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Retrospective tax imposed on contractors’ loans

29th Mar 2016
Tax Writer Taxwriter Ltd
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A proposal to impose a retrospective tax on contractors’ loans has been branded deeply unfair.

Buried within the Budget documents released on 16 March was a technical note on tackling disguised remuneration avoidance schemes. The retrospective tax charge is hidden in chapter 5 paragraph 10 which is titled: “A new charge on outstanding disguised remuneration loans”.

This outlines how income tax and NIC will be imposed on employee loans which are outstanding on 5 April 2019, irrespective of when the loan was advanced to the employee or individual. This means the new tax charge could be imposed on loans which were advanced decades ago.

Disguised remuneration loans come in two common forms:

  • Employee benefit trust (EBTs) loans – used by company owners to extract large balances from their own companies without paying high levels of income tax;
  • Contractor loans - where an individual receives a loan and a small salary from an “employer” which was usually based offshore.

In both cases the loans were repayable but were usually never actually repaid. The employee is taxed on the benefit in kind of receiving an interest free loan, which amounts to 3% to 4% of the loan (depending on the official rate of interest in the tax year), for the duration of the employment.

Schemes involving EBT-type loans have been circulating since the 1980s, and contractor loans have been in common use since 2000. HMRC maintain that these arrangements do not work. However, there must be a considerable chance that they do. Very few of those schemes have been taken to the tax tribunal, and when HMRC have won a case they have generally done so on technicalities concerned with the implementation. New tax rules to stop disguised remuneration were introduced from 9 December 2010 and 6 April 2011 (ITEPA 2003, Part 7A).

Contractor loans have been subject to challenges in the tax tribunals, for example P Boyle v HMRC TC03103, where the contractor lost, although HMRC tend to only take cases to tribunal when they expect to win.

HMRC has offered settlement opportunities for those who took up EBT or contractor loan schemes, which required the individuals to who agreed to pay PAYE and NIC on all the loans they received. HMRC has also issued a spotlight on contractor loan schemes, so no-one can be in any doubt that HMRC doesn’t approve of contractor loans and it’s doing everything in its power to neutralise the schemes that used such loans to avoid tax.

Those who used contractor loans but who haven’t taken up a settlement opportunity are now receiving accelerated payment notices (APN) where their tax return is under enquiry. The APN is often based on estimated figures as HMRC don’t know exactly how much loan was advanced, so are guessing at six times the contractor’s salary.

The issue of an APN forces the taxpayer to pay the tax demanded as the APN can’t be appealed. If the tax is not actually due, the taxpayer has to force HMRC to conclude their enquiry by going to tribunal – which is clogging up the tax tribunal system.

The proposed tax charge will be imposed on an outstanding loan if income tax has not been paid on that loan (even where income tax wasn’t due under the tax law in place when the loan was advanced). The new charge won’t be imposed if the taxpayer has reached a settlement with HMRC, or otherwise paid tax on the loan as if it was salary. 

David Kirk, an expert on employment taxes, said: “HMRC have for a number of years made it plain that they will not tolerate tax avoidance in this area. However, they have often been very slow to act in practice, and this has left people with the feeling that they had dropped their cases. Whilst the Government has every right to change the rules, I do have concerns about four particular things with this proposed tax charge:

  1. “The tax can be raised on historical loans of any age, so it could relate to actions taken over 20 years ago.   
  2. The records relating to historical loans will often be lost and are difficult to reconstruct.
  3. Individuals were often sold the loan schemes by IFAs and accountants, in some cases quite aggressively. There is consumer protection law to assist victims of this sort of miss-selling when it comes to investments; however in this case HMRC seem to be going for the victims instead of the real culprits.
  4. The tax charge should fall on the employer, but it will be transferred to the employee/contractor."

Kirk concludes that many former contractors will be made bankrupt by this new tax charge, or if not made bankrupt will lose their homes.

He also says the charge is deeply unfair as in many cases the tax was not payable under the law that existed when the loan was advanced (pre December 2010), so the taxpayer should win their case if they could get a hearing at the tax tribunal. Under the proposals such taxpayers will have to pay the tax on the outstanding loan even if they do win their case at the tax tribunal.   

David Kirk's book: Employment Status - the Tax Rules is now in its third edition. 

Replies (559)

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By ShirleyM
08th Apr 2016 15:22

Have it your own way

gordo wrote:
You are wrong. Plain wrong and the Courts have told you so. What will it take?

Retrospective tax, illegal tax ... I've heard it all, and I know the tax dodging loopholes will be closed ... eventually. So 'frankly, my dear, I don't give a damn'.

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By gordo
08th Apr 2016 15:11

Black Night

Which schemes have gone to tribunal and lost? Please list.

Also which Accountancy Firms have gone bust? Please list.

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By The Black Knight
08th Apr 2016 15:27

google

gordo wrote:
Black Night Which schemes have gone to tribunal and lost? Please list. Also which Accountancy Firms have gone bust? Please list.

 

I'm sure you can do a google search and a search on accounting web.

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By Vaughan Blake1
08th Apr 2016 16:25

Didn't Rangers lose?

gordo wrote:
Black Night Which schemes have gone to tribunal and lost? Please list. Also which Accountancy Firms have gone bust? Please list.

In their last fixture against HMRC.

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By justsotax
08th Apr 2016 15:32

gordo....are you the

QC who gave the advice...?  I had to ask...

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By gordo
08th Apr 2016 15:38

ShirleyM

Yes we understood that you don't care.

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By ShirleyM
08th Apr 2016 15:50

I did ....

gordo wrote:
ShirleyM Yes we understood that you don't care.

... and still do, but my head is aching with all the banging against that brick wall. I'll leave HMRC and the courts to explain it all to you.

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By ringi
08th Apr 2016 16:18

I had companies trying to sell me that sort of setup.

I was an IT contractor at the time.

But it was clear to me; it was just a way to avoid paying tax by laying about what is going on, so I did not go for them.    It is about time that people with enough brain power to work in high paid employment realised that artificial arrangement are not valid!

As to IR35 it has worked better them most people think, as at the time lots of nurses, teaches etc where planning to use limited companies, and it stop it happening.   Also lot of IT contractors started to pay themselves higher wages without ticking the “IR35 box”.    Therefore the effect of IR35 is impossible to tell just by looking at how much tax it brought in directly.

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By gordo
08th Apr 2016 16:45

Vaughan

You are correct, but It is next goals the winner. Golden goal so to speak (it is to be heard by the Supreme Court).

If HMRC really expected to win then they would not have need of any new powers would they.

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By ShirleyM
08th Apr 2016 16:56

Maybe so, but .....

gordo wrote:
If HMRC really expected to win then they would not have need of any new powers would they.

The new tax on outstanding laws could achieve three different outcomes:

It shows the determination of HMRC. If they can't get tax on the income, they'll get it on the artifical loans.It puts an end to new and current 'loan' avoidance schemes, as the tax benefit of non-repayable loans has been removed.It will save a lot of wasted time and money going through the courts for each individual scheme.

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By gordo
08th Apr 2016 17:16

ShirleyM

That would be great, except...

Except it would mean that HMRC are taxing people at 5th April 2019 on something the Courts had just told them wasn't taxable!

If you think that's right then your job is with HMRC

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By cfield
08th Apr 2016 17:56

Injustices do not have to remain injustices

gordo wrote:
ShirleyM That would be great, except... Except it would mean that HMRC are taxing people at 5th April 2019 on something the Courts had just told them wasn't taxable!

The courts have no choice but to apply the law as it stands. Morality doesn't come into it, whoever the injured party is. If you go to court, what you get is the law, not fairness (unless the 2 happen to coincide and it's a happy accident if they do).

But does that mean injustices have to remain injustices for ever? Of course not. Most sensible people realise that these arrangements are a total sham, even if somehow some very clever people (too clever by half in my opinion) have managed to get them on the "right" side of the law. As such, it's only right and proper that the law should be changed to recognise the sham they really are.

If the promoters had found some way of treating this income as taxable at lower rates, or in a different jurisdiction, or as gains rather than income, then it would have been safe from changes in the law since it would already have been taxed, but no, they had to call them loans. That was their Achilles heel. They were always a hostage to fortune as a loan continues to exist (indefinitely in some of these cases) and is thus vulnerable to changes in the law. To suggest that existing loans should be exempt just because they were legal before is pure hubris.

The same risk applies to other areas of tax planning. Take Entrepreneurs Relief for instance. We often advise clients to save up all their retained profits and pay tax at 10% on a liquidation rather than 32.5% on dividends. But what if the ER rules change so this can't be done any more? There have already been changes aimed at phoenix companies, and "moneybox" companies have always been a bit of a grey area. The difference is that we warn our clients about these potential changes and uncertainties so they can take a known risk. The promoters of these schemes obviously didn't. Maybe they didn't want to put them off and lose the fees!

 

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By Vaughan Blake1
08th Apr 2016 17:23

The wheels of justice move slowly

I read somewhere that the next fixture won't be until the latter part of 2017.

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By ShirleyM
08th Apr 2016 17:32

It happens

I suppose lots of Directors had outstanding loan accounts when s455 tax (or s419 it's predecessor) was brought in. It has passed every test so far.

My 'job' is to guide clients and help them reduce tax legally, not evade it through artificial means which will end up in tears, as you have discovered.

The HMRC comment is another non-argument!

EDIT: You've got a further 3 years before you pay the avoided/evaded tax, and 3 years to get it sorted.. How long would you like?

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By gordo
08th Apr 2016 17:31

Vaughan
I reckon kick-off will be later part of this year, but I don't know for sure and it would difficult to tell when full time might be.

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By Old Greying Accountant
10th Apr 2016 09:53

Seems to me ...
... This is just aligning the law so all loans are treated as per s455.
I feel sorry you have been sold a turkey, but if your advisors were qualified professionals, even if the firm has gone they should have run-off PI cover.

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By gordo
09th Apr 2016 12:21

cfield 

Do you know for a fact that none of the Promoters warned clients of the potential risks or are you just making an assumption?

Income and Gains are taxable, loans aren't. How do you make loans out to be taxable! How do you make some loans out to be taxable and some not? You are driven by what you would like the legal effect to have been at the time the legal event took place. To change the legal tax effect is retrospective.

I am surprised at some qualified Accountants willingness to give up the law. The contractors acted within the law as it stood at the time, under advice. HMRC are acting outwith the law and advocating abandoning a basic tenant of the law, and you are condoning their behaviour 

HMRC want to make themselves judge, jury and executioner. As qualified Accountants we should know that would not be a smart move.

If HMRC really believed that their proposals will become law in April 2019 then why spend taxpayers money in pursuing Rangers FC and others through the Courts and Tribunal system and why continue to cause untold stress and misery pumping out APN's having told Parliament that they would only issue them in specific circumstances? Why issue APN's on individuals (as opposed to the Employer) when they know they would not argue the same grounds in Tribunal or Court? 

There is only one reason. We are all being played. We are being sold to and some have bought it.

If enough people buy it, then they might just get their wish to become judge, jury and executioner in this test arena, but then who is next on their list?

Never mind, go back to work, go back to the office, we need your taxes to pay the interest on the loans we have run up as a result of overspending, which we know we can never repay. Your loans are taxable though.

Behavioural Psychology, as a tool, can really help people who are in a dark place by helping them either find certainty or at least stop creating false uncertainty in their own minds. I'm appalled and ashamed to see it used on Society as a club.

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By cfield
09th Apr 2016 14:17

A point-by-point answer

gordo wrote:
Do you know for a fact that none of the Promoters warned clients of the potential risks or are you just making an assumption?

We already know some of the punters weren't warned because they've come on this forum and said so themselves. I feel slightly sorry for them as they were plainly misled, even though they should have smelt a rat and looked into it further. Anyone who was warned I don't feel sorry for at all.

gordo wrote:
Income and Gains are taxable, loans aren't. How do you make loans out to be taxable! How do you make some loans out to be taxable and some not?

I don't make loans out to be taxable. I make arrangements that pretend to be loans out to be taxable, and so will the courts soon.

gordo wrote:
You are driven by what you would like the legal effect to have been at the time the legal event took place.

So are the Government. That's why these new rules are coming in. So do most right-thinking, fair-minded people. That's why we applaud them.

gordo wrote:
To change the legal tax effect is retrospective.

No it isn't. We've already told you that umpteen times. It will only apply from 6/4/19 on so-called loans that still dare to show their face then. If it was really retrospective, any such arrangements that managed to get past the courts would be taxable with effect from the date they were created, so there would be interest and penalties as well. It only looks retrospective if no loan repayments have been made. Any such repayments will not be taxable.

gordo wrote:
I am surprised at some qualified Accountants willingness to give up the law.

But this will be law.

gordo wrote:
The contractors acted within the law as it stood at the time, under advice. HMRC are acting outwith the law and advocating abandoning a basic tenant of the law, and you are condoning their behaviour

Do you mean a basic tenet? I'm not condoning illegal tax demands by HMRC at all, but as I understand it, an APN is only issued if HMRC believe that the law has already been broken and tax evasion has taken place.

gordo wrote:
HMRC want to make themselves judge, jury and executioner. As qualified Accountants we should know that would not be a smart move.

No doubt they do, which is why they have to be kept on a tight rein, but this law will need to go through Parliament the same as any other law and any cases brought under it tested in the courts, so HMRC will only be acting as policemen and prosecuters, not as the ultimate judges.

gordo wrote:
If HMRC really believed that their proposals will become law in April 2019 then why spend taxpayers money in pursuing Rangers FC and others through the Courts and Tribunal system and why continue to cause untold stress and misery pumping out APN's having told Parliament that they would only issue them in specific circumstances? Why issue APN's on individuals (as opposed to the Employer) when they know they would not argue the same grounds in Tribunal or Court? 

Surely it's only the schemes regarded as contravening the existing law that are being pursued through the courts. The new law is for the ones that manage to escape. If they really are loans under the new legislation, then they won't be taxed. You might be better off trying to argue why you think the arrangements that would be caught under these rules shouldn't be caught (on their own merits I mean - not just because they pre-date the new law).

gordo wrote:
There is only one reason. We are all being played. We are being sold to and some have bought it.

That's what the punters who bought into these schemes say! No, we're not all being played. We are not being brainwashed by Government propaganda. We're made of sterner stuff than that. Most of us on this thread (and I suspect the population as a whole) just happen to agree that these aggressive schemes should be closed down.

gordo wrote:
Behavioural Psychology, as a tool, can really help people who are in a dark place by helping them either find certainty or at least stop creating false uncertainty in their own minds.

I'm sure the promoters of these schemes got up to a few psychological tricks of their own!

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By gordo
09th Apr 2016 14:38

cfield

Thank you for correcting my spelling, I concede you got that bit correct.

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By cfield
09th Apr 2016 14:49

Pull the other one

gordo wrote:
cfield Thank you for correcting my spelling, I concede you got that bit correct.

Come off it. That wasn't a spelling mistake. You really did think it was "tenant of the law".

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By gordo
09th Apr 2016 14:52

:-)

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By Difficulttimes
09th Apr 2016 15:44

cfield..you really did not just write that??

an APN is only issued if HMRC believe that the law has already been broken and tax evasion has taken place.

Please tell me you don't really 'believe' that?

Regardless of your interpretation of a loan in this respect you know the difference between evasion and avoidance and you must know that APNs are continued to be issued on an industrial scale with no regard for whether this so called 'law' is broken? If you have a DOTAS scheme number on your SATR then you will get an APN which you have 90 days to pay with NO APPEAL. You take part in a tax avoidance scheme that isn't registered with HMRC so there is no DOTAS then life carries on as normal.

It's about as simple as that and there doesn't need to be a law that is apparently 'broken' and why would any person with half a brain notify HMRC on their SATR with an illegal tax evasion activity and expect to get away with it and reading that again it sounds like an oxymoron if there ever was one. That makes absolute no sense and your dribble is killing me.

 

 

 

 

 

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By cfield
09th Apr 2016 16:09

APNs

Difficulttimes wrote:

Regardless of your interpretation of a loan in this respect you know the difference between evasion and avoidance and you must know that APNs are continued to be issued on an industrial scale with no regard for whether this so called 'law' is broken? If you have a DOTAS scheme number on your SATR then you will get an APN which you have 90 days to pay with NO APPEAL. You take part in a tax avoidance scheme that isn't registered with HMRC so there is no DOTAS then life carries on as normal.

OK, let's qualify that a little bit. An APN is only issued if HMRC say they believe that tax evasion has taken place.

Let's be honest, it's not difficult to believe that with some of these schemes, is it?

I'm glad to say that none of my clients need to report schemes under DOTAS on their tax returns, so I've never had direct experience of them, but I'd be surprised if HMRC are issuing them simply because a DOTAS scheme number has been given. It probably just seems to be on an industrial scale because there are so many dodgy schemes around where the line between avoidance and evasion is blurred.

Difficulttimes, I know you're having difficult times, but if you were told that a tax avoidance scheme had to be reported on your SATR under DOTAS, that in itself should have rung alarm bells. You weren't hoping to avoid sleepless nights, were you?

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By gordo
09th Apr 2016 17:07

cfield

I'm sorry but you've just demonstrated a complete lack of knowledge on this matter.

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By cfield
09th Apr 2016 17:39

Can you prove that remark?

gordo wrote:
cfield I'm sorry but you've just demonstrated a complete lack of knowledge on this matter.

OK, if you can quote me one single case where a) HMRC have issued an Accelerated Payment Notice after a scheme was ruled admissible in court (and which is not going to appeal) or b) where HMRC know full well that the scheme involved is legal and will not challenge it in court (and you know that for a fact), then I will revise my opinion.

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By gordo
09th Apr 2016 20:14

Oh for goodness sake, okay then

There are 3 conditions, one of which has to be satisfied before HMRC can legally raise an APN

The scheme has been formally notified to HMRC through the DOTAS rules;The scheme has been counteracted through GAAR (of which there are none yet);The scheme is similar to ones already defeated in Court.

So as 'difficulttimes' clearly explained in no uncertain terms, it is a surprise to say the least that you are under the hugely incorrect understanding that APN's are raised where Evasion is in point. You don't register your evasion (hiding something from HMRC), through the DOTAS scheme (Disclosure of Tax Avoidance Schemes).

Indeed some providers voluntarily registered their scheme even though strictly speaking it wasn't notifiable. Any who hid their schemes by incorrectly not registering, ironically would receive no APN!

It is incumbent upon HMRC to take due care when issuing APN;s

http://www.accountancyage.com/aa/news/2442026/hmrc-reverses-apn-decision...

"HMRC uses the notices, introduced under the 2014 Finance Act, to demand tax that it believes someone owes before the underlying dispute has been adjudicated on by an independent tribunal or court. Taxpayers then have 90 days to pay HMRC the fee demanded, but are not allowed to appeal the decision."

https://www.cchdaily.co.uk/hmrc-forced-withdraw-hundreds-apns-against-mo...

http://economia.icaew.com/news/january-2016/sorry-for-the-inconvenience-...

 

HMRC issued the first APN's against Ingenious Films even though I believe the case was in the Tribunal system at the time and listed to be heard in the Courts. Why?

 

These schemes are all fully disclosed to HMRC and HMRC have been investigating for many years but have wholly failed to bring any before a Tribunal other than Rangers FC (Murray Group)

HMRC lost Dextra http://www.bailii.org/cgi-bin/markup.cgi?doc=/uk/cases/UKSPC/2002/SPC003...

HMRC lost Sempra Metals

 

and then issued APN's regardless from July 2014 onwards

http://www.harbottle.com/tax-avoidance-schemes-accelerated-payments-90-d...

Before winning their 3rd attempt with Rangers in 2015  (though most knowledgable commentators expect HMRC should lose the final round)
http://www.bbc.co.uk/news/uk-34720850

Please note that the first APN's were issued at a time when HMRC had lost in the FTT and the Appeal Court in regard to Rangers FC, before they had any success in the Court of Session.

Please note that despite HMRC's most recent (perhaps temporary) success in the Rangers case, at no point have HMRC tried to argue before a tribunal, that tax is payable by the individuals. What they have argued is that PAYE should be due by the Employer.

So yes, you are quite wrong to say "An APN is only issued if HMRC say they believe that tax evasion has taken place." and yes "HMRC have issued an Accelerated Payment Notice after a scheme was successful in court", despite Lin Homer's undertaking, before Parliament, to only issue APN's where they have won a similar case in Court. Sorry that should now say Dame Lin Homer.

HMRC have responsibilities:

http://www.rpc.co.uk/index.php?option=com_easyblog&view=entry&id=1496&It...

http://www.rpc.co.uk/index.php?option=com_easyblog&view=entry&id=1640&It...

 

Please feel able to do your own research lest you come to the conclusion that I'm only giving you the facts.

 

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By Old Greying Accountant
10th Apr 2016 09:59

I wonder if ...
... the emperor protested as much?

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By gordo
10th Apr 2016 10:35

What!

Somebody advocates public flogging despite not understanding the basic rules of DOTAS or the APN regime plus not understanding how APNs are being implemented.

I point this out.

He says prove he doesn't understand.

I do so.

And you say: doth protest too much.

What!

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By ShirleyM
10th Apr 2016 10:45

Some of the punters on here ....

... sound more like promoters.

If they were genuine punters I would expect a little more animosity towards the promoters that got them into this mess, rather than  'having a go' at the people who do, but hey ho ... I will probably be accused of working for the HMRC.

I get the impression (from some) that it is very unpopular to care about fairness, the countries future, and the taxpayers that support it for everyone's benefit.

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By cfield
10th Apr 2016 11:33

Where's the salt?

Gordo, I haven't got time right now to look into these cases and verify what you're saying, but given all the pony you've been telling us about "retrospective taxation" and drawing a fake moral equivalence between these contrived schemes and transparent salary/dividend choices, you'll forgive me if I take your comments with a pinch of salt.

By the way, I interpret evasion as contrived avoidance schemes that turn out to be on the wrong side of the law. It doesn't matter if a DOTAS number was issued and disclosed on the SATR.

Evasion doesn't have to be hidden. If somebody claims expenses for suits and haircuts on their tax return and discloses absurd reasons for doing so in the white space, that doesn't stop it being evasion, even if it is through ignorance of the tax rules.

Also, you've been quite critical of my knowledge of the APN regime and saying I know nothing about it. True, I am not an expert in this field (I'm glad to say) but I do know the rudiments. You appear to know a lot more, probably because you're a promoter (correct me if I'm wrong) and thus have a vested interest in denigrating the APN regime, but as a regular accountant and tax advisor, it seems to me that they were brought in for a very good reason.

It does concern me, however, that this draconian measure might conceivably be extended to more acceptable types of tax planning (these things are always the thin end of the wedge) and if that happens, it will be thanks to the amoral people who peddled these schemes and the gullible people who bought them.

 

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By gordo
10th Apr 2016 19:06

It's a shame that you don't have the time for that.

I'm not a Promoter, you are wrong. I am someone who wants us to retain a Democratic society governed by the rule of law.

So it's just me and the Law Society and Chartered Institute of Taxation that thinks there might be an issue with the new trend for retrospective legislation then.

I do though happen to think that it is important that people are aware of the propoganda, the misleading and the bully boy tactics carried out by HMRC in our name.

HMRC have never once provided any technical argument in Tribunal or Court for their grounds for raising a charge on the individuals and therefore people have not been given a basic human right of the opportunity to defend it.

Sadly these bully boy tactics will cause much pain and misery, bankruptcy and worse.

For a public body to be demanding money with menaces, when there are no proven grounds for doing so and using a combination of bully boy tactics and psychological influence to do so, I think is a disgrace.

http://www.lawsociety.org.uk/policy-campaigns/consultation-responses/tax...

http://www.lawgazette.co.uk/law/tax-avoidance-clampdown-threatens-rule-o...

http://www.tax-news.com/news/CIOT_Urges_Halt_to_Retrospective_Tax_Law_Ch...

http://www.tax.org.uk/media-centre/latest-news/press-release-%E2%80%98ta...

HMRC tell parliament that they expect to issue 4,000 APN's before going on to issue over over 40,000 at a rate of 3,000 per month.

https://www.whatdotheyknow.com/request/estimate_of_4000_taxpayers_to_re

Incidentally, HMRC do not win 80% of cases....but surely they wouldn't manipulate the statistics would they!

Never mind, you won't think it important, back to the flogging...

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By Old Greying Accountant
11th Apr 2016 13:41

Hmm ...

gordo wrote:
I am someone who wants us to retain a Democratic society governed by the rule of law.

... talk about bare naked hypocrisy - who exactly will pay for for a democratic society governed by the rule of law if everyone avoids tax?

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By jonnieboy
11th Apr 2016 09:37

Having read cfield's bluster

** EDIT ** I can't believe I wasted my time posting anything in this thread.

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By cfield
11th Apr 2016 10:46

Wasted time

jonnieboy wrote:

** EDIT ** I can't believe I wasted my time posting anything in this thread.

Well no one's forcing you to.

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By Andy Davis
11th Apr 2016 11:15

Gordo, the voice of reason

This thread has been running for over a week now. I tried to put some simple principles across at the outset which failed to gain any uny understanding by the predjudiced,' serves them right camp'.

Your posts have detailed very concisely, and argued very fairly the points and principals which should be under consideration here.

There is still no sense of understanding, even the difference between avoidance and evasion is too complicated a principal to grasp for some posters on this thread.

You are wasting your time. Let them continue to bluster in blissful ignorance on their moral high ground................. until something happens they don't agree with.................... Idiots

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By justsotax
11th Apr 2016 12:10

idiots...

I guess I should be thankful that I am the kind of idiot that wouldn't sign up to something that is 'too good to be true' and potentially cost me my house etc.

 

It is only a shame that gordo et al didn't spend as much time researching this area prior to signing on the dotted line as they clearly have after...

 

Finally if you wish to coral support I suggest you get to 'know your audience' - if that isn't the point of your various comments I suggest you go on a site where they give a shit[***][***] - for most on here would have given the appropriate advice rather than what you wanted to hear.  

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By Andy Davis
11th Apr 2016 12:31

What I want to hear

Is a sensible argument based on the facts, not not some pompus, self righteous buffoons jumping on the bandwagon without the slightest understanding of the issues.

I thought the people on this site did give a shit[***][***] - surely that's why you're posting?

Not sure how I am trying to coral support. Most people sem to have made their minds up already, irrelevant of the facts.

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By Vaughan Blake1
11th Apr 2016 13:54

And the facts are?

Andy Davis wrote:

Is a sensible argument based on the facts, not not some pompus, self righteous buffoons jumping on the bandwagon without the slightest understanding of the issues.

I thought the people on this site did give a shit[***][***] - surely that's why you're posting?

Not sure how I am trying to coral support. Most people sem to have made their minds up already, irrelevant of the facts.

I have asked seven times for details of what these 'loan' agreements say in relation to the repayment terms. Nobody seems to know (or want to tell).

So Andy, what are the facts?

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By Andy Davis
11th Apr 2016 14:16

The facts are

It does not matter if you have asked once, seven or a hundred times.

Fact 1. I do not know the terms of these loans. I assume every provider will use some form of legal loan documentation and they will all be different.

Fact 2. The court has decided that these loans are valid.

Fact 3. You do not like fact 2.

Enough facts for one day I think.

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By Vaughan Blake1
11th Apr 2016 16:56

But

Andy Davis wrote:

It does not matter if you have asked once, seven or a hundred times.

Fact 1. I do not know the terms of these loans. I assume every provider will use some form of legal loan documentation and they will all be different.

Fact 2. The court has decided that these loans are valid.

Fact 3. You do not like fact 2.

Enough facts for one day I think.

Fact 1, If you have no idea on the repayment terms on any of these loans, I'm not sure that you are qualified to comment on their validity.  If each promoter uses different terms, maybe some are valid and some aren't.  The devil is in the detail after all!

Fact 2, I thought Rangers lost their case, the court obviously didn't like their loan agreement much.

Fact 3, is not relevant, I'm still trying to be objective.

Fact 4, these people had a salary of £7,000 and borrowed up to £900,000 to fund their lifestyle.  Doesn't look sensible to me even if it is a genuine loan.

Fact 5 The Rangers loans were re-payable on demand (I read the case, you obviously haven't)

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By Andy Davis
11th Apr 2016 17:39

Fact 1. I am not commenting on the validity. The courts have. I can't as I don't have an agreement to look at (as I have already pointed out). Neither do you, and by your own logic that means you are not qualified to say they are invalid. Not sure therefore why you continue to do so...................

Fact 2. Rangers is under appeal, and (because I have read the case) I understand that the circumstance are unique to that case. A while since I read it, but I recal there was some paperwork kicking around confirming the loans were not repayable. Suspect that will not be the case with most arrangements.

Fact 3. Threw it in because it made me laugh, and you have to admit, it was quite funny

Fact 4. Is not relevant. If it's a loan, it's a loan.

Fact 5. So? (And I have)

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By justsotax
11th Apr 2016 13:26

sensible argument LOL...

you don't understand why people simply disagree with you.

 

I think many have explained their stance...it may not agree with yours - seemingly to your annoyance (we must be 'idiots' as you have set  'facts' out so well and many still do not agree).

 

I do care...but not so much for those who blindly took advice in order benefit from a scheme designed to artificially avoid tax.  The tax law is changed every year so quite why it has come as a surprise to you I don' know.  The QC and scheme provider should have set this out - but that's a 'fact' you wish to ignore...instead complaining about the government and the accounting sector who you believe has let you down. 

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By Andy Davis
11th Apr 2016 13:50

Let me down?

Not sure what gives you the impression I have entered one of these arrangements, I work in the accounting sector, and the only way that it has let me down is where practitioners blindly follow HMRC and the press propaganda without properly understanding the position.

I have no problem with people disagreeing with my stance when they are in a position to draw an informed and sensible conclusion.

This whole debate revolves around the legal status of a loan. As Gordo demonstrated in earlier posts the courts (and not myself or Gordo) have decided time and time again that such loan arrangements (whether you judge them to be valid or not, artificial or not) are valid, and the loans are not taxable as income. The terms of repayment are irrelevant, whether or not the loan is ever repaid is irrelevant, whether you agree with it or not is irrelevant. A loan is a loan is a loan, it is not income. Period. No question, no argument. This has been decided in court, and inidividuals should be able to rely on statute when arranging their tax affairs

Introducing legislation to make these loans taxable as income now when the courts have already decided they are not is retrospective. I cannot see any logical argument that it's not

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By justsotax
11th Apr 2016 13:56

apparently the legal argument is

'a loan is a loan is a loan' (but lets hope they don't use the dictionary definition)

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By Andy Davis
11th Apr 2016 14:07

the legal argument is

No need to use a dictionary - the definition the court decided is the one we should work to.

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By justsotax
11th Apr 2016 13:59

actually ignore my last comment...

Andy any chance we could arrange one of these 'loans'....I need a bit of cash.... (sound ridiculous...quite!)

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By Andy Davis
11th Apr 2016 14:09

arrange a loan

Not something I do. Could have pointed you in the direction a few weeks ago, but apparently it's income now you know...................................

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By justsotax
11th Apr 2016 14:11

so whats your beef then...

that the Revenue have moved the goal posts, that the accounting community are happy for them to do so, that the introducer didn't warn you...but god forbid don't attach any responsibility to the provider or QC...perhaps you should get a court view on 'barking up the wrong tree'.

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By Andy Davis
11th Apr 2016 14:21

Barking up the wrong tree

 

I might be barking up the wrong tree................... I think you are in the wrong orchard.

Moving the goalposts is fine, no problem at all,move them today, just don't say in 5 years time that Leicester didn't win the Premier League after all because the goal posts should have been where the corner flags were, and Villa won it really!

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By justsotax
11th Apr 2016 14:31

and the QC...or

the provider - no mention....for all of the apparent facts and how wrong this is the QC/provider come in for no comment....

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