then there is no charge to tax - agreed ? But if I were to contribute those same funds to a trust for the trust to lend money to company B why should that now result in a 60.8% paye/nic charge?
At the time of making the contribution the law did not say that a contribution to a trust would result in a paye/nic charge and had the law said that, I would be nuts to have made such a transaction.
For the law and HMRC to now retrospectively (nearly ten years later) say that by making such a transaction it is subject to a 60.8% tax charge and not allow me or anyone else using ebt's the right to put back the funds either in to the trust itself or reverse the whole transaction so that it became a direct loan from Company A to Company B to avoid this new charge, is simply wrong.
Every single tax payer in this country is allowed to carry out their affairs to reduce their tax bill, that is their right, and I beg to suggest that I and others are being denied our rights to fairly conduct our affairs. The law and HMRC should allow ebt users a 'reasonable time' to repay their loans not to retrospectively impose a hefty tax on the crass supposition the loans will never be repaid. Indeed isn't that what the FA 2017 was considering? I assume that's now out of the window as HMRC can have a field day without need of that legislation.
At the end of the day, a loan is a loan and that is what this is all about. I am more than happy to repay the loan, the assets exist that support the loan, they are not owned by me personally and can in time be liquidated.
I am sure there are plenty of other ebt users that are in a similar position to myself and just because a few underhand footballers and football club owners tried to get away with it (and indeed have as Rangers nor their players and ex-players will ever have to pay) should not impose unfair taxes on me or anyone else.
I reiterate my earlier argument on the morality angle. Imagine if you will you have a pension fund, I am sure like everyone you do , either personal or company based, you will have invested in that fund over many many years (and I am sure gained legitimate tax benefits as a result), then on the day you retire HMRC turn up at your door and take 60.8% of that fund, even though you have not extracted it for your own personal benefit on day one! That is the exact position I and others are faced with as a result of this judgement.