Disguised remuneration: Year-end review

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Anyone who has been following the lively debate on disguised remuneration (DR) in the comment sections of Accounting WEB will be aware that the subject continues to generate strong opinions.

With 20/20 hindsight, many would agree that at least some employment/contractor structures created in the past never passed the smell test. However, many also feel that DR itself crosses the line between legitimately tackling abuse and unfairly punishing individuals who entered into arrangements in good faith.

Whatever your views on the rights and wrongs of DR legislation, and of the Supreme Court’s decision in the Murray case, the reality is that HMRC now has a set of very powerful tools with which to challenge affected structures.

Historically, I was one of many advisers who believed that the transfer of funds into an Employee Benefit Trust (EBT) sub fund did not create employment income for the beneficiary. Even so, I have been advising clients to take advantage of HMRC settlement agreements ever since the first opportunities appeared in 2011.

Although I am aware that individual cases continue to be appealed, and that we may see further litigation over the next year, I find it difficult to see any realistic prospect of cases being settled outside the Supreme Court.

The cost of pursuing an action that far, coupled with the lack of sympathy shown by the judiciary to perceived avoidance of any kind, is enough to make me question whether it can ever be sensible to advise a client to continue to fight.

This inevitably leads to a consideration of the latest iteration of HMRC’s settlement terms, published on 7 November 2017. For the first time, these terms specifically include reference to contractor schemes, although in practice they reflect the position as it has stood for some time now.

In brief, for employment arrangements income tax, employer’s and employee’s national insurance contributions (NICs) and interest must be paid for all years under enquiry or “in time”, in which contributions were made or loans were taken out. Out of time years cannot be taxed in this way, but if the taxpayer wants to avoid future DR charges, it will be necessary to pay the tax, employee and employer NICs by way of voluntary restitution (although without interest).

For contractors, income tax and interest is payable on the value of loans made or benefits provided, rather than on the gross value of contributions. No NICs are payable by employed contractors, but HMRC may pursue the employer for these. Self-employed contractors will have to pay class 2 or class 4 NICs. Employed contractors must pay income tax for out of time years via voluntary restitution to protect against future DR charges. HMRC’s guidance states that self-employed contractors “may need to make voluntary restitution payments”, which raises the prospect that this may not be necessary for the self-employed in at least some cases.

HMRC always reserves the right to charge penalties, although in practice I have yet to see this happen. HMRC may also seek payment of inheritance tax (IHT) where trusts are involved, and this is certainly a cost that should be taken into account when considering whether to settle. Some employers may be able to claim tax deductions, and taxpayers can claim credit for previously paid tax to provide a very small plaster to cover the gaping wound.

It is not always going to be the case that settling will give rise to a lower liability than, for example, paying the DR loan charge in April 2019. In cases where no corporate tax deduction is available, it may also be preferable to trigger a DR charge now, on which the employer can claim relief. However, in many cases settlements spreading taxation of benefits over several tax years will reduce effective tax rates compared to suffering the whole charge in one go.

One final factor to consider when thinking about settling is the benefit of certainty. Taxpayers have had potential liabilities hanging over their heads for many years now, and even a settlement on unfavourable terms may come as a relief compared to the ongoing stress of not knowing what will eventually happen. For most of those still affected, the benefit of being able to get on with your life must weigh strongly in the scales against the tax cost of settling.

About Andrew Robins

Andrew Robins

Andrew Robins is a partner in RSM’s London private client tax team, advising on all areas of UK personal taxation. He specialises particularly in advising high net worth individuals, non-UK domiciled individuals, non-UK trusts, and members of corporate remuneration plans such as employee benefit trusts and international pension plans.

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to uk_tax_gone_mad
04th Dec 2017 15:49

You are right - our clients ARE very lucky to have us.

I'm glad you recognise that as others who have made that comment or asked us how we sleep have masterfully missed the point.

I've steered people away from these schemes for many years. Had I jumped in, I'd be sleeping on a massive mattress full of my commission - and, unlike you, with no HMRC comebacks!

I'm all the poorer for sticking to the 'boring stuff', but I do sleep at night - on my thinner mattress. As do my clients.

That's professional integrity for you. Turning down easy money for scruples.

Why don't you pause for a second and re-read that last paragraph? Ah.....Got it now?

Given your tax history, it isn't a concept I expect you to understand - but this is why you get no sympathy and why I won't take lessons or lectures or instructions from you - but thanks all the same.

If you eventually stop peddling hard luck stories and ever learn any lessons from this, try for one to be to value professionals like us - rather than coming on here and telling us all where we're going wrong - just like you did during the 'good times'. Do you see what I mean now? You just don't learn.

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to AnnAccountant
04th Dec 2017 15:56

Well for once I thought we was going to have a reasonable adult conversation when you started but no, you continue to turn the knife !!!!

Purely on that basis and your 'Ah...Got it now?' has perhaps just undone any professionalism you thought you had.

I won't even bother replying to your other obnoxious and unhelpful quotes.

Well done you, pat yourself on the back. Now off you go and continue to sleep well and stop trolling those who are having to deal with this mess.

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to uk_tax_gone_mad
04th Dec 2017 16:14

You know what? I don't know who is trolling who any more or who is trying to wind who up.

Maybe neither. I suspect we just have no chance of understanding where each other is coming from.

Basically. You still won't learn! ;)

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to AnnAccountant
04th Dec 2017 16:05

Ann,

On the one hand you acknowledge that through your efforts you steered your clients away from these schemes, yet on the other you say people should have known better.

Did your clients know better when they came to you for advice? If they went to a different accountant and received different advice, would you then condemn them for getting the wrong advice? Do people deserve whatever they get if they didn’t consult the “right” advisor?

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to HMRCVictim
04th Dec 2017 18:43

That's a good question deserving of a proper answer. I'll give you one - just straight up.

This is how it looked from where I was sitting at the time and my view of things- with no jokes or jibes or shouting the odds:

Clients and non-clients alike have asked me about these sort of things over the years. They've come (they still come!) in various guises.

My view has always been "I wouldn't" and was formed (and explained) on a very non-technical basis as, in my humble view, that is all that is needed.

In short, I always thought that the notion of essentially getting out funds free of income tax was bound to be challenged and that the whole "pretence" around trusts and loans (or Chris Moyles being a 2nd hand car dealer) was all a bit artificial * and could all be simply challenged under anti-avoidance case law that we learned in about week 2 of tax school - and that dates back decades.

* I'm not calling the odds on this or getting into a debate on the schemes - just telling it from my point of view like I said I would. Mind, the schemes were very much marketed in meetings as "you'll get this money out tax-free" - not "well, put it into an EBT and see if the Employment Committee decide to vote any to your subtrust then ask the trustees for a loan - but perhaps you won't get either, they have genuine discretion". But I digress *

I was happy to explain my view to anyone who wished to hear it but, in the end, a lot of people will only listen to whoever is telling them what they want to hear. Also, I don't have unlimitless time (contrary to how it looks with all my posts here!) so there wasn't any great incentive for me to spend too long having the kind of circular, repetitive debates we are seeing here. Also, the scheme sellers on the ground were just salesmen - not tax advisers - thus limiting the usefulness of any debate - and any amusement value they may have had for me on the odd wet afternoon!

Sometimes these things got a bit heated, as on here. These salesmen were very aggressive with advisers who advised their clients against using them. They did not like seeing a sale getting away.

I think that I (and many other advisers) saved those who could be saved.

Some people could smell the (non-tax technical) rat on their own, others when I pointed it out/said "you've confirmed my suspicions" (heard that more than once).

Others just didn't want to listen to what they didn't want to hear and would have gone with the scheme seller regardless of what either of us said or even if is brochure had been written in crayon. This is the way of some people I think - you see it all over the place.

So I think those who really wanted to believe it just believed it and ignored any voice of dissent and would always gone with the scheme seller.

I might be in danger of getting to your question here though you can probably see where this is going.

I honestly do think that even just listening to the salesmen or a pro-scheme adviser, most should have smelt a rat. Not on a tax technical level, just by using any kind of scepticism and sense of smell.

This is one reason why (and again - I'm not slinging mud here - not in this post, like I promised) I have limited sympathy.

The schemes were (as far as I saw) openly sold as being "have your cake and eat it", exploiting what they said was a "loophole".

I just cannot honestly believe (and this is not hindsight) that any person/director/contractor presented with the basic mechanics and the documents to sign thought that any of the transactions were genuine commercial, bona fide transactions conducted in the normal course of any kind of legitimate business or planning- and I do not think that it takes any tax knowhow to see that.

As far as I saw the schemes are so openly and blantantly make-believe that those who signed up did bring this on themselves. Many WILL have heard and read warnings. Regardless, I'm sure all WILL have smelt the massive rat in the mechanics and docs but did it anyway because they were bedazzled by how much more they were told they could take to the shops.

If anyone truely, truely believes that (for example) the loan was genuinely a repayable loan or that (for example) it wasn't all pre-determined that all the money they signed away (at 10:01) they wouldn't get back (at 10:02) or can provide some sensible explanation of how they planned to repay the loan or what their business reasoning was, then I might be able to start to muster some sympathy - I honestly could.

I just haven't yet come across anyone who didn't know what they were doing and that it was all aimed at scamming the taxpayer.

In the defence of some, there at least was some semblance of normality in where EBT type arrangements originated from/used to be used for - which gave them some air of legitimacy in the very early days.

But in terms of rat-smelling take this as an example of what is currently being pedalled:

https://www.gov.uk/guidance/disguised-remuneration-job-board-avoidance-s...

Receiving "loyalty points" - I ask you. Do you think anyone in that scheme honestly think that is a genuine commercial transaction and not a (pretty poor) attempt to (basically fraudulently) redescribe their earnings?

This stuff goes back decades - decades ago people tried to get paid in gold bullion as (apparently) doing so meant you didn't pay any tax. I mean, I ask - come on - genuine normal commercial arrangement that just happens to be tax efficient (it wasn't as it goes) or a sham? Hand on heart, no tax knowledge needed - it's a scam isn't it?

Agree with me or disagree with me - and I'm addressing anyone who has made it this far not having a personal pop at the OP! - that's up to you, but this is where I'm coming from with some of my remarks and why I think that the taxation of what amounted to earnings as earnings needs to happen.

It isn't to punish you - it is, in my view, just what is required to put right what was always an obvious wrong.

All the above are my genuine and serious views. No jokes, no mud slinging as I promised.

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to AnnAccountant
05th Dec 2017 09:22

Ann

Thank you for a comprehensive and professional response to the question. Not wishing to labour 'my' position over and over but you have challenged 'anyone' who genuinely believed in the commerciality of the EBT scheme they were using. Contrary to listening to 'salesmen' I was advised by an ex-inspector of taxes who subsequently became a tax partner in one of the top four, knowing him personally.

The EBT in question was set up specifically for an IPO in late 2006 and the placing of cash funds (and shares) in to the trust was in order to further invest in the company's shares post IPO and to reward directors and employees subsequent to the IPO with shares in the company.

Following the banking crisis things changed somewhat and with cash being tight within the group a 'genuine loan' was made by the trust to a subsidiary company which I subsequently purchased from the group a couple of years later at arms' length.

There was neither a CT deduction for the contribution and funds remain within a trust/corporate structure (not in my personal hands) underpinned by a long term property development project which will likely not be realised before 5/4/2019, although it is presently for sale but in an unfinished state.

HMRC have concluded this is a 'relevant step' as the loan was to a 'connected' party.

How they expect me to take the funds personally from either the corporate or trust structure without paying tax is beyond me, but I am faced with a tax demand of c. £3.5 mln plus interest and penalties, on the loan value.

Yes it was explained to me at the time that as the law stood the loan may never need to be repaid, but the conclusion of everyone in the room was this wouldn't likely stand up to scrutiny as you rightly also concluded.

I did believe there was IHT benefit, although that has now been taken away, and I did believe funds held by a trust outside of the influence and control of day to day management of a listed company was also best practice.

Having not saved a single penny in tax by this transaction and having had the alternate 'tax free' option of the funds remaining within the group and simply using inter group loan arrangements to finance the project do you not think this is a particular issue that has resulted in an unfair result?

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to uk_tax_gone_mad
04th Dec 2017 16:07

uk_tax_gone_mad wrote:
So please stop coming here and saying 'I told you so' and go and re-educate the dodgy accountants in your profession, or help hold them to account and make them share the responsibility they were also part of !

I keep seeing things about dodgy builders. Why haven't all builders weeded out the dodgy ones by now?

I can assure you that most of us would like nothing better than to weed out the dodgy accountants. Unfortunately the law does not protect the term "accountant" any more than it does "builder". So people with no ability can call themselves accountants (or builders) and there is nothing we can do about it.

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to stepurhan
04th Dec 2017 16:27

Or, to put it another way...

I'll do my bit to help weed out dodgy accountants once all the IT contractors have supplied me with a computer and software with no bugs it in.

Or even if they just promise to stop moving the buttons round on Firefox or taking the "delete the email from the main screen" option off my phone for absolutely no reason. And my Dropbox icon recently changed colour to yellow!

[Lighthearted way to end my part in all this - but I hope people see the point.]

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to stepurhan
04th Dec 2017 16:23

What we need is a body to oversee the standards of accountants in practice, and to make sure they work in a professional way. I know hindsight is a wonderful thing, but if there were such a body I am sure that none of their members would have considered promoting or taking part in any such schemes.

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to stepurhan
04th Dec 2017 16:28

Ladies and gentlemen, there are differences of opinion on this blog and some have holier than thou attitudes, and show no sympathy whatsoever. Let them stew in their own juices.

Taking us back to a more professional argument, being a Chartered Accountant who thought he understood the situation at the time, but nevertheless consulting with those of more specific knowledge of trust law and taxation, I can't say those I consulted were dodgy or less professional than those that steered clients away, aka Annaccountant.

The law was very clear at that time that loans could be made by trusts which were not taxable under any disguised remuneration rules (after all at the time they did not even exist, so how could the professional have known). Dextra and Sempra were legal precedent cases and professionals simply advised on what the law was. What those advisors could not have known was that not only could the law be so easily changed but that it could be applied retrospectively. I doubt even Annaccountant can claim to have known retrospective laws could be applied so easily.

This is more a case of not close the loophole but penalise those who could not have known that they were doing wrong. It's exactly the same as retrospectively changing the speed limit on motorways to 50 mph and fining all those photographed over the last ten years driving between 55 mph and 70 mph.
When SSAS's were first introduced, tax deductible contributions could be made and immediately loaned back to the company. that wasn't what the Government intended, so HMRC and HMG changed the law for the future, not the past. That's fair. What is NOT fair is the retrospective nature of what HMRC/HMG have with these DR rules.

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to Exfoliate
04th Dec 2017 16:50

And to be clear, I asked HMRC to allow me to put myself back to the position I was in prior to the contribution to the trust so that I could then take one of the alternative options available paying less tax than HMRC now proposed 10 years later.

Those lower tax options remain legally available to me.

I was told by HMRC any repayment of contributions to the settlor company would be a relevant step!!

Do I feel screwed by the system ? You bet I do! So go on Annaccountant gloat all you want.

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to Exfoliate
04th Dec 2017 16:50

And to be clear, I asked HMRC to allow me to put myself back to the position I was in prior to the contribution to the trust so that I could then take one of the alternative options available paying less tax than HMRC now proposed 10 years later.

Those lower tax options remain legally available to me.

I was told by HMRC any repayment of contributions to the settlor company would be a relevant step!!

Do I feel screwed by the system ? You bet I do! So go on Annaccountant gloat all you want.

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to Exfoliate
04th Dec 2017 19:03

You can read a 100% serious post by me on page 1 if you like. It's long though, I warn you.

Thought it only fair to properly explain where I'm coming from.

With it, I'm bowing out. We've all had our fun and I'm ending on that serious explanation of how I see things.

Now I need to get back to work!

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to AnnAccountant
05th Dec 2017 07:40

I would recommend David Gills comment on the first page for a 100% serious critical view of HMRC and UK Governments handling of this situation and why this should be of concern to people currently unaffected.

It won’t stop here.

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to HMRCVictim
05th Dec 2017 09:50

“For those contributors, particularly accountants, who appear to be rejoicing in the discomfort being experienced by taxpayers (and their advisers) affected by the above changes in legislation, I would simply state the obvious and observe that it's only a matter of time before HMRC/government's disregard of the law (in relation to legitimate taxpayer disputes) is extended to all other areas of tax.

Whilst the potential liabilities are significant (and life changing) for individual taxpayers affected by the loan charge/disguised remuneration, the overall figures which will be collected will be comparatively small - individuals and companies that have benefited from tax planning arrangements can be sacrificed to serve political objectives. Once these people have been stripped of their wealth, the target will move onto everyone else.

If you are still in doubt, I would strongly recommend that the Whole of Government Accounts is essential reading for those supporters of the DR legislation which is the subject of this article.

Application of even the most simplistic analytical review techniques demonstrates where the problem really lies - a deficiency of assets of £2.4 trillion, excluding state pension liabilities of £4.1 trillion, which is increasing every year.

The rule of law is important. Taxpayers have a right to rely on their legitimate dispute with HMRC being heard independently through the courts. They are being denied this opportunity by this type of legislation.”

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to HMRCVictim
05th Dec 2017 10:02

Reading through all the comments above, in particular those from “Exfoliate”, I think even the most critical reader would conclude that it’s a complicated matter with the facts varying from case to case. And the governments blind wholesale approach which seeks to change the law to make the end contractor liable for 100% of up to 20-years PAYE/NIC is NOT about fairness. It only draws a line under a whole sorry mess as far as HMRC are concerned. They will bankrupt a bunch of people whilst collected a fraction of what was actually avoided and other parties who made £ms will escape unscathed.

All this rather than follow HMRCs own Litigation and Settlement Strategy which might actually apply the law and reach a fairer outcome. This would also require HMRC to pursue ALL parties involved instead of allowing them discretion to pin the blame on whomever they choose.

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to Exfoliate
05th Dec 2017 10:13

Exfoliate wrote:

The law was very clear at that time that loans could be made by trusts which were not taxable under any disguised remuneration rules (after all at the time they did not even exist, so how could the professional have known).


If you really want to keep running with this argument, you need to answer one simple question. A simple question that I have never seen anyone involved in these schemes answer. A simple question that, if you couuld provide a decent answer, might actually garner you some sympathy.

If these payments were genuinely loans, what were the repayment arrangements and what interest was charged?

Because a loan with no repayment arrangements or interest does not sound like a loan to me.

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to stepurhan
05th Dec 2017 10:37

Well stepuran here's a first I guess.

Interest was originally 5% per annum, later changed to 1.5% per annum but with a participation arrangement on the profit earned by the company on sale of the property.

Repayment of both capital and interest is naturally on sale of the property, there being no other means.

Furthermore, security for the loan was provided on the property which is a genuine investment property not a 'home for me'.

As the loan is direct from the trust to the company, I fail to see how I personally can now extract any of these funds from either the company or the trust without paying tax somewhere - do you? Unless of course I intend as a director to steal it from the company and don't repay the trust debt, but then that's a criminal act within corporate law. The HMRC inspector just looked at me and said 'It's obvious I have no intention of repaying the loan'. I guess I must just look guilty and regardless the facts must be taxed accordingly ?

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to stepurhan
05th Dec 2017 10:45

And one more thing, the property is 90% complete, lack of funding being the issue. It's up for sale showing a prospective 2 mln profit before costs and taxes, but given the tax issues with HMRC I am being advised to substantially reduce the value for a sale ahead of 5/4/2019. Even so, I am told by HMRC that repaying the loan in cash prior to 5/4/2019 may still not resolve their demand as this being a relevant step regardless repayment.

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to stepurhan
05th Dec 2017 17:41

I agree with bystepurhanh

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05th Dec 2017 15:50

Always remember substance over form.

Just because I call it a stallion does not make a donkey a horse!

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By TMR
to North East Accountant
06th Dec 2017 10:26

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!

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06th Dec 2017 16:41

of course it wasn't the crooked accountants at fault...some dodgy ones may have put people in touch with scheme providers...but it is those providers who sold the scam...combined with a dodgy barrister.

And for clarity I for one am not laughing or taking any kind of joy from your position, indeed I suspect neither of others. The lack of sympathy comes from the ongoing argument that even with everything that has been discussed that you in no way take responsibility for your own predicament....indeed that even now you wish to claim in some way that it is above board (which kinda contradicts your assertion that your accountant was to blame...when it was the government who apparently 'moved the goalposts').

First you have to admit you have a problem....you know...that you tried to avoid tax (albeit thinking it was legal)...but I am not sure I have seen anyone come outright and say that....just excuses...someone else is responsible ....(I think they call it the blame culture....but you can't even sue anyone because the people who actually sold you the sham have long since folded)....

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to justsotax
06th Dec 2017 17:18

First I have admitted I have a problem
Second I have been in discussions with HMRC for over 2 years now, in an attempt to bring it to a close.
Thirdly It was legal.
Fourthly suing isn't an option as they weren't regulated arrangements.
Finally I kick myself every day for falling for the sales pitch. For the likes of me who specifically asked if they were legal and HMRC were aware of them, we were provided answers by these so called professionals. I am more than happy to take my part of the blame for being stupid, but who hasn't fell for a dodgy sales pitch at least once in their lifetime ?

The issue I and I assume others have is the way HMRC (HMG) have (or haven't) dealt with it.
DOTAS was supposed to be a two way street. We register the scheme with HMRC, they find ways to close the loopholes. That is not what they used DOTAS for though, they used it as a list to send APN's to people to collect the monies before it even had chance to get to court.

20 years of retrospection is not the correct way to deal with this. When I received my first enquiry notice saying they were looking into my SA based on the scheme details on it, I rang HMRC in a panic asking what the problem was. They said nothing to worry about, we check so many every year and we will let you know if we need any more information. Nothing from them for a further 8 years !!!!! It just isn't right.

They won the Rangers case, but it was a bit of an own goal and didn't like the decision, that is why they are now circumnavigating a Supreme Court decision by re-writing law and backdating it. Again, how can this be right.

So to be clear, I do take some responsibility, I chose to leave once it was obvious what route HMRC were taking but the way they have dealt with this whole debacle is leading to suicides, bankruptcies and ruined careers. As others have said, had they acted quicker and issued a spotlight 10+ years ago, rather than 12 months ago, I am sure many people would have acted on it. So for me, HMRC's intentions were to stall this all along. Why ? Because why would you bite the hand the feeds you.

Look into a company called Behavioural Insights and it will be all too clear what their motives and strategies are.

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to uk_tax_gone_mad
06th Dec 2017 22:12

The funny thing about the posts from the disgruntled "scheme users" on here is that, in your posts, you seamlessly blend facts and fair comments with mixtures of misunderstandings, incorrect deductions along with some hurt and blame and (at best) only a token 'nod' to your perhaps maybe having possibly a smidgen of culpability in what you have done to your own lives.

It gives these posts an odd air of "playing all the right notes but not necessarily in the right order"

I don't completely blame you for this, per se. Everything you've read and experienced about these 'schemes' has always been through various filters of various biases and echoed around others in the same position.

I've also read some comments by the 'tax forum god' of the IT world and, well, he knows not to upset his audience, let's say that.

But we all experience things in our own way and that's fine. Just if you don't find a way to dodge writing the cheque to right your wrongs, try to appreciate that's it wasn't ever even half as unfair as you think it is - even if you don't fully understand why.

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to AnnAccountant
07th Dec 2017 09:37

Hold on Ann, you challenged me above with regard to commenting the loan made by the trust to a company connected to me was to avoid income tax, and I've replied the funds remain in the corporate/trust structure with no obvious way to extract personally (should I even want to) without paying income tax, identical to leaving money in a company.

I've further explained that EBT's (whether they are referred to as schemes or by their proper name Employment Benefit Trusts) can be set up for reasons other than tax saving, yet you simply choose to argue these are ALL tax avoidance abuses.

Once again, I do not know how many like me have not saved any tax nor used the trust for anything more that asset protection and as a future retirement and reward system.

Are you and all those who support these HMRC actions supportive of bankrupting companies and individuals who have used Employment Benefit Trusts in the way they were originally intended? Rather than have dodgy salesman and accountants abuse them subsequently to save tax.

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07th Dec 2017 09:21

I think the clue really is in the word "scheme". Intention is also a word that springs to mind. If your spouse works in the business and you pay them, fine a deduction can be made. if you make a deduction in the accounts for a spouse and don't pay them cos they don't work in the business, then that is evasion. I know this is a simplistic approach but in my mind the outcome is the same.

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08th Dec 2017 12:39

Unfortunately within all of this the main issue is that the people to blame no longer exist....they have folded, run away etc. The accountants (I would safely envisage 99%) have neither benefitted from or pushed clients towards these schemes.

Indeed, many contractors having become experts in this field argue that these schemes are not illegal and the government are wrong. In which case your beef is with them, not accountants.

Finally to suggest anyone would have entered these schemes not for the purposes of reducing their tax is disingenuous at best...that is the only reason....and that is the problem you must admit to before getting any sympathy of people who pay taxes within the spirit of the law.

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to justsotax
08th Dec 2017 15:34

You say "Finally to suggest anyone would have entered these schemed not for the purpose of reducing their tax is disingenuous at best, that is the only reason."

Then please tell me where I own Company A contribute tax funds to a trust (do not raise a tax deduction in Company A), then loan money from that trust to Company B which I also own, has saved me any more tax that if I simply loaned the money from Company A to Company B ??? For the record if you haven't read my blogs, the scheme was set up for asset protection and IHT (albeit IHT has since been vetoed and no longer available). Please answer that thank you.

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08th Dec 2017 13:25

The following extract from the recent case in the link below is very dismissive of any attempt by HMRC to try to argue there is an informal undocumented loan, rather than a nomineeship.

“100. I am equally unimpressed by the reliance by HMRC in this case on the Administrators’ Report that shows the appellant as a creditor for some very informal and undocumented loan to Geezer, and I also think it highly improbable that the agreement and the manner in which the amounts were paid did give rise to a debt. "

http://www.bailii.org/uk/cases/UKFTT/TC/2016/TC05348.html

So HMRC are very happy and hypocritical to try have it both ways when it suits them.

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08th Dec 2017 13:58

indeed both sides seem to suffer from hypocrisy...

Contractors (at least some on here) appear to claim that they get no tax benefit and that its totally above board. Then suggest they were duped into signing up for a scheme and that us trashy accoutants should expose the dodgy ones for selling these schemes (which they argue are above board).

whish is it....

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to justsotax
08th Dec 2017 15:48

I agree accountants have been blamed on this blog and in many cases wrongly, even to an extent some sellers have been blamed and also I think again some wrongly. I re-iterated above in my blogs, I am a Chartered Accountant, and therefore have some knowledge, also I was advised by an ex-tax inspector who was now a partner in one of the big 4, so I think we had sufficient professional knowledge to understand the position, at least more than most.
It was stated to me very clearly, "as the law stood loans could be made which on face value never needed to be repaid". All of us said at that time, 'sounds to good be true' and 'it should not to be relied upon', (which I certainly didn't albeit I never expected to be drawn in to this mess). None of us could see however the 'retrospective' actions HMRC would impose and whilst I am grateful to an extent (from a moral point of view) that I have properly operated a 'genuine' EBT scheme as intended, what is appalling is HMRC can dismiss genuine non tax saving schemes as though they could never exist (as you appear to have done), issue APN's and I have no right of appeal, other than some very lengthy and extremely expensive legal action through to a Supreme Court. I doubt HMRC will have any sympathy or even willing to listen.

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to Exfoliate
08th Dec 2017 21:27

You're still not making sense, but I wonder if you're starting to get there but I'm not sure:

1) You talk of loans that didn't need to be repaid. Ergo - not loans. When connected parties acting together call something a loan, you have to look beyond that - ie at what is actually is.

Put it this way - When teenagers "borrow" money from their parents. Doesn't make it a loan does it? In fact, the situation is pretty comparable. They use the term to make themselves feel better - like they aren't really benefitting - but they are - they know they are - because they will never repay it.

Oh dear! £000s worth of planning up in smoke by basic teenage chav reasoning? Oops!

2) All this "I didn't benefit". This sounds like phrases bent clients sometimes come out with when really what they mean is "I didn't actually or don't still have the money".

You must know that setting funds or a loan asset aside for your benefit is a benefit. You must know that.

That money was coming your way eventually. Still could - loan will still be owed to you - just net of tax - just like everyone else's salary. Just like all the common people who get paid and pay their tax - that thing that you are too good to pay - too much of a big shot businessman to pay.

3) If there was no benefit to you then why exactly did you bother? And pay big fees and take the tax risks you knew you were taking all for that no benefit?

Again, you're not making any sense.

4) This is your best one yet:

"I have properly operated a 'genuine' EBT scheme"

Properly operated a genuine scheme! I ask you.
Yes, it did properly exist (as you say) - it was just a load of baloney. And you know it.

It is comments like that that convince me you are just trolling. Also, I wonder why you are still posting just to be abused. I also can't believe you're an accountant - I doubt it (see below).

Was the genuine scheme DOTAS reportable? If so, if that wasn't a clue. What do you think HMRC do with those reports? Say "fair cop squire" and chalk it up to experience?

Also - how do the DOTAS hallmarks square with "no benefit"? No (tax) benefit surely means no DOTAS?

Anyway, let's wrap up a couple of other points for completeness while we're here:

5)

You all bleat - "there was nothing illegal".

Well, lawful isn't the same as untaxable. Don't conflate two totally different concepts.

Just like "having a scheme" does not equal "having no tax liability"

6) Retrospection

Is this the 2019 charge?
No - it is taxing a continuing state of being, not the "lending" itself = not retrospective.

It is easily avoided by repaying the loan.
How much might the (now) 10 year old Beemers and the Selfridges clothes that your ex took the garden shears to fetch on ebay?

You borrowed to finance spending?
Micawber wasn't wrong you know!
He might not have been fun (like a lot of accountants) but they do speak sense - even if it the sense you don't want to hear when you're flashing the cash and using it to play the part of a much bigger man than you are.

Speaking of accountancy training...For all your training -it doesn't seem to have done you much good here. You just listened to what you wanted to hear rather than using some good old professional scepticism.

Or maybe you thought too much (but badly). Look - even a 5 year old could pick 100 holes in these schemes. Not technical ones - but they don't need to. Misdescribing events, actions, intentions and setting up a stupid charade are simple faults that anyone can see.

Sometimes, the cleverest thing to do is to take a basic approach. That's how I have to work as my simple Northern brain can't argue 3 contradictory concepts at once like you try to do with these schemes. Even if it could, my mouth wouldn't remain straight.

I know I'll never have as much money as you big businessmen. But it will be my money. Honestly earned, tax paid and clients who are happy - not bust or in jail. Also, Selfridges does nothing for me. Freaks me out if I'm honest.

Anyway..

Apart from getting no sympathy, you're now just making a fool out of yourself - trolling or not.

If you are genuine, you'd be better off doing 100 other things than being indignant and reading whatever interpretations of the rules and your scheme and situation that suit you.

Maybe start by thinking about what you have done. Actually done. When you start to develop a shred of humility about it, maybe I'll start to sympathise.

Is there a hint there with your comment about morality? Or is that a throwaway comment to garner sympathy?

Trolling or not, your posts suggest a degree of manipulative behaviour, denial, narcissm and plenty of other things that, well, if you're faking them (and maybe even if you're not!) you could have an excellent career as an author or on the stage.

Anyway, whatever. I hope you get some justice thrown at you. I know it will never be your fault but if you feel so strongly about it, why don't you go abroad? See how other tax systems treat cheats. The UK won't miss the no tax you are too important to pay.

Proper mad rant this. Worst thing is, I haven't even had a drink - just been working for 13 hours. Could have knocked it on the head at 4 if I didn't pay my tax couldn't I? I wish I was smart big businessman like you!

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to AnnAccountant
09th Dec 2017 09:37

I sometimes wonder if you fully read and appreciate some of the blogs. Not wishing to bore others or be seen to be trolling, I find it is yourself who fails to understand and simply bury your head assuming EVERYONE is guilty because 'YOU' have decided these arrangements were ALL false, period.

For the record I have never said the loan did not, nor does not need to be repaid!!, and indeed 'on sale' of the investment it will and indeed MUST be repaid otherwise how else can it be extracted from the company the money was loaned to !!! I fail to see (and you again fail to explain) how it's possible to do this, certainly without paying tax. And for the record, I am more than happy to pay tax when 'I' personally benefit, NOT before.

Furthermore, interest is charged on the loan and there is security on the loan which remains.

It's totally foolhardy to compare a loan to teenagers when loans are made to companies for 'commercial reasons' or are you suggesting that companies who are involved in property development projects for profit do not carry out 'commercial activity'?

Ann, I am not about to lower myself in to personal rants and slanderous comment, just to say the following, if Company A has say £5 mln in taxed earnings, and loans the money to Company B on commercial terms with security (and I own both companies) is that taxable on me personally (under paye/nic) at the time of the loan?

So the fact I contribute the £5mln to a Trust (for asset protection reasons, making no tax deduction in Company A), and the Trust makes an identical loan on same commercial terms to Company B, why should that be taxable on me under paye and nic and how have I personally benefitted?

When the property development project is complete, Company B WILL make repayment to the Trust and if the Trust makes a distribution to me thereafter of whatever amount, I am perfectly happy to pay my tax at THAT time.

What HMRC are saying is this, (1) under the Rangers principle, even IF repayment of the loan from Company B to the Trust takes place, they will continue to argue with me over Disguised Remuneration even though they accept the money sits back in the Trust.

Whether they will continue with this argument I do not know, but it makes repayment of the loan more difficult without clarity from HMRC.

Furthermore, and I assume this is what HMRC are waiting for is (2) the latest legislation change to say all Trust loans must be repaid by 5/4/2019 otherwise DR charges apply regardless other challenges.

By their action I have had to put the property development project up for sale (prior to completion and at a far lower price for a quick sale) in the hope I can raise the money before 5/4/2019.

And if that sale doesn't happen before 5/4/2019 then I get a paye/nic tax demand on thin air!!

Before you rant anymore and ignore all facts simply to argue about tax cheats, explain to me where I personally have gained? Company A gained and paid tax on its profits. The Trust has gained by loaning the money contributed by Company A, and will pay tax on profits earned. Company B will gain on the profit from the property development project and will pay tax.

Companies and Trusts are separate legal entities under the law, so why should I, as a separate legal entity, be charged tax on income I haven't had just because HMRC decide to invoke new legislation applying it retrospectively to loans made before anyone knew the implications of their actions? Hardly at all fair!!

Ann, you appear to harbour a deep dislike to successful people, I am not arguing people should not pay their fair share of tax, just pointing out that some of us tied up in this mess ARE being unfairly stung.

However, for those that have benefitted by a loophole in the law and the appallingly slow actions of HMRC to close that loophole, I think they should be allowed a fairer way to sort this matter out. My sympathy to them is yes you have had benefit, and if you've taken loans and spent the money in the belief you had no tax to pay, then being hit hard by HMRC to the point of personal bankruptcy is NOT the way to do this. HMRC are most certainly complicit in 20 years of uncertainty but they choose the holier than thou approach. we have allowed them to become judge jury and executioner and y0u seem to rejoice at that!

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to Exfoliate
09th Dec 2017 18:07

"So the fact I contribute the £5mln to a Trust"

There you go. There's the benefit. Those funds have been set aside for you. The company has put money into a trust and you are entitled to the contents of the trust.

Just because the asset is not currently in liquid form (it having been loaned to another company) does not mean there is no benefit to you - or that it is "thin air" (as you put it).

Or maybe I should go and give the bank some "thin air" in satisfaction of my mortgage - it being a loan asset that they hold. Anyone got a jar with a tight lid?

There goes another one of your views - demolished by stupidly simple logic - at least you thought that "thin air asset" argument up yourself rather than paying tens of thousands for it like you did for the "teenager's loan planning" idea ;)

As I suggested, you seem to have this idea that a taxable benefit must be a transfer of money into your bank or the like. That has never been the case at all.

You must know that not all benefits are cash and not all assets are liquid. Also, you must know that the "PAYE trigger" (especially for directors) can be much earlier than when remuneration is actually paid out in cash.

I'm guessing that the reason those funds went via the trust was to "set them aside" for you so they could be distributed (or more likely, "lent" under the standard EBT or "teenagers loan planning" as I might start calling it) to you (with no PAYE) once the project was complete and the trust's assets became liquid again.

Otherwise Co A could just have lent the money directly to B (or something of that ilk) and your ultimate extraction might have been as dividends or via liquidation. (Ironically a distribution at 10% under ER might have been less than the planner's fees?)

The involvement of the trust looks to have been motivated by personal tax benefits.

So there you go. I've explained the benefit that you have received - albeit it might not yet be in cash.

I think it is disingenous for you (especially if you are an accountant) to pretend to fail to see the asset or the benefit here. The benefits and the asset are as plain as day and from Day 1 you had a plan as to how this would end and how you would pocket the money - the only real difference between you and the other EBTers is that your extractions haven't been pulled out in liquid form yet.

Finally and btw,
No problem at all with successful people. I have a lot of respect for many. Just not the type that wrongly think that one of the traits of being a businessman is to dodge his tax and do whatever it takes to get as much money as he can.

Indeed, the most successful people I know are the most honest. Its the ones who have aspirations to be in the above category (but probably never will) who you seem to have to watch. All in my experience. YMMV - as I believe the cool kids currently say on Twitter ;)

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to AnnAccountant
10th Dec 2017 11:19

If you follow that argument you may as well dismiss Corporation Tax for companies who are owned 100% by an individual and charge Income Tax and Paye on the profits.

Your argument is based on 'your' guessing and 'your' surmise of what 'I' intend to do with the money, which until it actually happens 'no one knows', let alone it's a bit arrogant of you to suggest 'you' know better than me what 'my' intentions are don't you think?

Are we now to tax on intentions of individuals surmised by HMRC , or in this case by 'you'?

The fact I did not NEED this money personally, I already had enough, and the trust was set up and addressed in legal documents at IPO to benefit 'present and future employees and directors' does NOT mean its any more intended for 'me' than if the money sits in a company I own 100% of!

You seem to suggest YOU are ALL knowing of what 'my' intentions are and therefore I should be taxed accordingly to YOUR thoughts on what I 'may' do. That's such an arrogant approach.

Also if you are judge jury and executioner as HMRC seem to appear to want to be, then we are all in for a very hard time !!

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to AnnAccountant
10th Dec 2017 12:09

And one more thing to counter your argument. Even HMRC by way of latest legislation (which contradicts their previous arguments) suggests they accept loans repaid in 'cash' by 5/4/2019 will not be caught so suggesting the contribution isn't really the deciding factor in all this. That said they seem to argue anything that makes money for them will suffice, as do you.

And if you continue to suggest as you have done that "You must know that not all benefits are cash and not all assets are liquid" then should it not be FAIR for HMRC to suggest loans can be repaid in non liquid form?

Once again one rule for one, one rule for another, and HMRC hold all the cards!

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to Exfoliate
10th Dec 2017 14:25

My guesses at how the scheme is planned to unfold are just so I could comment on how the future might unfold. It doesn't affect the tax liabilities in play now, setting asides of assets into trusts etc etc - and that are still assets. All that is still fine.

I see you don't address my main demolition of your disingenuous logic and misleading comments you have made about all the thin air you seem to think you haven't had.

Anyway, Im completely done with you.
Either you do understand and are being pretending not to, or you actually don't understand.

Whichever it is, I give up.

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to AnnAccountant
11th Dec 2017 09:12

I too don't wish continued debate with someone who buries her head in the sand and makes presumptions based on 'guilt' by way of association and ignores substance over form.

But I cannot leave you to suggest disingenuous logic and misleading comment.

My 'Thin air' comment comes from me simply moving money from my left pocket to my right pocket and being charged 62% for that action. In my left pocket the money sits in a company and the only way to take the money out of that pocket for personal use is to pay tax, the only way to take money in my right pocket which sits in a company out for personal use is to pay tax. The trust was used to facilitate asset protection and the movement of funds.

I challenged you before and you failed to answer me: If you can show me how I can now take money out for personal benefit from either the company/trust and avoid tax on doing so then I'm all ears. If not then 'when' a decision is made then tax is payable and NOT before. Unless you again was to suggest you/HMRC have the right to make that decision, which you/they don't!

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to justsotax
14th Dec 2017 10:15

I would be happy to just get some support from the accounting profession for the principle that HMRC should pursue the organisers of these schemes with the same venom as they have directed towards individual contractors. If HMRC used the Rangers Supreme Court verdict (instead of just vaguely gesturing towards it and saying “see! We told you all along that this didn’t work. Never mind who the judge said actually owes tax. Pay up like a good little ‘customer’.”) then they now have the possibility of pursuing the employers for PAYE liabilities from prior years or seek to transfer those liabilities to the directors of those companies where they have been wound up.
HMRCs actual approach of seeking to pin 100% of the liabilty on the contractors in ALL cases lets the organisers (who owned the umbrella company) entirely off the hook. They are now toasting their good fortune aboard their yachts.

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to HMRCVictim
18th Dec 2017 10:50

The question to ask organisers and advisors who historically recommended these arrangements (aka Andrew Robins) is did they similarly use these schemes and if not why not?

If they did (as one would rightly expect) then why are they not leading a revolt against twenty year old law change and retrospective legislation on behalf of their clients and indeed themselves? Or am I being naïve that advisors just offer advice but don't personally get involved in their advice.

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11th Dec 2017 11:07

it is an unfortunate truth that it is not the majority of accountants on here that you need to persuade. Most of us made a decision about schemes many years ago, before any 'retrospective' legislation was even brought in.

Ann...I wouldn't bother arguing, they are in denial looking for support from those who actually have some credibility (as the guys they took the advice from originally haven't got any left).....the basis for these schemes is to confuse and misdirect....as mentioned previously.

Easy solution...repay the loans by 2019....

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to justsotax
11th Dec 2017 11:36

"Easy solution...... repay the loans by 2019"

If you don't properly read the blogs then why comment.

It's no so easy to liquidate in a short time long term property development projects (which aren't complete) without commercially damaging the finances of the development company, albeit that's what we are now forced to do as a result of this retrospective legislation. That must be obvious no ?

The flaw in the legislation is demanding the loans are repaid within short time but particularly in "cash" to avoid the DR charge.

A commercial loan was made by the trust to a company in 2009 and there was no tax benefit. The loan is legally repayable with interest/profit on realisation of the property. That's a simple commercial every day transaction. Why should retrospective legislation therefore put a hammer through what is a commercial transaction that everyone earns from, pays more tax and does not seek tax avoidance? If as you say you have some credibility, maybe you can offer a credible answer?

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to justsotax
11th Dec 2017 11:39

Yes, I'm giving up. He is in denial and refuses even to acknowledge or understand simple concepts. He isn't even making sense, in my humble.

I should have given up a while ago. He was fun for a bit, but he hasn't been for a couple of posts now.

I'm just glad I have some handle (as best as I'll get from him anyway!) on his "special circumstances" that mean "he wuz robbed" - and it looks as though he hasn't been. So I won't feel too bad when he's at the Jag dealer instead of the Bentley dealer!

Anyway, back to my (honest) clients! :)

See you in March 2019's blog comments Exfoliate ;)

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to AnnAccountant
11th Dec 2017 15:00

OK tweedle dee and tweedle dum you've had your fun.

There's definitely one big difference between those on both sides of the fence here. I don't see those affected by retrospective legislation and facing bankruptcy demeaning, abusing or being down right rude as you seem to be. I just hope you get on the receiving end of something you see as unfair, whatever that may be. Although you seem to assume you are too clever to ever get caught out. Good for you !

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11th Dec 2017 16:55

abused, demeaning, rude...not sure I have seen anything that supports that....lack of support, maybe, you may suggest a 'told you so' attitude, but the reality is that many of us would not have had anything to do with these schemes.

In reality there is few if any accountants who would normally support a Revenue approach which goes against the spirit of the legislation. I am sure I am just one of many that are constantly defending clients who are being challenged by the Revenue.

I perhaps would compare the current situation you find yourself in (in my perception) as one where you have been found guilty of reckless driving albeit under the speed limit. For me you have not driven in accordance with the road conditions....with due diligence and care...of course you have been encouraged by the passenger...but you are the driver, one apparently wishing to blame the passenger, and claim that you were driving within the limits....all maybe true to an extent but you signed off.

I hope I don't get 'caught out' but if I do I hope I can look on the situation and take responsibility for my actions...

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to justsotax
12th Dec 2017 10:28

“abused, demeaning, rude...not sure I have seen anything that supports that”

I think where descriptions of doubt about a person’s professional credentials and honesty are raised in a blog then they can be described as “abusive, demeaning and rude” – so please re-read some of those blogs once again to understand my issue.

Your point of reckless driving whilst below the speed limit, is not lost on me. However simplistic, it is an individual’s perception of ‘reckless driving’ and the relevant fine that is imposed (some are indeed far more reckless than others) that concerns, and is a lot of what this blog has been about.

There are clear differences of opinion and those arguing on the side of the ‘new retrospective legislation’ and its impact have I believe adopted a similar and worrying example of what HMRC are attempting, ‘judge, jury and executioner with no regard to particular facts, grouping everyone as ‘guilty’.

Now even the Chartered Institute of Taxation (CIT) recently set out its response to draft legislation concerning DR Avoidance Schemes, dealing specifically with the Close Company Gateway (CCG) and providing in its response a similar but not exact (to mine) example of how the legislation falls short.

Furthermore, CIT go on to review their agreement to the avoidance purpose condition of the legislation which introduced a motive test to the CCG. CIT responded that “whilst we agree that genuine commercial arrangements should not pass through the gateway, the definition of avoidance is continually evolving and changing and remains unclear”.

Now whilst I firmly believe that I undertook a genuine commercial arrangement and whilst I firmly believe I have not avoided income tax, (this will be paid when and if I were to ‘personally’ extract the funds for my own benefit), there are so many side words to legislation these days that create a confusion as to their meaning and intent. Indeed I think you would agree that for over 20 years, meaning and intent of legislation on all EBT schemes has not been clarified to allow an individual to properly plan, and I think that is the major issue many have been blogging about.

To come back to your simplistic point, a charge of reckless driving could refer to driving under the speed limit but just too fast for the conditions (but that’s an opinion of one person over another), and regrettably the law does not assist in clarity of the definition. It may be too hard as there are too many different circumstances, let alone what was not deemed reckless driving 20 years ago may today be deemed as such. I think again that is a point of principle of many of the bloggers.

A hundred years or so ago you could probably smack someone in the face because they verbally abused you and that was deemed lawful (although probably frowned upon by many), today it is not lawful and you pay the penalty.

The arguments put forward on this blog by those that have used EBT schemes to avoid tax (and I don’t include myself here but your ‘opinion’ is different) is that “yes in hindsight what we did was probably frowned upon by many, but it wasn’t against the law'.

Much like I suppose, those law makers today who maybe indulged in sexual gratification by abusing their power would argue what they did was and is not against the law. I am sure the law will change but regrettably those abusers will get away with it because the law in such cases will not be in-acted RETROSPECTIVELY !

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12th Dec 2017 15:58

I don't pretend to know the details of your case, and it may well be the case that throught the 'laws of unintended consequences' you have been picked upon unfairly. But that is only as a result of others who claim the EBT scheme was in someway a commercial above board transaction. It can clearly be seen in a number of high profile cases that complex networks of companies and trusts in far off places have been used to 'fall within the law'....no matter how uncommerical and artifical.

Just like the abuse scandal....what is wrong now....was wrong 20 years ago....people may have turned a blind eye....some accepted and not challenged things, but just because people were not prosecuted does not make it right. As for retrospective...well you only have to see the fall out to see that things haven't simply been brushed over....people have now had their careers tarnished/sullied and in some cases are under investigation/prosecution.

It is possibly unfortunate that you have got grouped with the greedy businesses and individuals who simply wished to avoid paying any tax, rather paying massive fees to barristers and scheme providers.

Perhaps in the end we are both victims....accountants getting grouped with scheme providers, and you with those tax evaders.

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to justsotax
12th Dec 2017 17:41

I agree entirely. Accountants have been on the receiving end of this too and you’ll not find me blaming all accountants or salesman for selling dodgy looking schemes, I guess it all comes down to how it was sold.
Fyi -I didn’t pay massive fees to barristers and scheme providers either and was advised I think properly as to what the law was, albeit with caveats as to doubt.
I should have been more wary of course but did not and still do not see what I have done wrong, but that’s for me to now argue with my peers.
As to some of those who have saved tax (not the greedy stinking rich ones who lord it and can afford it, but those lower down the chain) I feel sympathy. Many simply did not have proper understanding of what they were doing, and let’s face it, it is complicated, many were advised by professionals they placed trust in it was all above board and frankly 20 years ago there were many tax dodgers about.
Even today we hear about Lewis Hamilton touching down on his inaugural private jet flight in Jersey for half an hour and saving what £20 million in VAT? – now that to me is very different to hard working individuals advised to save tax over twenty years and then finding out it ain’t so. Tax dodging still goes on as we all know and let’s hope they don’t spend 20 years resolving these new loopholes.
Tax avoidance was and is legal but we now have the new terminology of ‘aggressive tax avoidance’ and we all nod our heads in dis-approval, similar to all of us who disapprove of ministers and celebrities abusing power for sexual grace. That said a kiss on the cheek is very different from what is rape by any other name, but seemingly society is finding it difficult to distinguish between the two.
I can only keep repeating the two things I find uncomfortable with this 2017 DR legislation (a) if it was the law, then to follow the law albeit many disapprove, is quite different to breaking the law and the law should not be enforced retrospectively, and (b) to allow 20 years of that to have continued without resolution must place a great deal of responsibility on the law makers.
Closing a loophole is one thing, severely damaging decent hard working people who followed that 20 year loophole doesn’t sound like a compassionate caring or responsible society to me.
What really gets my goat though is hypocritical people such as Margaret Hodge a fierce critic of tax avoidance and "secretive" offshore funds and who according to reports received more than £1.5m in shares from the tax haven of Liechtenstein. The money apparently came through a controversial scheme that lets wealthy Britons move undeclared assets back to the UK without facing criminal action. I can only hope she’s not one of my peers I may have to appeal to!

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