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webberg
4th November 2015, 09:30
Rangers tax case appeal judgement to be issued on Wednesday - Football - Eurosport British (http://www.eurosport.co.uk/football/rangers-tax-case-appeal-judgement-to-be-issued-on-wednesday_sto4977169/story.shtml)

I have no idea what the source of the above might be, but if true this promises to be an interesting day!

webberg
4th November 2015, 09:36
Advocate General for Scotland v Murray Group Holdings and others - Media and Publications - Judiciary of Scotland (http://www.scotland-judiciary.org.uk/25/1513/Advocate-General-for-Scotland-v-Murray-Group-Holdings-and-others)

turnover
4th November 2015, 10:36
Advocate General for Scotland v Murray Group Holdings and others - Media and Publications - Judiciary of Scotland (http://www.scotland-judiciary.org.uk/25/1513/Advocate-General-for-Scotland-v-Murray-Group-Holdings-and-others)

Looks like HMRC won.

regron
4th November 2015, 10:37
Looks like HMRC won.

Yep, not good :mad

regron
4th November 2015, 10:44
Be interesting to see what this actually means though:


He added: “We accordingly conclude that the primary argument presented for HMRC is correct: the payments made by the respondents to the Trustee of the Principal Trust in respect of employees were emoluments or earnings and are accordingly subject to income tax. Furthermore, those payments were made at the time of payment to the trustee of the Principal Trust, with the result that the obligation to deduct tax under the PAYE system fell on the employer who made such a payment.”

webberg
4th November 2015, 10:48
I think the opening few lines on the commentary indicate an HMRC victory but...

We need to read and digest the whole decision.

We need to consider the differences between the case and other contractor situations

We need to consider just how applicable the decision might be.

We now, more than ever, need to explore alternative analysis if (and it's a very big if) the EBT argument is a bust.

Time for calm heads and cool brains.

DonkeyRhubarb
4th November 2015, 10:52
Be interesting to see what this actually means though:


He added: “We accordingly conclude that the primary argument presented for HMRC is correct: the payments made by the respondents to the Trustee of the Principal Trust in respect of employees were emoluments or earnings and are accordingly subject to income tax. Furthermore, those payments were made at the time of payment to the trustee of the Principal Trust, with the result that the obligation to deduct tax under the PAYE system fell on the employer who made such a payment.”

Or, in your case, the scheme provider?

webberg
4th November 2015, 10:55
Or, in your case, the scheme provider?

Agreed.

The assessments at the heart of this decision are on the EMPLOYER for PAYE.

A key difference.

Also the judgement requires that the trustee operates at the "request" of the beneficiary. This is partly peculiar to Scottish trusts which have the "protector" clauses. Another key difference.

We will have to await the full decision later today to study other differences.

ASB
4th November 2015, 11:05
Given the PAYE obligaton falls on the employer in the context of EBT schemes this would presumably mean the promoter (or similar). Not the user, at least for those where the user was not self employed.

The follow up question is whether that liability can be transferred to the user. Generally this is not the case with unpaid paye obligations.

Could it be the case that this become a somewhat pyrrhic judgement for HMRC (assuming it stands) in as much as it may not impact users and the employers at the time are now long gone.

webberg
4th November 2015, 11:09
Given the PAYE obligaton falls on the employer in the context of EBT schemes this would presumably mean the promoter (or similar). Not the user, at least for those where the user was not self employed.

The follow up question is whether that liability can be transferred to the user. Generally this is not the case with unpaid paye obligations.

Could it be the case that this become a somewhat pyrrhic judgement for HMRC (assuming it stands) in as much as it may not impact users and the employers at the time are now long gone.

Good points above and ones that will be tested in the months ahead.

Whysoserious
4th November 2015, 11:10
Not really as presumably they can now go after every football club in the land for unpaid PAYE as every football club in the land operated similar schemes.

Say bye bye to Man Utd, Chelsea, Liverpool, Arsenal.....

webberg
4th November 2015, 11:39
Not really as presumably they can now go after every football club in the land for unpaid PAYE as every football club in the land operated similar schemes.

Say bye bye to Man Utd, Chelsea, Liverpool, Arsenal.....

Not so sure that other clubs did.

My involvement in that world is limited but of the three I do know something about, they either never used this type of scheme or abandoned it and have reached an agreement with HMRC long ago.

If however the scheme was popular in the sports companies, why not include rugby, cricket, hockey etc. Perhaps not the stellar numbers or names but a lot of them?

BolshieBastard
4th November 2015, 11:49
Not really as presumably they can now go after every football club in the land for unpaid PAYE as every football club in the land operated similar schemes.

There's absolutely not a shred of evidence to support your assertion


Say bye bye to Man Utd, Chelsea, Liverpool, Arsenal.....

Hardly. Only Rangers seem to have used this scheme amongst football clubs.

convict
4th November 2015, 12:12
No doubt the HMRC propaganda machine will spew out more crap using well prepared statements shortly

BrilloPad
4th November 2015, 12:16
In theory, can Rangers/Murray group appeal? Or is this the end of the road?

Whysoserious
4th November 2015, 12:27
There's absolutely not a shred of evidence to support your assertion



Hardly. Only Rangers seem to have used this scheme amongst football clubs.


There are 8 premier league clubs being investigated for using EBTs.

webberg
4th November 2015, 12:28
In theory, can Rangers/Murray group appeal? Or is this the end of the road?

I think an appeal should be possible but...

Murray Group has no/low funds. I'm presuming (until corrected) that the administrator/liquidator will have to decide if there is any benefit to the creditors in continuing the fight if HMRC stand to take a majority of whatever funds/assets there are.

If their story ends here then we must look elsewhere for an answer and that might be one of the cases being prepared now or some form of HMRC graciousness in victory (and that is as likely as me being declared president of the world tomorrow afternoon).

PerfectStorm
4th November 2015, 12:59
In theory, can Rangers/Murray group appeal? Or is this the end of the road?

Depends. Did they purchase IPSE+?

BolshieBastard
4th November 2015, 13:01
There are 8 premier league clubs being investigated for using EBTs.

Yes, I noticed you've started the backstroke.

As I said, there isnt a shred of evidence to support your assertion, which is the clubs you mentioned had used the EBT model never mind its 'bye, bye' to them.

DonkeyRhubarb
4th November 2015, 13:17
There are time limits for assessing PAYE.

Other than in the case of fraud, HMRC can only go back 6 years.

That means 2008/9, and prior years, are out of time.

jamesbond007
4th November 2015, 13:31
There are time limits for assessing PAYE.

Other than in the case of fraud, HMRC can only go back 6 years.

That means 2008/9, and prior years, are out of time.

So from what I have read the judges confirmed that the responsibility for the payment of tax fell on the employer in each case.

So am I right in thinking that this judgement only relates to PAYE due by the companies we were employed by at the time, therefore under this ruling they (if they are still around) will be liable for the tax and NOT the employees?

webberg
4th November 2015, 13:38
So from what I have read the judges confirmed that the responsibility for the payment of tax fell on the employer in each case.

So am I right in thinking that this judgement only relates to PAYE due by the companies we were employed by at the time, therefore under this ruling they (if they are still around) will be liable for the tax and NOT the employees?

Perhaps a bit hasty but the assessments were for PAYE due from the employer. As these are employer obligations, the ability of HMRC to visit the tax upon recipients is limited.

There are circumstances in which PAYE can be demanded from employees and for those recipients in positions of influence and control of the companies, this is a higher risk. For the players? Probably a less obvious problem.

There are further implications here as well and a thorough reading (and re-reading) is probably required before any public comment.

AtW
4th November 2015, 13:51
Surely if scheme provider is liable for tax then they would be forced to call in the "loans" they gave to scheme users...

DonkeyRhubarb
4th November 2015, 14:02
Surely if scheme provider is liable for tax then they would be forced to call in the "loans" they gave to scheme users...

Typically, the loans were issued by Trusts not the companies themselves.

There are strict rules governing Trusts. One is they can't do anything to the detriment of the beneficiaries. Obviously, calling the loans in would be detrimental...

ASB
4th November 2015, 15:18
I wonder if any of the contracts signed by scheme users contained any indemnities back to the "employer" and whether these might be effective ?

I realise any indemnity would not help HMRC in transferring any debt, but it might be an avenue of attack against the scheme users if the scheme provider were ultimately held liable.

Of course there are huge leaps there in assuming that this ruling will stand and will also apply, but it is further case law which may possibly be relevant to some scheme users.

Not Losing Any Sleep
4th November 2015, 15:19
I wonder if any of the contracts signed by scheme users contained any indemnities back to the "employer" and whether these might be effective ?

I realise any indemnity would not help HMRC in transferring any debt, but it might be an avenue of attack against the scheme users if the scheme provider were ultimately held liable.

Of course there are huge leaps there in assuming that this ruling will stand and will also apply, but it is further case law which may possibly be relevant to some scheme users.



Judgement now out.

Judgment (http://www.scotcourts.gov.uk/search-judgments/judgment?id=8213f5a6-8980-69d2-b500-ff0000d74aa7)

AtW
4th November 2015, 15:20
Typically, the loans were issued by Trusts not the companies themselves. There are strict rules governing Trusts. One is they can't do anything to the detriment of the beneficiaries. Obviously, calling the loans in would be detrimental...

But if the court says it's not a loan, but "emoluments or earnings"? Recalling the part of the loan sufficient to cover taxes seems a no-brainer, especially since court said those ain't loans - surely that should be enough to question creation of the Trust itself since the only funding it had was for those "loans"? The Revenue might just not bother and issue APNs.

webberg
4th November 2015, 15:40
But if the court says it's not a loan, but "emoluments or earnings"? Recalling the part of the loan sufficient to cover taxes seems a no-brainer, especially since court said those ain't loans - surely that should be enough to question creation of the Trust itself since the only funding it had was for those "loans"? The Revenue might just not bother and issue APNs.

The Court is hearing tax matters, not matters of legal construction or trust law.

The loans are loans in legal form. The trust did not get a loan but a contribution and that would not be reclaimable.

APN has been done to death elsewhere.

To get an APN you need to have met the conditions of

1. Open year
2. Claim made that arrangements produce a tax benefit
3. DOTAS/GAAR/FN

You need all three. Nothing in the decision changes that.

DonkeyRhubarb
4th November 2015, 16:53
If a court ruled that the contractor loans should have been treated as earnings from employment then HMRC could be in a spot of bother.

They would first have to chase the employers for tax and class 1 primary & secondary nics.

Getting the liability transferred to the employees under either Reg 72 or 81 would not be easy, and then there's the 6-year time limit to contend with anyway.

I've always felt that it was a bit convenient of HMRC to treat the loans as other income so they could pursue the individuals rather than the employers. But is that the correct tax treatment? Hmmm.

Definitely worthy of further investigation.

DonkeyRhubarb
4th November 2015, 17:28
ps. it would be a bit of poetic justice if HMRC had to chase the employers (promoters).

For too many years, the promoters have got away scott free raking in £millions. It's about time they shared a bit of the pain.

And, if HMRC can't collect off them, well that's their problem.

regron
4th November 2015, 17:29
Yeah, kind of feels like more of a stalemate ruling. Also, I am probably reading too much into this but I find it interesting that there is yet to be an official statement from HMRC. I would have thought they would have been out doing their victory lap the minute the judgment went public. They certainly were when the judicial review announcement came out. For now I will treat their lack of communication as positive, it will at least make me feel better....for now :happy

AtW
4th November 2015, 17:46
And, if HMRC can't collect off them, well that's their problem.

But surely, ultimately it's the individual who is responsible for his own tax affairs, say if employer failed to take income tax and employee NIC at the source, then does it mean that the person who was employed get off with tax free money? Scheme providers are offshore or shut down, so HMRC can't get much from them.

Samatra
4th November 2015, 17:59
But surely, ultimately it's the individual who is responsible for his own tax affairs, say if employer failed to take income tax and employee NIC at the source, then does it mean that the person who was employed get off with tax free money? Scheme providers are offshore or shut down, so HMRC can't get much from them.

"Scheme providers are offshore or shut down, so HMRC can't get much from them"

That why they are coming after us. Treating the income as other rather than from employment.
I am currently PAYE (Perm not EBT scheme) and expect my employer to pay my taxes.

jbryce
4th November 2015, 18:23
But surely, ultimately it's the individual who is responsible for his own tax affairs, say if employer failed to take income tax and employee NIC at the source, then does it mean that the person who was employed get off with tax free money? Scheme providers are offshore or shut down, so HMRC can't get much from them.
Err no HMRC would initially have to come after the company. Scheme providers were offsore, but some also had UK registered addresses.
My account just read the judgement and feels that the HMRC may have won the case, but the judgement around employer responsibility does muddy the waters somewhat.

...and on we go....

Join the big group.

Underbase
4th November 2015, 19:40
But surely, ultimately it's the individual who is responsible for his own tax affairs, say if employer failed to take income tax and employee NIC at the source, then does it mean that the person who was employed get off with tax free money? Scheme providers are offshore or shut down, so HMRC can't get much from them.

Look at it another way. What if your employer did take tax off you and went bust never handing the cash to HMRC. Would you still expect them to extract it from you?

DonkeyRhubarb
4th November 2015, 19:40
But surely, ultimately it's the individual who is responsible for his own tax affairs, say if employer failed to take income tax and employee NIC at the source, NO then does it mean that the person who was employed get off with tax free money? YES

Any company which employs people is legally required to operate PAYE. The deduction of employee taxes and nics is solely the company's responsibility.

AtW
4th November 2015, 19:57
Look at it another way. What if your employer did take tax off you and went bust never handing the cash to HMRC. Would you still expect them to extract it from you?

Good question. I would actually expect HMRC to try to extract it one way or another - unless there is already (must be) precedent that covers it, not saying it's right thing here.

In this case however employer did not take off required tax in the first place - money were passed in form of "loans" which were not deemed employment income. Only thing deducted were the fees to scheme provider, but that's between user and provider.

Dylan
4th November 2015, 20:00
Good question. I would actually expect HMRC to try to extract it one way or another - unless there is already (must be) precedent that covers it, not saying it's right thing here.

In this case however employer did not take off required tax in the first place - money were passed in form of "loans" which were not deemed employment income. Only thing deducted were the fees to scheme provider, but that's between user and provider.

The loans were from a trust, not from the employer.

The employer settled money in to the trust but if it being considered as PAYE income then the income has effectively been deemed to have been given to the employee prior to the loan existing.

AtW
4th November 2015, 20:10
The loans were from a trust, not from the employer. The employer settled money in to the trust but if it being considered as PAYE income then the income has effectively been deemed to have been given to the employee prior to the loan existing.

Indeed, and there were no PAYE deductions from those amounts, so the employee got all money (the fee paid to scheme provider is irrelevant here - it's a matter between them).

So employee is on the hook for PAYE tax, while still owing money to the trust...

Dylan
4th November 2015, 20:17
Indeed, and there were no PAYE deductions from those amounts, so the employee got all money (the fee paid to scheme provider is irrelevant here - it's a matter between them).

So employee is on the hook for PAYE tax, while still owing money to the trust...

And yet the court thought otherwise. Lots of debate and analysis to come...

DonkeyRhubarb
4th November 2015, 20:21
Indeed, and there were no PAYE deductions from those amounts, so the employee got all money (the fee paid to scheme provider is irrelevant here - it's a matter between them).

So employee is on the hook for PAYE tax, while still owing money to the trust...

I thought I remembered you.

DFTT

Edinburgh IT PM
4th November 2015, 20:33
The Rangers big tax verdict says that the loans should be classed as earnings (not other income), and the PAYE is due from the employer (not me, the employee).
Does this mean HMRC will pay me back all the money I paid them for the APN?
(sorry this is my first post - didn't realise the done thing is to reply - not post a new heading - ooops)

LandRover
4th November 2015, 21:34
The Rangers big tax verdict says that the loans should be classed as earnings (not other income), and the PAYE is due from the employer (not me, the employee).
Does this mean HMRC will pay me back all the money I paid them for the APN?
(sorry this is my first post - didn't realise the done thing is to reply - not post a new heading - ooops)

Sorry but does not read that way to me. As yes it mentions PAYE and the Principal Trust near end...

Judgment (http://www.scotcourts.gov.uk/search-judgments/judgment?id=8213f5a6-8980-69d2-b500-ff0000d74aa7)

"In view of our conclusion that the payment to the Principal Trust constituted emoluments or earnings, we do not find it necessary to reach a decision on the foregoing arguments."

Underbase
4th November 2015, 21:37
And yet the court thought otherwise. Lots of debate and analysis to come...

It's interesting, if you tried to put it in context for a contractor EBT. There were the people that ran the scheme, they were in a competitive market place with umbrellas etc. They used EBT structures to reduce the amount of PAYE and NICS so they could gain a competitive advantage by offering their employees a higher "pay". Which is starting to sound more like the Rangers case. So if that is the case, then HRMC should in the first instance go after them. There is no suggestion from the courts that they could go after the employees. It could be a very interesting angle to attack on, however there is no chance a scheme provider will use a fighting fund to help with this argument.

EBTContractor
4th November 2015, 21:43
Money gone. Can't see it being returned!

AtW
4th November 2015, 21:49
I thought I remembered you. DFTT

I am sorry I did not know you had the right to decide who posts in this thread.

jbryce
4th November 2015, 22:09
Sorry but does not read that way to me. As yes it mentions PAYE and the Principal Trust near end...

Judgment (http://www.scotcourts.gov.uk/search-judgments/judgment?id=8213f5a6-8980-69d2-b500-ff0000d74aa7)

"In view of our conclusion that the payment to the Principal Trust constituted emoluments or earnings, we do not find it necessary to reach a decision on the foregoing arguments."

Still doesn't clear it up. My account's view is that the judgement does two things:
1. Payment to the trust constituted earnings.
2. The employer should is responsible for PAYE. Uh? I said. 'Well' said my accountant 'if payment into the trust is earnings and that was paid by the employer/scheme then they should have paid the PAYE".

However, I do have a letter from HMRC, somewhere, saying that Rangers isn't relevant. Whatever - they have the APN money - we're not going to get it back.

I rekon Webberg will have a more joined up view......

DotasScandal
4th November 2015, 22:16
The Rangers big tax verdict says that the loans should be classed as earnings (not other income), and the PAYE is due from the employer (not me, the employee).
Does this mean HMRC will pay me back all the money I paid them for the APN?
(sorry this is my first post - didn't realise the done thing is to reply - not post a new heading - ooops)

Were you employed by Rangers?
If not, then this has nothing to do with your APN.

centurian
5th November 2015, 06:27
However, I do have a letter from HMRC, somewhere, saying that Rangers isn't relevant. Whatever - they have the APN money - we're not going to get it back.

It's only irrelevant when they lose.

Either way, I think it's more than just a binary matter. Parts will be relevant, parts will not.

Look, there's no sugar coating it. An EBT defeat is bad for all EBT schemes, so yesterday was a bad day overall for anyone in an EBT scheme. It will give HMRC some hooks to latch onto, plus also allow them to justify the continued pursuit of EBTs.

But how translatable that is to the specifics of contractor EBT schemes remains to be seen.

DonkeyRhubarb
5th November 2015, 07:14
I am sorry I did not know you had the right to decide who posts in this thread.

Хуй

LandRover
5th November 2015, 07:39
After yesterday, I feel more strongly that "Big Group" approach is the only real solution in town for those who want to bring all this nightmare to an end. Thinking that the courts are going to decide with the appeals process etc will mean years of grief, it really wears you out. Sadly. I don't believe the judicial system is immune from political influence either.

steveb555
5th November 2015, 07:56
...... Sadly. I don't believe the judicial system is immune from political influence either.

This was precisely my initial thought upon hearing the result. After two previous resounding defeats judged on the legal aspects of the case I believe our govt have now 'bought' this decision.

dirk
5th November 2015, 08:31
This was precisely my initial thought upon hearing the result. After two previous resounding defeats judged on the legal aspects of the case I believe our govt have now 'bought' this decision.

I thought the same. Something fishy about this decision. Even the wording sounds like David Gauke-esq.

ASB
5th November 2015, 09:17
Any company which employs people is legally required to operate PAYE. The deduction of employee taxes and nics is solely the company's responsibility.

If there is a uk/host employer then that is usually the case.

However, where there is an overseas employer and there is not a UK subsidiary (or someone who can be regarded as the host employer) then there is nothing to force the overseas employer to register for PAYE. The employer can indeed pay gross and the individual discharge the tax/ni liability through direct payments.

PAYE20100 - Employer records: set up employer record: DPNI scheme - direct payment (tax and NIC) (http://www.hmrc.gov.uk/manuals/pommanual/paye20100.htm)

If there isn't a UK employer it may be simpler for HMRC to target the individual rather than attempt to transfer liability from a now defunct employer.

Ultimately it seems that if loans are to be treated as emoluments then the responsibility for the PAYE rests with whoever it would have rested with were it just regular salary. If the employer was operating PAYE (and I assume that this was generally the case) then transfer of this liability to the individual has some significant hurdles to cross. If the employer was not operating PAYE then it may not be so difficult since it may be covered by the direct payments regime.

DonkeyRhubarb
5th November 2015, 09:32
If there is a uk/host employer then that is usually the case.

However, where there is an overseas employer and there is not a UK subsidiary (or someone who can be regarded as the host employer) then there is nothing to force the overseas employer to register for PAYE. The employer can indeed pay gross and the individual discharge the tax/ni liability through direct payments.

PAYE20100 - Employer records: set up employer record: DPNI scheme - direct payment (tax and NIC) (http://www.hmrc.gov.uk/manuals/pommanual/paye20100.htm)

If there isn't a UK employer it may be simpler for HMRC to target the individual rather than attempt to transfer liability from a now defunct employer.

Ultimately it seems that if loans are to be treated as emoluments then the responsibility for the PAYE rests with whoever it would have rested with were it just regular salary. If the employer was operating PAYE (and I assume that this was generally the case) then transfer of this liability to the individual has some significant hurdles to cross. If the employer was not operating PAYE then it may not be so difficult since it may be covered by the direct payments regime.

Spot on.

From what I understand, most of the promoters were IoM based, and the users would have had a contract of employment with an IoM company.

Some may not have operated PAYE at all, and instead paid the users the small salary gross which they would have declared through self-assessment.

As for those promoters that did operate PAYE on the small salary, assuming the loans were deemed to be emoluments, the question is who is on the hook for the outstanding tax/nic, the company or the employees?

webberg
5th November 2015, 09:41
Not that it helps advance the debate much, but I was at a dinner last night (hence not posting) with a group of tax barristers.

(I know how to live!:smokin)

They had a theory that the Judges had been "nobbled" as HMRC has a real issue with the designers of the scheme, who unfortunately appear in other schemes as well.

They also advanced the theory that a Supreme Court decision reversing this one would not be a surprise, but the question is whether the case would get that far as the liquidator may not have the funds.

I've had a couple of reads of the decision and will do another later but it's interesting that the Judges thought that the tax point arose at the time the employer paid the trust. That could be very important as it implies that the funds were the EMPLOYEES to dispose as he/she saw fit but did NOT remove the EMPLOYERS obligation to deduct tax.

I think Mr Rhubarb has alluded to this and I can see where he's coming from.

My full analysis will appear on Big Group forum first but given the importance of this decision, I'll post a version here over the weekend for critique/comment/analysis/whatever.

Just bear in mind that my opinion is no better than anybody else's at this stage and it will take weeks/months/years for the full implications to be understood.

Dylan
5th November 2015, 10:07
I read it the same, although waiting for a professional analysis from my representative.

DotasScandal
5th November 2015, 10:43
They had a theory that the Judges had been "nobbled"...

You don't say :rolleyes:
The summary had a Gaukesque tone to it IMO.
It just missed the word "repugnant". I guess the judge didn't want to be too obvious.;)
Farewell, separation of powers, I guess! It was nice knowing you...

StrengthInNumbers
5th November 2015, 15:16
After yesterday, I feel more strongly that "Big Group" approach is the only real solution in town for those who want to bring all this nightmare to an end. Thinking that the courts are going to decide with the appeals process etc will mean years of grief, it really wears you out. Sadly. I don't believe the judicial system is immune from political influence either.

And HMRC will listen to any group once they have decisions in their favour and APNs collected.
HMRC will gradually find a case to use FN and will make it too expensive to not settle.
Big group a great help but this can only end of a scheme wins in courts.

DotasScandal
5th November 2015, 16:50
And HMRC will listen to any group once they have decisions in their favour and APNs collected.
HMRC will gradually find a case to use FN and will make it too expensive to not settle.
Big group a great help but this can only end of a scheme wins in courts.

I guess you mean "won't listen"

WalterWhite
5th November 2015, 17:12
While the mainstream media seem to be portraying an HMRC victory I would point out the following facts from the judgement:

- contributions are tax deductible for the company
- loans to the employee are not taxable as income
- loans to the employee are deductible against IHT
- this is not deemed tax avoidance


Surely this is something Big Group can use?

DotasScandal
5th November 2015, 17:25
While the mainstream media seem to be portraying an HMRC victory (...)

As often, what we do not see happening is as interesting as what we do see happening.
In this case, I am missing the usual triumphant HMRC press release / flyer. Why?

When Judge Simler decided in their favour in the Rowe JR, the HMRC press release was out within a split second of the judgement.

Tomandjerry
5th November 2015, 19:08
As often, what we do not see happening is as interesting as what we do see happening.
In this case, I am missing the usual triumphant HMRC press release / flyer. Why?

When Judge Simler decided in their favour in the Rowe JR, the HMRC press release was out within a split second of the judgement.

Based on previous experience, what is to stop HMRC claiming this as supporting their case, issuing APNs then following up with Direct Recovery if you don't pay the APN?

In which case the ins and outs of the case are immaterial.

centurian
5th November 2015, 19:18
Based on previous experience, what is to stop HMRC claiming this as supporting their case, issuing APNs then following up with Direct Recovery if you don't pay the APN?

Simple answer - an appeal to the Supreme Court.

If there is no appeal, or the appeal is not granted, or the appeal is lost, then it becomes a "final judgement" - which is the trigger to allow them to issue FNs against similar schemes.

DcoC
5th November 2015, 21:40
Simple answer - an appeal to the Supreme Court.

If there is no appeal, or the appeal is not granted, or the appeal is lost, then it becomes a "final judgement" - which is the trigger to allow them to issue FNs against similar schemes.

Murray Group was a mess of companies under one umbrella. The only one left standing is Rangers, who are being managed by BDO

It is unclear if they have the desire to appeal. There is little left in the pot to cover their expenses, never mind a court case. HMRC have driven it to this stage, and only because they never won the case until now

LandRover
5th November 2015, 22:26
Murray Group was a mess of companies under one umbrella. The only one left standing is Rangers, who are being managed by BDO

It is unclear if they have the desire to appeal. There is little left in the pot to cover their expenses, never mind a court case. HMRC have driven it to this stage, and only because they never won the case until now

No appeal and this becomes very useful for hmrc, any similar schemes may be target of follower notices. Perhaps this was the aim of hmrc, as why keep going when they lost at ftt and then upper tribunal, they knew one decision in their favour would result in Murray group administrator having to fund an appeal, which is highly unlikely with no funds.

StrengthInNumbers
5th November 2015, 22:37
HMRC plays this game very well. Fight state is never easy.

centurian
6th November 2015, 07:18
No appeal and this becomes very useful for hmrc, any similar schemes may be target of follower notices. Perhaps this was the aim of hmrc, as why keep going when they lost at ftt and then upper tribunal, they knew one decision in their favour would result in Murray group administrator having to fund an appeal, which is highly unlikely with no funds.

I think this is straight out of their playbook. Go after a weaker target, get a binding judgement - unlikely to be appealed. Then use the elements of the judgement in their favour to go after slightly bigger targets, rinse and repeat.

DonkeyRhubarb
6th November 2015, 07:36
You need deep pockets to take on HMRC.

Or lots of little pockets. :wink

We've raised a fighting fund of £0.5M, from our members, to fight them.

Dylan
6th November 2015, 08:50
The lack of victory press release at this stage is quite interesting, really hope they've shot themselves in the foot, would be so poetic to see the bullying tactics blow up in their face.

DotasScandal
6th November 2015, 10:03
You need deep pockets to take on HMRC.
Or lots of little pockets. :wink
We've raised a fighting fund of £0.5M, from our members, to fight them.

That's the only tactic HMRC has. War of attrition based on their ability to stay solvent longer than any of us individually and the hope the individual will throw the towel as funds runs dry (easy to achieve when you are fighting your "enemy" with their own money!!!).
That's the very same cynical logic that is at the heart of the APN legislation.
To counter that I'm all for the "many little pockets" strategy :wink

BrilloPad
6th November 2015, 10:15
To counter that I'm all for the "many little pockets" strategy :wink

Getting contractors together is like herding cats! Which makes the achievement of DR, SC and the rest of the NTRT TAA committee really remarkable!

energyonlineadmin
6th November 2015, 10:54
I know it is hard for contractors to think collectively but we have to do so now in the light of these enquiries and the latest IR35 debacle that is due. I think there is no little doubt that we are looking at a national scandal here with more than a hint of corruption about it. The mad lefties who rave on about tax avoidance seem to have missed the point that this government has enacted retrospective legislation and having apparently got away with it have set a precedent. So what or who is next?? Maybe it will be them next time. The Big Group is a good option at this point and perhaps 3,000 letter all landing on the Prime Minister's desk on the same day might grab his attention. After all many people caught by this shambolic debacle entirely created by the incompetent crooks at HMRC are natural Tory voters aren't they? I would like to see a "group action" to "Instigate a formal complaint against HMRC’s conduct as well as an ombudsman enquiry." as mentioned on the NTRT website.

Not Losing Any Sleep
6th November 2015, 11:39
I know it is hard for contractors to think collectively but we have to do so now in the light of these enquiries and the latest IR35 debacle that is due. I think there is no little doubt that we are looking at a national scandal here with more than a hint of corruption about it. The mad lefties who rave on about tax avoidance seem to have missed the point that this government has enacted retrospective legislation and having apparently got away with it have set a precedent. So what or who is next?? Maybe it will be them next time. The Big Group is a good option at this point and perhaps 3,000 letter all landing on the Prime Minister's desk on the same day might grab his attention. After all many people caught by this shambolic debacle entirely created by the incompetent crooks at HMRC are natural Tory voters aren't they? I would like to see a "group action" to "Instigate a formal complaint against HMRC’s conduct as well as an ombudsman enquiry." as mentioned on the NTRT website.

A question for all the experts out there:

If Rangers didn't have "side letters", would the learned judges have reached a differrent conclusion?

PeterF
6th November 2015, 12:49
What's a 'side letter'? One of these??

http://www.livetradingnews.com/wp-content/uploads/2014/06/wheelbarrow-of-money-520x340.png

Or one of these?

http://www.zimbabweelection.com/wp-content/uploads/2014/02/Golden-Handshake-2647833.jpg

DonkeyRhubarb
6th November 2015, 14:00
The Big Group is a good option at this point and perhaps 3,000 letter all landing on the Prime Minister's desk on the same day might grab his attention. After all many people caught by this shambolic debacle entirely created by the incompetent crooks at HMRC are natural Tory voters aren't they? I would like to see a "group action" to "Instigate a formal complaint against HMRC’s conduct as well as an ombudsman enquiry." as mentioned on the NTRT website.

Learn from our experience. Don't waste your time, effort & money on any of that crap.

Get your wallets out and take the fight to HMRC in the courts.

holymoly23m
6th November 2015, 20:16
Sure. Because HMRC are so quick at going to court.
If anyone can tell me how you take HMRC to court, actually push them there Id like to see it. Instead they cherry pick cases, its preposterous. The average joe is unable to readily have his day in court.

BrilloPad
6th November 2015, 20:24
I know it is hard for contractors to think collectively but we have to do so now in the light of these enquiries and the latest IR35 debacle that is due. I think there is no little doubt that we are looking at a national scandal here with more than a hint of corruption about it. The mad lefties who rave on about tax avoidance seem to have missed the point that this government has enacted retrospective legislation and having apparently got away with it have set a precedent. So what or who is next?? Maybe it will be them next time. The Big Group is a good option at this point and perhaps 3,000 letter all landing on the Prime Minister's desk on the same day might grab his attention. After all many people caught by this shambolic debacle entirely created by the incompetent crooks at HMRC are natural Tory voters aren't they? I would like to see a "group action" to "Instigate a formal complaint against HMRC’s conduct as well as an ombudsman enquiry." as mentioned on the NTRT website.

Sorry but that is nonsense.

I told NTRT that approach would not work. No-one listened. It failed. Now NTRT are telling everyone not to go that route.

The only chance, as DR says, is cash to pay tax lawyers. So you need a large pocket or several small ones.

NTRT(TAA) raised a damn good pot. Will big group be able to do the same? If 3,000 put in £200 they would be up and going.

DonkeyRhubarb
6th November 2015, 20:37
Sure. Because HMRC are so quick at going to court.
If anyone can tell me how you take HMRC to court, actually push them there Id like to see it. Instead they cherry pick cases, its preposterous. The average joe is unable to readily have his day in court.

1) write to HMRC requesting Closure Notices (CNs) and tell them, if they do not issue them, you will go to the FTT and ask the tribunal to direct that CNs are issued

2) if HMRC issue CNs then appeal to HMRC and request postponement of payment
2a) then apply to the FTT to have the appeals of your CNs heard

3) if HMRC decline to issue CNs, apply to the FTT for a direction that CNs are issued

AtW
6th November 2015, 20:38
There is little left in the pot to cover their expenses, never mind a court case. HMRC have driven it to this stage, and only because they never won the case until now

HMRC would always appeal until the very top if necessary, they have unlimited resources for it.

DotasScandal
6th November 2015, 20:54
HMRC would always appeal until the very top if necessary, they have unlimited resources for it.

And these unlimited resources = our own money. Ain't it a beautiful system?

webberg
7th November 2015, 11:43
NTRT(TAA) raised a damn good pot. Will big group be able to do the same? If 3,000 put in £200 they would be up and going.

Good question.

There is a limit to what I'm willing to share here in terms of strategy but which I will explore and explain in the Big Group forum.

However, from conversations with BG members, there is an appetite for litigation and a willingness to pay modest sums to fund it.

Bear in mind that BG seeks to identify the common parts of the various structures and argue those rather than detail and as such members of scheme A will have a vested interest in fighting an attack on scheme B, most of the time.

Is litigation our primary aim? No. HMRC's resources are getting more stretched and we continue to believe that there is yet more mileage there. That journey has an important test next week.

Will we NEVER litigate? No. We will litigate where we have to although at the moment we see that as being selective.

3,000 at £200 each is a formidable number. Is it enough? Perhaps. Are we willing to expose our members to an open ended cheque? No.

The lessons from NTRT are valuable and the work done there to keep it on track and moving forward remarkable. If BG can emulate that for those impacted not by a single issue but by many diverse issues, we will have done well.

webberg
7th November 2015, 11:45
On EBTs and Rangers FC – Part 1 | Waiting for Godot (http://waitingfortax.com/2015/11/06/on-ebts-and-rangers-fc-part-1/#comments)

webberg
7th November 2015, 11:55
No appeal and this becomes very useful for hmrc, any similar schemes may be target of follower notices. Perhaps this was the aim of hmrc, as why keep going when they lost at ftt and then upper tribunal, they knew one decision in their favour would result in Murray group administrator having to fund an appeal, which is highly unlikely with no funds.

One possibility is that Murray Group, strapped as it is for cash, will not have the resources or appetite for an appeal to Supreme Court.

In that case, whilst the decision will hold sway for a period, it might still be trumped by a Supreme Court decision elsewhere.

It's also the case however that the decision is for PAYE regulations. NOT individual tax. As such it may be the case that the question coming from the Chancellor on Monday morning to HMRC is:

"Well done chaps. When can I expect to see the several million PAYE receipts?"

Response is perhaps:

"Ermm. the company has no money and we might get a few pence in the pound"

Chancellor: "Never mind, as long as we get back the legal costs and can now chase all those other employers who used something similar. When and how much?"

HMRC; "Ermm, may not cover the legal costs. We can go back only 4 years and most of these schemes ended in 2011. Most "employers" have disappeared."

Chancellor: "Not good. But we can still chase individuals for money? When and how much?"

HMRC; "Ermm, not with this decision probably. Need to wait for an individual one, say 5 years"

Chancellor: "Report to the Headmaster's Study and expect no mercy!!"

chubacabra
7th November 2015, 12:46
One possibility is that Murray Group, strapped as it is for cash, will not have the resources or appetite for an appeal to Supreme Court.

In that case, whilst the decision will hold sway for a period, it might still be trumped by a Supreme Court decision elsewhere.

It's also the case however that the decision is for PAYE regulations. NOT individual tax. As such it may be the case that the question coming from the Chancellor on Monday morning to HMRC is:

"Well done chaps. When can I expect to see the several million PAYE receipts?"

Response is perhaps:

"Ermm. the company has no money and we might get a few pence in the pound"

Chancellor: "Never mind, as long as we get back the legal costs and can now chase all those other employers who used something similar. When and how much?"

HMRC; "Ermm, may not cover the legal costs. We can go back only 4 years and most of these schemes ended in 2011. Most "employers" have disappeared."

Chancellor: "Not good. But we can still chase individuals for money? When and how much?"

HMRC; "Ermm, not with this decision probably. Need to wait for an individual one, say 5 years"

Chancellor: "Report to the Headmaster's Study and expect no mercy!!"

Oh it would make me chuckle if this is the case :D

DotasScandal
7th November 2015, 12:57
On EBTs and Rangers FC – Part 1 | Waiting for Godot (http://waitingfortax.com/2015/11/06/on-ebts-and-rangers-fc-part-1/#comments)

Part 2 was supposed to be out today...
Mr Maugham is being a tease :rolleyes:

webberg
8th November 2015, 11:00
Tease no longer

Waiting for Godot (http://waitingfortax.com/)

ASB
8th November 2015, 13:06
There is a lot of generally interesting stuff on his blog as well.

webberg
9th November 2015, 11:41
Yes there is.

I lifted (with his permission) a set of questions to ask yourself if offered ANYTHING that reduced tax and which in now enshrined elsewhere here.

The think to bear in mind however is that as he admits, he makes a living defending or prosecuting tax schemes and as such is not a disinterested party.

Personally I think he presents arguments in a balanced manner and declares his interest so as long as you make allowance for the motive, his words make a valuable contribution.

webberg
9th November 2015, 13:14
Accountancy Age is reporting that reaction amongst advisers is mixed.

They quote a lawyer from Pinsent Masons saying "we're doomed" and a salesman from Rebus as saying that all EBT/EFURB schemes are bust and will be terminated with APN and Follower Notices.

They quote Jolyon Maugham based on his blog articles.

Stripped of hyperbole I think the Pinsent Masons' reasoning is debatable, Rebus' missing and Maugham's perhaps too "form over substance".

I was alarmed that Linkedin was apparently quoting an umbrella company operator as saying all contractor EBT schemes were doomed but actually it was linking to the Pinsent opinion piece.

It was curious that the 6 page spread in the Sunday Times on footballers being pursued for £100m created more column inches than the Murray case. Or was it?

Not Losing Any Sleep
9th November 2015, 14:02
Accountancy Age is reporting that reaction amongst advisers is mixed.

They quote a lawyer from Pinsent Masons saying "we're doomed" and a salesman from Rebus as saying that all EBT/EFURB schemes are bust and will be terminated with APN and Follower Notices.

They quote Jolyon Maugham based on his blog articles.

Stripped of hyperbole I think the Pinsent Masons' reasoning is debatable, Rebus' missing and Maugham's perhaps too "form over substance".

I was alarmed that Linkedin was apparently quoting an umbrella company operator as saying all contractor EBT schemes were doomed but actually it was linking to the Pinsent opinion piece.

It was curious that the 6 page spread in the Sunday Times on footballers being pursued for £100m created more column inches than the Murray case. Or was it?



A possible reason why the footballers and their film schemes was on the front page is that the likes of Ferdinand were a main part of the story.

HMRC might jump and down more if the Rangers case doesn't get, or doesn't request, leave to appeal.

Iliketax
9th November 2015, 15:47
Accountancy Age is reporting that reaction amongst advisers is mixed.

There's one I received today (which I can't share) that is headed " HMRC SUFFERS MAJOR DEFEAT IN RANGERS CASE "

DotasScandal
9th November 2015, 15:56
There's one I received today (which I can't share) that is headed " HMRC SUFFERS MAJOR DEFEAT IN RANGERS CASE "

Do tell?

WalterWhite
9th November 2015, 16:06
There's one I received today (which I can't share) that is headed " HMRC SUFFERS MAJOR DEFEAT IN RANGERS CASE "

BW?

webberg
9th November 2015, 16:59
BW?

If it's the one I've seen, I'd agree.

Nice piece of initials alliteration as well?

Iliketax
9th November 2015, 17:12
BW?

Yes

WalterWhite
9th November 2015, 17:21
If it's the one I've seen, I'd agree.

Nice piece of initials alliteration as well?

This is where i took the following from:

- contributions are tax deductible for the company
- loans to the employee are not taxable as income
- loans to the employee are deductible against IHT
- this is not deemed tax avoidance

your thoughts Graham?

webberg
9th November 2015, 19:13
This is where i took the following from:

- contributions are tax deductible for the company
- loans to the employee are not taxable as income
- loans to the employee are deductible against IHT
- this is not deemed tax avoidance

your thoughts Graham?

CUK has asked me for an article. rather than steal thunder if you wait a few days you'll see my thoughts.

Not Losing Any Sleep
9th November 2015, 20:48
CUK has asked me for an article. rather than steal thunder if you wait a few days you'll see my thoughts.

I'm looking forward to the Webberg article. One of the interesting issues is if the judgement contradicts in any way the 2011 leglisaltion.

Iliketax
9th November 2015, 21:35
I am not Graham but:


- contributions are tax deductible for the company

The judgement does not need say what the position is with regard to the corporate tax deduction. The case is not about that so the Court of Session does not address the point. From my perspective, if the amounts paid to the EBT are shown as an expense in the employer's accounts and taxed as earnings of the employee on the way in to the EBT (on the basis decided by the Court of Session) then they will be deductible. If they are not taxed on the way in then there is no deduction until (normally) the employee pays income tax.


- loans to the employee are not taxable as income

Again, on the basis of the decided in appeal and the legislation in place when the loans were made, that is correct. If the money was not taxed on the way into the EBT (e.g. because of different facts), then the judgement does not deal with that.

But since FA2011 I think that is wrong. There are transitional rules in para 59 Sch 2 FA 2011 that provide relief where the earnings arise on the way in to the EBT pre-2011 and the loan is made after 6 April 2011. Post 2011, I think that s554Z6 won't give relief from double tax on the loans unless you squint really hard.


- loans to the employee are deductible against IHT

The case is not about IHT and it's not mentioned in the judgement, other than to say this was one of the perceived advantages. In my view it's likely it would be if it really did reduce the value of the estate (i.e. if the estate really had to pay it back). But that would be a question of what the terms of the loan really were and that would be for another FTT to decide.

I would be interested in whether HMRC will take the point that the redirection of the money to the EBT by the employee was a chargeable lifetime transfer. The risk of HMRC taking this view may well be a material point that would encourage some people to settle.


- this is not deemed tax avoidance

You are having a laugh.

It's clear from the first witnesses at the FTT (e.g. Mr Yellow) and beyond that everyone thought that it was all about tax avoidance. Have a look at the second sentence in the Court of Session judgement.


One of the interesting issues is if the judgement contradicts in any way the 2011 leglisaltion

Not in the slightest.

bitfrustrated
9th November 2015, 22:30
ps. it would be a bit of poetic justice if HMRC had to chase the employers (promoters).

For too many years, the promoters have got away scott free raking in £millions. It's about time they shared a bit of the pain.

And, if HMRC can't collect off them, well that's their problem.

Is there an appetite for contractors to go after the promoters, before HMRC gets their hands on them? Seems like they are the main beneficiaries of their risky schemes, firstly pocketing structure/admin fees, now living off the litigation process. If they returned structure/admin/litigation costs back to the scheme participants, it would go some way to pay off those APNs.

DotasScandal
10th November 2015, 00:18
If they returned structure/admin/litigation costs back to the scheme participants, it would go some way to pay off those APNs.

Oh, look! a flying pig! :rolleyes:

bitfrustrated
10th November 2015, 10:14
Oh, look! a flying pig! :rolleyes:

Accessible, grounded pigs, with still operational offices manned by the same 'tax advisers'. What's the alternative - let them get away with it?

webberg
10th November 2015, 10:53
Accessible, grounded pigs, with still operational offices manned by the same 'tax advisers'. What's the alternative - let them get away with it?

I think my friend, Mr Scandal, is correct and chasing promoters will result in your forum name changing to "evenmorefrustrated".

The promoter firms are mostly long gone. The people who populated them may well be sat at desks in the same office, selling similar products and profits going to the same shareholders. However, legally it's probably a different company and one that has no connection with the outfit who sold you the scheme.

You would therefore have to show that an individual was responsible for selling you a scheme that may not work. (Don't forget that as yet, it has not been proven that there is a tax liability and it may be some years before that happens). Pinning responsibility on the individual is DIFFICULT. Tracing that individual through to another firm and claiming against the new legal entity even MORE DIFFICULT.

The promoter firms were not regulated and not required to contribute to a statutory fund to compensate victims. This is a failing on part of the Isle of Man and UK Governments. I've seen a paper that discusses the chance of that failure in itself leading to a compensation claim from the Government. The paper concludes that the chance is VERY LOW.

So presently, you have no proven loss; the promoter firm no longer trading; almost impossible to prove the liability of an individual; no regulation authority to move against; some very hard legal yards (each very expensive); time passing.

Frustrating as it is, I think you have to allow the firms to "get away with it" but hope that HMRC turn their PAYE guns on the individuals.

bitfrustrated
10th November 2015, 12:12
I think my friend, Mr Scandal, is correct and chasing promoters will result in your forum name changing to "evenmorefrustrated".

The promoter firms are mostly long gone. The people who populated them may well be sat at desks in the same office, selling similar products and profits going to the same shareholders. However, legally it's probably a different company and one that has no connection with the outfit who sold you the scheme.

You would therefore have to show that an individual was responsible for selling you a scheme that may not work. (Don't forget that as yet, it has not been proven that there is a tax liability and it may be some years before that happens). Pinning responsibility on the individual is DIFFICULT. Tracing that individual through to another firm and claiming against the new legal entity even MORE DIFFICULT.

The promoter firms were not regulated and not required to contribute to a statutory fund to compensate victims. This is a failing on part of the Isle of Man and UK Governments. I've seen a paper that discusses the chance of that failure in itself leading to a compensation claim from the Government. The paper concludes that the chance is VERY LOW.

So presently, you have no proven loss; the promoter firm no longer trading; almost impossible to prove the liability of an individual; no regulation authority to move against; some very hard legal yards (each very expensive); time passing.

Frustrating as it is, I think you have to allow the firms to "get away with it" but hope that HMRC turn their PAYE guns on the individuals.

In my case there's 2 types of entities: the trusts (aka employers) and the promoter of tax schemes. The trusts ceased to exist but the promoter has been active in the same capacity since I've joined them. In theory the promoter is just the middle man, in practice he's the only interface I've had with the trusts. Based on the promoter's advice, I already suffer a financial hardship, echo of which will linger on irrespective of the potential APN refunds. Surely the (still operational) promoters bear responsibility for such 'expert' advice?

webberg
10th November 2015, 14:10
In my case there's 2 types of entities: the trusts (aka employers) and the promoter of tax schemes. The trusts ceased to exist but the promoter has been active in the same capacity since I've joined them. In theory the promoter is just the middle man, in practice he's the only interface I've had with the trusts. Based on the promoter's advice, I already suffer a financial hardship, echo of which will linger on irrespective of the potential APN refunds. Surely the (still operational) promoters bear responsibility for such 'expert' advice?

Afraid I'd disagree.

The trusts are NOT the employer. You have no employment agreement with them. The agent (probably part of the promoter group) was the employer.

The trusts still exist. They received a contribution, made a loan and are now required to look after the beneficiary. That in itself is potentially a problem for another day.

The promoter, said to you. "Do this and that and your tax bill becomes this". They may have said "We have an opinion from somebody we've paid and who works for us, that this is "compliant" with all tax law"

Your tax affairs are YOUR responsibility. Could/should you have tested the above statements with a professional, i.e. somebody trained in accountancy and tax and who has to meet the standards of the bodies he/she belongs to? HMRC would certainly say that a "reasonable man" would almost certainly have done so.

Can you rely upon an opinion given to a third party? Difficult territory but in this case a QC is a very difficult person to sue as they give an opinion, not a statement of fact.

Unless you ran this past another professional adviser (and most promoters as firms/individuals are not professionals) I'm afraid that you need to do yourself a favour and bury thoughts of retribution unless you have endless patience and deep pockets.

DotasScandal
10th November 2015, 15:10
Could/should you have tested the above statements with a professional, i.e. somebody trained in accountancy and tax and who has to meet the standards of the bodies he/she belongs to? HMRC would certainly say that a "reasonable man" would almost certainly have done so.

HMRC would say that, conveniently ignoring that the DOTAS registration of a structure was commonly perceived by the end clients, like it or not, as an HMRC seal of approval*!
It was even presented that way by some promoters.
The impression was reinforced by HMRC's complete absence of follow-ups to enquiry letters, in line with the promoters' narrative that "those are just routine checks".

*: there is anecdotal evidence of people phoning HMRC to inquire whether the structure they contemplated joining was kosher, and being informed by a friendly HMRC officer that "if it is DOTAS-registered, it's ok to use".

LandRover
10th November 2015, 17:49
"Unless you ran this past another professional adviser"

Like a Chartered Accountant?

The same person who advised me to go onto the scheme as IR35 was such a threat to me.

Accountant sitting behind his desk informing you that he feels IR35 is becoming a concern and he is protecting his clients, kind of makes you feel he is watching your back!

Go back a few years and the climate was so different.

cliffordthedog
10th November 2015, 18:08
My accountant (chartered) advised just the same.

Has been family accountant for 25 years.

You employ the professionals to get the advice. I believe that he was providing good honest guidance.

HMRC did not provide any guidance despite the obvious use of these schemes going back many years.

It is still difficult to comprehend such lax ways of operation by HMRC that allowed this problem to build up as it has.

webberg
11th November 2015, 10:19
As indicated, I have penned a piece for this website on my view on the Rangers case.

This is available now.

As with all these articles, they compress and inevitably shorten the arguments and as such some of the nuances are not really brought out.

The decision is public property. My article is public property now as well.

I'm happy to debate my opinion and views here, via PM or email.

This decision is a milestone. Please take time to read it and understand it. If you are struggling to understand it please persevere as it will help you.

If you have questions that you consider are too simple or risk you appearing a fool, I would encourage you to ask them because often the simplest questions bring the greatest value.

It is my opinion that understanding the nuances and implications of this decision will be a crucial factor in weighing future decisions.

Not Losing Any Sleep
11th November 2015, 10:28
As indicated, I have penned a piece for this website on my view on the Rangers case.

This is available now.

As with all these articles, they compress and inevitably shorten the arguments and as such some of the nuances are not really brought out.

The decision is public property. My article is public property now as well.

I'm happy to debate my opinion and views here, via PM or email.

This decision is a milestone. Please take time to read it and understand it. If you are struggling to understand it please persevere as it will help you.

If you have questions that you consider are too simple or risk you appearing a fool, I would encourage you to ask them because often the simplest questions bring the greatest value.

It is my opinion that understanding the nuances and implications of this decision will be a crucial factor in weighing future decisions.

Can you provide a link please. I didn't see it.

bitfrustrated
11th November 2015, 10:29
Afraid I'd disagree.

The trusts are NOT the employer. You have no employment agreement with them. The agent (probably part of the promoter group) was the employer.


Not according to my tax returns.


The trusts still exist. They received a contribution, made a loan and are now required to look after the beneficiary. That in itself is potentially a problem for another day.


My mistake, the trust is dormant.


The promoter, said to you. "Do this and that and your tax bill becomes this". They may have said "We have an opinion from somebody we've paid and who works for us, that this is "compliant" with all tax law"

Your tax affairs are YOUR responsibility. Could/should you have tested the above statements with a professional, i.e. somebody trained in accountancy and tax and who has to meet the standards of the bodies he/she belongs to? HMRC would certainly say that a "reasonable man" would almost certainly have done so.

Can you rely upon an opinion given to a third party? Difficult territory but in this case a QC is a very difficult person to sue as they give an opinion, not a statement of fact.

Unless you ran this past another professional adviser (and most promoters as firms/individuals are not professionals) I'm afraid that you need to do yourself a favour and bury thoughts of retribution unless you have endless patience and deep pockets.

The promoter presented himself as an expert in the area. In this day and age, myself and obviously others, follow the advice of the experts, be it doctors, mechanics, builders, umbrella companies. If I pay these professionals for a job that backfires, it's reasonable to expect a compensation.

I'm not absolving myself of the responsibility, I sleep walked into this mess. But it's not excusable for the promoter to charge hefty fees for their risky schemes, and dispensing the enquiry letter as a "standard procedure". Akin to a dodgy mechanic installing worn out break pads for a fee, then claiming there's no problems with the screeching noise.

And I never suggested suing promoters would be easy, just possible, and hopefully financially rewarding :ohwell

DotasScandal
11th November 2015, 10:40
Can you provide a link please. I didn't see it.

What the latest Rangers ruling means for EBT contractors :: Contractor UK (http://www.contractoruk.com/news/0012294why_its_not_end_every_ebt_ever_used.html)

webberg
11th November 2015, 11:03
Not according to my tax returns.

The promoter presented himself as an expert in the area. In this day and age, myself and obviously others, follow the advice of the experts, be it doctors, mechanics, builders, umbrella companies. If I pay these professionals for a job that backfires, it's reasonable to expect a compensation.

I'm not absolving myself of the responsibility, I sleep walked into this mess. But it's not excusable for the promoter to charge hefty fees for their risky schemes, and dispensing the enquiry letter as a "standard procedure". Akin to a dodgy mechanic installing worn out break pads for a fee, then claiming there's no problems with the screeching noise.

And I never suggested suing promoters would be easy, just possible, and hopefully financially rewarding :ohwell

I'd be interested in seeing who your employer is in that case.

The promoters don't belong to any professional organisation which has a compensation fund in place, so far as I can.

We looked at this with lawyers about a year ago and concluded that the risk/reward was not worth it.

StrengthInNumbers
11th November 2015, 17:16
First to Fourth Respondents – non-participating parties

So Murray group did not even responded - no QC and HMRC got easy way to impress the judges. What a **** up by 1st 4 respondents.

bitfrustrated
11th November 2015, 19:15
I'd be interested in seeing who your employer is in that case.

The promoters don't belong to any professional organisation which has a compensation fund in place, so far as I can.

We looked at this with lawyers about a year ago and concluded that the risk/reward was not worth it.

I'm not surprised, if I was a promoter I'd also make sure I'm hard to sue. Though all it takes is 1 precedent, and dominos might fall.

Thanks for your input though!

centurian
11th November 2015, 19:40
I'm not surprised, if I was a promoter I'd also make sure I'm hard to sue. Though all it takes is 1 precedent, and dominos might fall.

Pretty much nails it on the head. People engage these guys to be incredibly creative at finding ways to avoid having to hand over money to HMRC, using every conceivable legal means possible

But their first priority is covering themselves - and they will use any and every trick available to make sure they keep hold of the cash they have. To expect them to have done otherwise, given the nature of what they do - is extreme naivety bordering on total stupidity.

webberg
11th November 2015, 20:47
First to Fourth Respondents – non-participating parties

So Murray group did not even responded - no QC and HMRC got easy way to impress the judges. What a **** up by 1st 4 respondents.

The first 4 respondents had no money to fund the appeal.

bitfrustrated
11th November 2015, 21:19
Pretty much nails it on the head. People engage these guys to be incredibly creative at finding ways to avoid having to hand over money to HMRC, using every conceivable legal means possible

But their first priority is covering themselves - and they will use any and every trick available to make sure they keep hold of the cash they have. To expect them to have done otherwise, given the nature of what they do - is extreme naivety bordering on total stupidity.

Creative indeed, not just in terms of HMRC, but also scheme participants. As soon as their schemes stop attracting fresh punters, they switch the business model to a paid for "scheme defence". Should keep the lights on for the next 5 years or so. Scary part, they do suck in a fair share of scheme participants, as in theory, who'd mount a better defence than scheme inventors?

How's that for a long term business plan!?

StrengthInNumbers
11th November 2015, 23:34
The first 4 respondents had no money to fund the appeal.

Where will/can the money come now for appeal?

DotasScandal
12th November 2015, 08:54
Where will/can the money come now for appeal?

Time for a kickstarter campaign :wink... I'm sure many an outraged Rangers fan would contribute.

webberg
12th November 2015, 09:38
There are some circumstances where a Court will hear an appeal without funding if there is sufficient public interest. In tax cases, that tends to be where HMRC want to prove a particular point and there is an issue of public policy at stake.

Whilst I do not believe for one second the rather extreme claims from some commentators that Murray was a "major victory for taxpayers", I'm not convinced that HMRC sees much public policy value in having the position tested further.

webberg
12th November 2015, 10:05
There is a note doing the rounds that says HMRC suffered a "major defeat" in Murray Group.

Everyone is entitled to an opinion.

It's worth though checking the telephone number of the outfit who allegedly wrote/issued it.

parallelmonogamist
12th November 2015, 12:46
I'm told Murray Group have £26m in a creditor pot and £0.5m in a fighting fund. BDO might put in too?

I don't know the technicalities of what pots they could use etc, but it seems more likely than I thought that they'll appeal.

Not Losing Any Sleep
12th November 2015, 14:27
I'm told Murray Group have £26m in a creditor pot and £0.5m in a fighting fund. BDO might put in too?

I don't know the technicalities of what pots they could use etc, but it seems more likely than I thought that they'll appeal.


HMRC might start shouting a bit more if there is no appeal.

regron
12th November 2015, 22:01
First indication of a possible appeal (Third Paragraph).

Dave King Statement - Rangers Football Club, Official Website (http://rangers.co.uk/news/headlines/dave-king-statement-5/#.VkT0ev5V1Cc.twitter)

parallelmonogamist
13th November 2015, 10:08
Nice one, thanks for that regron.

Off topic slightly, I do find this statement odd:

"Certain players may not have signed for the Club without the perceived benefit of personal tax savings but there was no general advantage for the player squad, or the performance on the pitch."

Especially after saying "the football team had no advantage from any tax savings from the scheme put in place by the Murray Group".

Certain players signing for the club because of (insert reason here) seems like said reason gives them an advantage. ;-)

swhitehe
15th November 2015, 22:10
How significant is the implication that the tax liability lies with the employer, not the employee?

webberg
16th November 2015, 09:47
How significant is the implication that the tax liability lies with the employer, not the employee?

It was common ground in the FTT that the recipients were employees and as such a PAYE determination was the appropriate way to proceed.

This approach weakens the ability of HMRC to apply the decision elsewhere although perhaps not fatally.

minestrone
16th November 2015, 10:17
What the latest Rangers ruling means for EBT contractors :: Contractor UK (http://www.contractoruk.com/news/0012294why_its_not_end_every_ebt_ever_used.html)

"As a result the company that owned Rangers"

:laugh

minestrone
16th November 2015, 10:23
First indication of a possible appeal (Third Paragraph).

Dave King Statement - Rangers Football Club, Official Website (http://rangers.co.uk/news/headlines/dave-king-statement-5/#.VkT0ev5V1Cc.twitter)

I wouldn't believe anything that comes out of his mouth, he was referred to as a 'glib and shameless liar' by a judge in a previous tax trial.

Anyways, there is absolutely no chance they are going to appeal this, Murray's companies are gone and BDO wont bother.

cliffordthedog
16th November 2015, 10:45
[QUOTE=minestrone;2168286]I wouldn't believe anything that comes out of his mouth, he was referred to as a 'glib and shameless liar' by a judge in a previous tax trial.

Anyways, there is absolutely no chance they are going to appeal this, Murray's companies are gone and BDO wont bother.


Minestrone
On what basis do you make this other than your own prejudices?
They've won 2 out of 3.
The last decision seems to have confused the socks off everyone.

minestrone
16th November 2015, 11:10
It never confused me, the players had 'side letters' explaining that these loans were part of their remuneration. Once the appeals got above the funny handshake strata of Scottish society they were always going to lose it.

Anyways there are multiple court cases going on just now about the sale of Rangers, it is somehow possible that BDO might actually get the 'club' back.

cliffordthedog
16th November 2015, 11:56
It never confused me, the players had 'side letters' explaining that these loans were part of their remuneration. Once the appeals got above the funny handshake strata of Scottish society they were always going to lose it.

Anyways there are multiple court cases going on just now about the sale of Rangers, it is somehow possible that BDO might actually get the 'club' back.

The best legal minds we have, didn't agree :ladybags:
The tax specialists/accountants who have commented are confused

But you were never confused. I'm impressed :wink

minestrone
16th November 2015, 15:37
The players had letters telling them that they never had to pay the money back and that the money was part of their salary. That really is the bottom line in this case, they didn't know how to run an EBT.

The tribunal verdict was an error and this has corrected it.

The only involvement Rangers have now is that there is a real possibility that they may lose the titles won during that era so they are making noises about an appeal, there won't be one. Here is an excerpt from the guardian that shows the duplicity of Dave King.



Rangers: shutting down talk that the club should be stripped of five titles after a court ruled the oldco broke tax rules from 2001 to 2010: “It is time for everyone to move on and work together for the greater good of the game. Scottish football has suffered enough.”

• Leading the debate for both sides: Rangers chairman Dave King – speaking last week: “The football team had no advantage from any tax savings”; and speaking in 2012, then as a former club director. “We owe the Scottish footballing public an apology. I follow the logic of the argument that if we lose the tax case then we probably gained some competitive advantage. We should apologise for that.”

The reality is that there might not be a Rangers by this time next year, they are very close to going into administration again.

cliffordthedog
16th November 2015, 15:58
minestrone

I think that the arguments must be a little more complex than that otherwise we would not have had such a complex case. It can't have been that clear if the FTT and UTT ruled against HMRC followed by Sessions has ruling in HMRC's favour.

But I wouldn't want to bet on a result either way if this is appealed

minestrone
16th November 2015, 16:23
minestrone

I think that the arguments must be a little more complex than that otherwise we would not have had such a complex case. It can't have been that clear if the FTT and UTT ruled against HMRC followed by Sessions has ruling in HMRC's favour.

But I wouldn't want to bet on a result either way if this is appealed

I am not sure it even can be appealed, they have to do it in 28 days and it can only be done if there is proof that someone perverted the course of justice. So I'm pretty sure the show is over now.

And yes, it really was that simple, they gave most people letters saying they never had to pay the loans back. They fecked up royally.

I don't know what is going to happen to the 'club', there is a court case coming up and the sale of the assets/club might have been criminal.

fullyautomatix
16th November 2015, 16:56
I am not sure it even can be appealed, they have to do it in 28 days and it can only be done if there is proof that someone perverted the course of justice. So I'm pretty sure the show is over now.

And yes, it really was that simple, they gave most people letters saying they never had to pay the loans back. They fecked up royally.

I don't know what is going to happen to the 'club', there is a court case coming up and the sale of the assets/club might have been criminal.

I think some of the users who have used dodgy schemes keep clinging to some vain hope that all the scheme providers will keep appealing and eventually win in some court.

DotasScandal
16th November 2015, 17:56
I am not sure it even can be appealed, they have to do it in 28 days and it can only be done if there is proof that someone perverted the course of justice.

It can be appealed, and no, there is no need for anyone having perverted the course of justice. No idea where you are getting this stuff from.

LandRover
16th November 2015, 17:59
I think some of the users who have used dodgy schemes keep clinging to some vain hope that all the scheme providers will keep appealing and eventually win in some court.

Oh if only you were around to help us idiots!

Some of us didn't have your wise words of wisdom to fall back on at the time.

While your here any advice on anything else?

jbryce
16th November 2015, 18:57
I think some of the users who have used dodgy schemes keep clinging to some vain hope that all the scheme providers will keep appealing and eventually win in some court.

Errr. This case makes pretty much no difference to most Contractor EBTs as far as HMRC are concerned - it's confused most specialists and, to be brutal, isn't going to stop APNs even if they do appeal and win. Each scheme will, eventually, be judged on its merit, or otherwise.

minestrone
16th November 2015, 20:45
It can be appealed, and no, there is no need for anyone having perverted the course of justice. No idea where you are getting this stuff from.

This is now being openly stated on sites by followers of the case who are usually accurate. This link is one of many to report that there is no right to appeal

https://johnjamessite.wordpress.com/2015/11/15/illegal-tax-avoidance/

I seriously doubt DBO would appeal anyway. All the companies are gone now, the creditors probably don't expect to see any of the money, everyone will just want it done and dusted.

webberg
17th November 2015, 11:57
This is now being openly stated on sites by followers of the case who are usually accurate. This link is one of many to report that there is no right to appeal

https://johnjamessite.wordpress.com/2015/11/15/illegal-tax-avoidance/

I seriously doubt DBO would appeal anyway. All the companies are gone now, the creditors probably don't expect to see any of the money, everyone will just want it done and dusted.

I would, with respect, disagree with the blogger in the above link.

An application for appeal is usually made to the Court who made the decision. They can decide whether to permit an appeal or not.

If they do, then the case advances.

If they do not, the taxpayer (in this instance) can petition the Supreme Court directly.

The Supreme Court judges will then decide if they want to hear the appeal.

If they do, a date is set.

If they choose not to, that is usually the end of the road subject to possible JR of that decision or perhaps EU intervention.

minestrone
17th November 2015, 14:11
To be honest I don't know, IANAL and this is the Scottish legal system, the person involved in that blog pertains to be a rangers fan and has usually been very accurate with inside information coming from boardroom level.

I could actually ask someone who would certainly know, but I'll wait till the 28 days are up before asking their views.

I will say again and for the last time that they lost this because they had contracts of employment under which the EBT monies were to be paid. The infamous 'side letters'.

jbryce
17th November 2015, 15:10
To be honest I don't know, IANAL and this is the Scottish legal system, the person involved in that blog pertains to be a rangers fan and has usually been very accurate with inside information coming from boardroom level.

I could actually ask someone who would certainly know, but I'll wait till the 28 days are up before asking their views.

I will say again and for the last time that they lost this because they had contracts of employment under which the EBT monies were to be paid. The infamous 'side letters'.

Being a Rangers fan does not necessarily confer knowledge of the Legal system. If you read the rest of his blog you will note that his insights could be picked up from the media pretty easily. For the avoidance of doubt I am not a Celtic fan.

From a contractor EBT perspective, if you're hoping that has dealt a death blow to the arrangements that I, and others, stupidly joined then I'm afraid you'll be very dissapointed. That day may come, but it's not today.

minestrone
17th November 2015, 19:48
Being a Rangers fan does not necessarily confer knowledge of the Legal system. If you read the rest of his blog you will note that his insights could be picked up from the media pretty easily. For the avoidance of doubt I am not a Celtic fan.


From a contractor EBT perspective, if you're hoping that has dealt a death blow to the arrangements that I, and others, stupidly joined then I'm afraid you'll be very dissapointed. That day may come, but it's not today.

I seriously and honestly could not give two flying fooks about your anyone's EBT system.

Rangers got liquidated by not paying their VAT.

minestrone
17th November 2015, 19:52
I realise that this is a bit of a problem here for a lot of you but a word of advice is that you cant make the issue go away by screaming and shouting at anyone that comes near you with reasonable information on a specific case that you simply will not try to understand.

jbryce
17th November 2015, 21:01
I realise that this is a bit of a problem here for a lot of you but a word of advice is that you cant make the issue go away by screaming and shouting at anyone that comes near you with reasonable information on a specific case that you simply will not try to understand.

We (the lot of us you refer to), do take proper grown up advice, but not from a Rangers radge (Scottish vernacular). I don't think we're shouting or screaming particularly - we're just getting on with dealing with it.

I just don't agree with your learned analysis, I'm sorry if that has upset you. There's a pretty good analysis here, (http://www.contractoruk.com/news/0012294why_its_not_end_every_ebt_ever_used.html) it's obvious slightly different to your view, but that's life - we can't agree on everything.

webberg
18th November 2015, 09:45
I realise that this is a bit of a problem here for a lot of you but a word of advice is that you cant make the issue go away by screaming and shouting at anyone that comes near you with reasonable information on a specific case that you simply will not try to understand.

"Reasonable information" is always welcome and is better if validated by reference to named statute or administrative process.

Information from an anonymous source is necessarily of lesser value and the line between speculation and genuine insight is impossible to draw.

In particular I was perplexed by your statement that there needed to be some form of "perverting the course of justice" if an appeal was to be made. I'm not a lawyer but I suggest that such action is a criminal act.

Taxation is a civil matter unless it strays into fraud and evasion.

I've never seen or heard of a tax appeal being refused or accepted because of alleged criminal action as the tax process has its own rules and do not include or require anything other than due process.

minestrone
18th November 2015, 10:47
We (the lot of us you refer to), do take proper grown up advice, but not from a Rangers radge (Scottish vernacular). I don't think we're shouting or screaming particularly - we're just getting on with dealing with it.

I just don't agree with your learned analysis, I'm sorry if that has upset you. There's a pretty good analysis here, (http://www.contractoruk.com/news/0012294why_its_not_end_every_ebt_ever_used.html) it's obvious slightly different to your view, but that's life - we can't agree on everything.

I quoted the article on the previous page in case you haven't read anything I have been writing. It completely misses the fundamental core issue that the players had 2 contracts of employment, one for PAYE and one for the EBT.

You are all barking at the moon if you cant see why the EBT was taxable PAYE when there was an agreed contract of employment to go along with it.

Iliketax
18th November 2015, 11:32
I quoted the article on the previous page in case you haven't read anything I have been writing.

I did skim through the article and do have a few questions that you may be able to help me with. Just to keep it brief, can I ask about one sentence in the first paragraph?


What they fail to realize is that unless they can prove that the evidence presented to The Court of Session perverted the course of justice i.e. those called to give evidence lied and later recanted their lies in the forthcoming three weeks, there are no grounds for appeal.

1. What evidence was presented to the Court of Session when they heard the appeal?
2. Who was called to present that evidence to the Court of Session? Please do not mention the legal teams as they don't present evidence.
3. Who gave evidence to the Court of Session that "perverted the course of justice"?
4. What grounds are there for appeal from the Court of Session to the Supreme Court (other than "perverted the course of justice" in the quote)?
5. Can you show me where "perverted the course of justice" is a ground for appeal to the Supreme Court?
6. What is the time limit for applying to the Court of Session to appeal to the Supreme Court?
7. What is the time limit for applying to the Supreme Court to hear the appeal if the Court of Session does not grant permission?
8. How do those time limits tie in with three weeks in the sentence?

And in respect of some of the other posts you made:

9. Where in the Court of Session judgement does it specifically say that the side-letters were a factor in their judgement (other than in relation to background facts)?
10. How much did BDO disclose to the creditors that their legal fees were for the appeal to the Court of Session?
11. Bearing in mind the answer to the previous question, why do you think that BDO has any influence in the decision whether to appeal to the Supreme Court?

minestrone
18th November 2015, 13:42
I did skim through the article and do have a few questions that you may be able to help me with. Just to keep it brief, can I ask about one sentence in the first paragraph?



1. What evidence was presented to the Court of Session when they heard the appeal?
2. Who was called to present that evidence to the Court of Session? Please do not mention the legal teams as they don't present evidence.
3. Who gave evidence to the Court of Session that "perverted the course of justice"?
4. What grounds are there for appeal from the Court of Session to the Supreme Court (other than "perverted the course of justice" in the quote)?
5. Can you show me where "perverted the course of justice" is a ground for appeal to the Supreme Court?
6. What is the time limit for applying to the Court of Session to appeal to the Supreme Court?
7. What is the time limit for applying to the Supreme Court to hear the appeal if the Court of Session does not grant permission?
8. How do those time limits tie in with three weeks in the sentence?

And in respect of some of the other posts you made:

9. Where in the Court of Session judgement does it specifically say that the side-letters were a factor in their judgement (other than in relation to background facts)?
10. How much did BDO disclose to the creditors that their legal fees were for the appeal to the Court of Session?
11. Bearing in mind the answer to the previous question, why do you think that BDO has any influence in the decision whether to appeal to the Supreme Court?


I cant be arsed going through them all, as you know the evidence was already gathered.

On number 9 specifically...



Finally, we are of opinion that the relevant payment of emoluments or earnings is that made by the employer to the trustee of the Principal Trust. The critical feature of emoluments or earnings is that they represent consideration for services provided under a contract of employment, and such consideration is ultimately provided by the employer. Thus the critical point when it can be said that an emolument or earnings have been paid is when the employer makes a payment either directly to the employee or in a manner that has been requested or at least acquiesced in by the employee. In the present case the payment to the trustee of the Principal Trust occurred the point when funds left the employer, and they were made to an entity that had been selected by the employee (through the arrangements in the side letters), or at least acquiesced in by the employee, as the manner in which the funds would be channelled to his own sub-trust.

I think that essentially says that the remuneration was already decided upon and the arrangements were in the side letters.

Iliketax
18th November 2015, 15:15
I cant be arsed.

Me too.

minestrone
18th November 2015, 20:04
On the right to no appeal, I can't offer an opinion on that, I posted a blog from a very reliable blogger. Nothing more.

On the legalities of the EBT system I again offer no opinion, I never have, nor wish to interfere or decide what happens in the many poster's affairs on this thread that are involved in this discussion.

In the case of the liquidated Rangers football club, my position is quite clear, they paid money through trusts and the sums were directly under a contract of employment and that was their undoing. These 'side letter' contracts were known and documented in the Scottish legal system and have been correctly decided to be a contract of employment. They lied to the football association and are not in serious risk of losing all the titles the now defunct club won.

The CUK article that was posted and used as evidence in the last few pages fails to mention the crucial 'side letters' so I therefore conclude that it is utterly meaningless in respect to the participants of EBT schemes. I would also conclude that the article was bait to people in your position, it stated a company and told you what you wanted to hear, it could possibly be thought of as advertising if you are of a cynical nature.

Again I say that the liquidators might again get the club back, maybe improbably but not impossibly. Everyone has ben well warned not to discuss the actions online but this gives some indication as to what is going on

https://rangersfraudcase.wordpress.com/

webberg
18th November 2015, 20:38
On the right to no appeal, I can't offer an opinion on that, I posted a blog from a very reliable blogger. Nothing more.

The CUK article that was posted and used as evidence in the last few pages fails to mention the crucial 'side letters' so I therefore conclude that it is utterly meaningless in respect to the participants of EBT schemes. I would also conclude that the article was bait to people in your position, it stated a company and told you what you wanted to hear, it could possibly be thought of as advertising if you are of a cynical nature.

https://rangersfraudcase.wordpress.com/

As I said reliable and verifiable information is always useful. Rumour and speculation is not.

I'm assuming you refer to my article in CUK?

That article took as its base case the fact that in the Murray Group decision it was an agreed fact that the managers/players were employees. This was accepted by all sides at the FTT hearing. Consequently the importance of the side letters was whether they formed part of an existing contract of employment. The Judges decided they did.

For the managers/employees in the case the side letter was NOT a contract of employment, but rather formed part of an existing contract enshrined elsewhere. I have no comment on whether the side letters were legal/illegal under the rules of the Scottish FA. I'm not qualified to answer that.

In all the schemes I've seen contractors used, none of them have the same fact pattern as the Murray Group case, none have side letters, the trust arrangements, loan arrangements and loan terms are all different. Consequently the article expressed my OPINION that it would be difficult for HMRC to apply the Murray Group decision to the facts of most (not all) trust/loan schemes.

In my dealings with contractors I have always been careful to declare my interest be that personal, professional or commercial. I have not hidden any of these points. Regular members of this website and contributors to the forum are well aware of my position and will take into account my motivations in anything I produce, even if I did not make such declarations.

I therefore REJECT your insinuation that it was a cynical piece of advertising. I suggest that view has more to do with your attitude and approach than mine.

However, you are entitled to your view and eventually who knows, your rather bold assertion that all contractor EBT schemes (whatever they are) have been decided on the basis of a case about PAYE due on employees might be right. I don't think so but then again I prefer to apply logic and analysis to facts rather than rely upon rumour from unknown and for I know unreliable sources.

minestrone
18th November 2015, 21:38
As I said reliable and verifiable information is always useful. Rumour and speculation is not.

I'm assuming you refer to my article in CUK?

That article took as its base case the fact that in the Murray Group decision it was an agreed fact that the managers/players were employees. This was accepted by all sides at the FTT hearing. Consequently the importance of the side letters was whether they formed part of an existing contract of employment. The Judges decided they did.

For the managers/employees in the case the side letter was NOT a contract of employment, but rather formed part of an existing contract enshrined elsewhere. I have no comment on whether the side letters were legal/illegal under the rules of the Scottish FA. I'm not qualified to answer that.

In all the schemes I've seen contractors used, none of them have the same fact pattern as the Murray Group case, none have side letters, the trust arrangements, loan arrangements and loan terms are all different. Consequently the article expressed my OPINION that it would be difficult for HMRC to apply the Murray Group decision to the facts of most (not all) trust/loan schemes.

In my dealings with contractors I have always been careful to declare my interest be that personal, professional or commercial. I have not hidden any of these points. Regular members of this website and contributors to the forum are well aware of my position and will take into account my motivations in anything I produce, even if I did not make such declarations.

I therefore REJECT your insinuation that it was a cynical piece of advertising. I suggest that view has more to do with your attitude and approach than mine.

However, you are entitled to your view and eventually who knows, your rather bold assertion that all contractor EBT schemes (whatever they are) have been decided on the basis of a case about PAYE due on employees might be right. I don't think so but then again I prefer to apply logic and analysis to facts rather than rely upon rumour from unknown and for I know unreliable sources.

Where have I said that? I have been very very clear at each point that the rangers case was different due to the side letters, you seem to be claiming different. Where? Point me to my posts!

Let's disclose the facts, are you making money from EBT claims?

minestrone
18th November 2015, 21:50
This is not your OPINION, you cannot REJECT this, it is the verdict of the Scottish Court of Session, it is now the law of the land...


We accordingly conclude that the primary argument presented for HMRC is correct: the payments made by the respondents to the Trustee of the Principal Trust in respect of employees were emoluments or earnings, and are accordingly subject to income tax. Furthermore, those payments were made at the time of payment to the trustee of the Principal Trust, with the result that the obligation to deduct tax under the PAYE system fell on the employer who made such a payment.

You are not in position to object, you cannot complain, your wittering's on the internet mean nothing.

minestrone
18th November 2015, 21:54
Is that "reliable and verifiable information"

jonnieboy
19th November 2015, 09:09
"with the result that the obligation to deduct tax under the PAYE system fell on the employer who made such a payment"

I just woke up when I read that...

jbryce
19th November 2015, 21:00
"with the result that the obligation to deduct tax under the PAYE system fell on the employer who made such a payment"

I just woke up when I read that...

...this is going to run and run....

minestrone
19th November 2015, 22:57
I could actually ask someone who would certainly know, but I'll wait till the 28 days are up before asking their views.


I asked the question tonight, the person I asked has 100% knowledge of the direction of the case, BDO are 100% not appealing the decision.

jbryce
19th November 2015, 23:13
I asked the question tonight, the person I asked has 100% knowledge of the direction of the case, BDO are 100% not appealing the decision.

Cool. Not sure it makes masses of difference tbh.

On another note, I do owe you an apology - luckily the mods removed my post which contained a lame insult directed at you - but it was still a bit tulip of me and I should know better....mind you I was in a scheme so my judgement is a tad questionable.

minestrone
19th November 2015, 23:41
Cool. Not sure it makes masses of difference tbh.

On another note, I do owe you an apology - luckily the mods removed my post which contained a lame insult directed at you - but it was still a bit tulip of me and I should know better....mind you I was in a scheme so my judgement is a tad questionable.

No apology is necessary and if I pissed anyone of in this thread I do apologise myself.

The moderation of this thread was well done, locked, edited then allowed to continue.

I'm a creature of General, abuse and sometimes extreme abuse is tolerated which I think is why I come back to this site. I understand that it is not allowed to happen in this area of the site.

My source on this information is impeccable, if I delivered that incorrectly in professional forums then I again apologise.

webberg
20th November 2015, 08:20
I asked the question tonight, the person I asked has 100% knowledge of the direction of the case, BDO are 100% not appealing the decision.

Perhaps not surprising if correct.

The decision as it stands is one which will give both sides of the debate ammunition and the lack of a final authority will mean that some other group of users will be funding this.

In many ways the clock is now reset before we get a final decision on the trust type arrangements.

DcoC
20th November 2015, 08:51
Looks this this paper is 100% sure of it's sources

Rangers oldco liquidators set to take 'Big Tax Case' to a Supreme Court appeal (From Herald Scotland) (http://m.heraldscotland.com/news/14040779.Rangers_oldco_liquidators_set_to_take__Bi g_Tax_Case__to_a_Supreme_Court_appeal/?ref=mr&lp=8)

minestrone
20th November 2015, 09:56
Looks this this paper is 100% sure of it's sources

Rangers oldco liquidators set to take 'Big Tax Case' to a Supreme Court appeal (From Herald Scotland) (http://m.heraldscotland.com/news/14040779.Rangers_oldco_liquidators_set_to_take__Bi g_Tax_Case__to_a_Supreme_Court_appeal/?ref=mr&lp=8)

Surprising, my source might possibly work with BDO. They might possibly work quite close to the people that are on this.

<mod snip>

Iliketax
20th November 2015, 10:16
Surprising, my source ...

Can I suggest that this post is deleted by the moderators.

minestrone
20th November 2015, 10:52
Can I suggest that this post is deleted by the moderators.


Why? I had a 20 minute phone call yesterday with someone who might possibly work with BDO. Who might possibly work with people directly involved in this case.

I don't see why some paper article from a paper that has always been very supportive of rangers old and new and does not have one quote from anyone in DBO holds more gravitas than what I am saying that came from someone who might possibly work in DBO.

If I'm wrong then come back in 3 weeks and tell me I'm wrong.

minestrone
20th November 2015, 11:00
And I am certainly more than happy to PM any mod the linkedin profile of my source who might possibly work with DBO.

Iliketax
20th November 2015, 11:33
Why? I had a 20 minute phone call yesterday with someone who might possibly work with BDO. Who might possibly work with people directly involved in this case.

I don't see why some paper article from a paper that has always been very supportive of rangers old and new and does not have one quote from anyone in DBO holds more gravitas than what I am saying that came from someone who might possibly work in DBO.

If I'm wrong then come back in 3 weeks and tell me I'm wrong.

I don't care whether you and/or your mate works for BDO or DBO or anyone else. But the second part of your original post the isssue with sub judice / contempt of court. And don't forget that Lord Turnbull has imposed reporting restrictions.

webberg
20th November 2015, 11:38
I'd like to ask the mods to consider moving some of this to a separate thread as it was originally set up to consider the decision and its implications rather than speculate on the fate of individuals etc.

I fear that the substantive issues here are being drowned in the noise.

minestrone
20th November 2015, 11:56
I don't care whether you and/or your mate works for BDO or DBO or anyone else. But the second part of your original post the isssue with sub judice / contempt of court. And don't forget that Lord Turnbull has imposed reporting restrictions.

The second sentence, I don't actually have any idea what it means, it looks to be a statement, then full stop, and you go onto talk about something else as the 'And' at the start of your third sentence suggests.

On Lord Turnbull, I believe I made reference to the reporting restrictions in post 154 and I have followed these to the letter. IF you are inferring that you are somehow telling me something new or that I have somehow not followed the advice then please let me know.

Otherwise it might suggest you are just writing stuff for the sake of it.

minestrone
20th November 2015, 12:04
I'd like to ask the mods to consider moving some of this to a separate thread as it was originally set up to consider the decision and its implications rather than speculate on the fate of individuals etc.

I fear that the substantive issues here are being drowned in the noise.

IF you would actually listen to the 'noise' that you tell me I am making then you might miss out on the information not everyone in the case had a side letter therefore this judgement cannot be in anyway rule directly on individuals. David Murray received a substantial sum from the EBT scheme but did not have a side letter, the side letters were important as they 'reportedly' told the players that the 'club' would always be liable for the tax. There is a suggestion that Murray can now be followed for this taxable amount.

Rather than simply attacking me, I'm here to give advice on this case and it evidently seems I am more informed than most on this.

webberg
20th November 2015, 12:24
I didn't think I was "attacking" you. If you feel that way, then my apologies.

I'm also not doubting your knowledge of the case. Whilst we may disagree as to the relative importance of certain pieces of evidence or dicta, I'm not suggesting that your view is incorrect.

Perhaps where we differ is that I've spent a lot of time looking at other contractor arrangements and I'm far from certain that the reasoning in Murray can be applied directly or indirectly to those arrangements. I'm not alone in that view and have posted links to others.

I freely acknowledge that the decision has split the tax profession and there are some who have the opposite view. Time will tell who is more correct.

This thread was started to discuss the application of the Murray decision to those other arrangements. I doubt that any of the managers/players who used the scheme discussed in the case are regular visitors here and as such I'm more interested in how the learning from the case is going to be applied. I think most readers of this thread are of the same mind.

Whilst I'm sure that many Scottish football fans have an interest in the case for perhaps non tax reasons (and I confess to being surprised at the strength of feeling) and are interested in the "what happens next" questions, with respect, this thread is not about that and hence I have asked (politely) for a separation.

jbryce
20th November 2015, 12:25
I'd like to ask the mods to consider moving some of this to a separate thread as it was originally set up to consider the decision and its implications rather than speculate on the fate of individuals etc.

I fear that the substantive issues here are being drowned in the noise.

Agree with this - can you crate a new thread 'Rangers appeal' or suchlike?
In the end - I'd rather be debating if the issues covered by the judgement have any further implications as regards the Contractor EBT arrangements.

minestrone
20th November 2015, 14:24
Perhaps where we differ is that I've spent a lot of time looking at other contractor arrangements and I'm far from certain that the reasoning in Murray can be applied directly or indirectly to those arrangements. I'm not alone in that view and have posted links to others.


I have said from just about my first post on this subject and multiple times after that the Rangers ruling was not going to make a difference to any EBT system with contractors ruling in future due to the side letters rangers made to the players.

No contractor with an EBT system ever had a side letter I would imagine and I posted a link to the verdict that clearly stated that the side letters were the major issue in this case.

For what it is worth I have no issue with any contractor that used these schemes, I don't think they were correct but retrospectively going after users is also wrong. That is me saying I have a certain level of agreement with yourselves.

minestrone
20th November 2015, 14:41
Whilst I'm sure that many Scottish football fans have an interest in the case for perhaps non tax reasons (and I confess to being surprised at the strength of feeling) and are interested in the "what happens next" questions, with respect, this thread is not about that and hence I have asked (politely) for a separation.

IF you think "Scottish football fans" had an 'interest' in this case I suggest you look again, Lord Menzies. Lord Justice Clerk and Lord Drummond Young had the final 'interest'

Not Losing Any Sleep
20th November 2015, 14:42
IF you think "Scottish football fans" had an 'interest' in this case I suggest you look again, Lord Menzies. Lord Justice Clerk and Lord Drummond Young had the final 'interest'

You may have had your soup, but the fat lady is yet to sing!

fullyautomatix
20th November 2015, 15:55
If the case was won by Rangers, no doubt the language here would have been along the lines of , EBT won! We won! We are saved!

But HMRC won, so nothing to see here, move on. This only applies to Rangers and all other EBTs are legal and so on and so forth.

DotasScandal
20th November 2015, 16:06
If the case was won by Rangers, no doubt the language here would have been along the lines of , EBT won! We won! We are saved!
But HMRC won, so nothing to see here, move on. This only applies to Rangers and all other EBTs are legal and so on and so forth.

What did you expect?

jbryce
20th November 2015, 16:24
If the case was won by Rangers, no doubt the language here would have been along the lines of , EBT won! We won! We are saved!

But HMRC won, so nothing to see here, move on. This only applies to Rangers and all other EBTs are legal and so on and so forth.

On that, I think you're wrong. For those of us in this mess, we know that there would have been little applicability if we had won. We would still have APNs to deal with and we would still face potential litigation.

However, nothing to see here? Who knows - that's one for the specialists, not for the likes of you and me.

minestrone
20th November 2015, 16:25
What did you expect?

not paying 5% on my income was a bit of a chancery?

fullyautomatix
20th November 2015, 16:27
not paying 5% on my income was a bit of a chancery?


I expect the HMRC to raid the offshore trusts of all the users who claim that they have no cash left.

minestrone
20th November 2015, 16:38
On that, I think you're wrong. For those of us in this mess, we know that there would have been little applicability if we had won. We would still have APNs to deal with and we would still face potential litigation.

However, nothing to see here? Who knows - that's one for the specialists, not for the likes of you and me.

You see this is the dissonance, 'you are wrong and we are in a mess because of you lot'

Lets say I pitched for a gig at 500 a day, you could have pitched for the same gig at 400 and walked out with more.

I'm running a business and you got a competitive advantage over me, not because you are more capable but because you screwed the tax system. Now you are all screaming for sympathy and solace, I'm sorry but there is none here.

minestrone
20th November 2015, 16:59
Look, I'm out of this discussion, I got involved as I am a Celtic fan who has been really pissed they got away with hiring payers to beat my team but you guys have a substantially different and crucially more important aspect being on the hard side from the HRMC.

Good luck with your cases, love and kisses

jbryce
20th November 2015, 17:33
You see this is the dissonance, 'you are wrong and we are in a mess because of you lot'

Lets say I pitched for a gig at 500 a day, you could have pitched for the same gig at 400 and walked out with more.

I'm running a business and you got a competitive advantage over me, not because you are more capable but because you screwed the tax system. Now you are all screaming for sympathy and solace, I'm sorry but there is none here.

Errr this CUK - if I wanted solace and comfort I'd be in mumsnet.

That's George Osborne's argument. Why should you, because you use a Ltd company, be able to take home more than a guy on the same rate using an Umbrella company and paying full PAYE?

You shouldn't (arguably) and, as a result, the Autumn Statement is likely to target contractors because we are low hanging fruit. We'll all then use Umbrella companies and it'll be a level playing field.

Mods - this has bugger all to do with Rangers can you take soupy, and me, to another forum where this has been aired a zillion times.

minestrone
20th November 2015, 19:45
Errr this CUK - if I wanted solace and comfort I'd be in mumsnet

That's George Osborne's argument. Why should you, because you use a Ltd company, be able to take home more than a guy on the same rate using an Umbrella company and paying full PAYE?

You shouldn't (arguably) and, as a result, the Autumn Statement is likely to target contractors because we are low hanging fruit. We'll all then use Umbrella companies and it'll be a level playing field.

Mods - this has bugger all to do with Rangers can you take soupy, and me, to another forum where this has been aired a zillion times.

OK, very last post, cojak has pretty tight rules on professional, I respect that, those rules don't apply ( as much ) on general and I am certainly not know for any type of solace of comfort in that forum. If you want to take the discussion there then start a thread, don't hide behind a 'mod request to move a thread'.

mav2010
20th November 2015, 20:04
"I got involved as I am a Celtic fan"

I've been reading your drivel over the past couple of days and this certainly explains a lot!:tongue

StrengthInNumbers
20th November 2015, 20:17
http://m.heraldscotland.com/news/14040779.Rangers_oldco_liquidators_set_to_take__Bi g_Tax_Case__to_a_Supreme_Court_appeal/

centurian
20th November 2015, 20:31
And this one...

Rangers liquidators BDO ‘to appeal Big Tax Case verdict’ - The Scotsman (http://www.scotsman.com/sport/football/teams/rangers/rangers-liquidators-bdo-to-appeal-big-tax-case-verdict-1-3953953)

Okay, they could be taking it all from the same source, and minestrone could still be correct.

But I wouldn't exactly bet my house on a minestrone "100%"

regron
20th November 2015, 21:04
And this one....
http://www.telegraph.co.uk/sport/football/teams/rangers/12008956/Rangers-administrators-to-take-HMRC-all-the-way-to-the-Supreme-Court.html

njwilli3
20th November 2015, 21:55
So Celtic used an EBT scheme for Juninho? Minestrone - pot calling the kettle black then?

jbryce
20th November 2015, 22:26
OK, very last post, cojak has pretty tight rules on professional, I respect that, those rules don't apply ( as much ) on general and I am certainly not know for any type of solace of comfort in that forum. If you want to take the discussion there then start a thread, don't hide behind a 'mod request to move a thread'.

Not really - it's just a bit dull. You must be the only Celtic fan (in England??) who really gives much of a tulip about Rangers. Aren't you all too busy running away with the Scottish Premiership against errrr zero opposition?
Hell that's your last Post....over to General....

minestrone
20th November 2015, 22:29
Hell that's your last Post....over to General....

Be my guest

jbryce
20th November 2015, 22:31
Be my guest

:)

pimpernell
23rd November 2015, 14:39
I didn't think I was "attacking" you. If you feel that way, then my apologies.

I'm also not doubting your knowledge of the case. Whilst we may disagree as to the relative importance of certain pieces of evidence or dicta, I'm not suggesting that your view is incorrect.

Perhaps where we differ is that I've spent a lot of time looking at other contractor arrangements and I'm far from certain that the reasoning in Murray can be applied directly or indirectly to those arrangements. I'm not alone in that view and have posted links to others.

I freely acknowledge that the decision has split the tax profession and there are some who have the opposite view. Time will tell who is more correct.

This thread was started to discuss the application of the Murray decision to those other arrangements. I doubt that any of the managers/players who used the scheme discussed in the case are regular visitors here and as such I'm more interested in how the learning from the case is going to be applied. I think most readers of this thread are of the same mind.

Whilst I'm sure that many Scottish football fans have an interest in the case for perhaps non tax reasons (and I confess to being surprised at the strength of feeling) and are interested in the "what happens next" questions, with respect, this thread is not about that and hence I have asked (politely) for a separation.

Hi Graham,

I read this summary about the Rangers case from an email received by a company calling themselves INOH:

Was it actually a win for HMRC?

In what has turned into a political case in which HMRC needed to be seen to win, they may have won the battle, only to have lost the war. There were a number of rulings made that were actually a huge blow to HMRC in favour of previous EBT users:

Contributions are tax deductible for the employer.
Neither employer nor employee is to be taxed on trust investment returns.
The movement of funds from main trust to sub-trusts is not an event giving rise to income tax liability on the employee.
The payment of cash funds out of the trust (even to the employee) is not an event giving rise to income tax liability on the employee.
Loans to the employee are not taxable as the employee’s income.
Loans to the employee are deductible against his IHT estate.

Are these conclusions valid?

Fred Bloggs
23rd November 2015, 16:53
Hmmm, it seems INOH are scheme operators.

webberg
23rd November 2015, 17:33
Hmmm, it seems INOH are scheme operators.

It is. The virtual office address is also tainted in many internet searches.

Make no mistake here.

HMG, via HMRC is involved in a well funded and determined campaign to force many contractors to pay a tax rate that is closer that seen with employees. We have seen changes to dividend taxation, travel and subsistence rules are likely to have changes announced this week (perhaps effective next April) and IR35 is a due a "revision" perhaps April 17 at the latest.

ALL and ANY arrangement that says that very high take home pay rates seen in the past are possible WILL DEFINITELY BE CHALLENGED.

A QC opinion is NO DEFENCE. A DOTAS number is NOT an HMRC approval. Being "complaint" is NOT any guarantee of success and is a largely meaningless word in this context.

If you are tempted by such schemes ask yourself why you need complicated arrangements to receive remuneration. If the answer is that you don't, the WALK AWAY.

The ONLY time you should consider aggressive schemes is if you see a letter from HMRC saying that the arrangements work, AND includes a full description of the arrangement. I've been doing this job 40 years and have NEVER seen one.

Ask for that letter. If you don't get one WALK AWAY.

webberg
23rd November 2015, 17:34
Hi Graham,

I read this summary about the Rangers case from an email received by a company calling themselves INOH:

Was it actually a win for HMRC?

In what has turned into a political case in which HMRC needed to be seen to win, they may have won the battle, only to have lost the war. There were a number of rulings made that were actually a huge blow to HMRC in favour of previous EBT users:

Contributions are tax deductible for the employer.
Neither employer nor employee is to be taxed on trust investment returns.
The movement of funds from main trust to sub-trusts is not an event giving rise to income tax liability on the employee.
The payment of cash funds out of the trust (even to the employee) is not an event giving rise to income tax liability on the employee.
Loans to the employee are not taxable as the employee’s income.
Loans to the employee are deductible against his IHT estate.

Are these conclusions valid?

Hello, I've moved this to a different thread.

Fred Bloggs
23rd November 2015, 18:52
Wow, googling INOH's office address is eye opening. Thanks for the hint.

TestMangler
23rd November 2015, 19:34
So Celtic used an EBT scheme for Juninho? Minestrone - pot calling the kettle black then?

Far be it from me to defend Minestrone, cause he's a tosser, but Celtic only used an EBT scheme for Juninho and have already paid off any deemed tax that anyone could claim wasn't paid, so no.

DcoC
30th November 2015, 15:52
As expected BDO submit appeal

BDO seek to appeal Rangers tax case decision over use of EBTs - BBC News (http://www.bbc.co.uk/news/uk-scotland-glasgow-west-34964491)

Tip - if a celtc fan has an opinion on Rangers, always assume the opposite is true. You'll be right more often than you are wrong

DotasScandal
8th March 2016, 17:47
Just so you know...

BDO allowed to appeal Rangers tax case to Supreme Court
(http://www.bbc.co.uk/news/uk-scotland-glasgow-west-35753304)

Not Losing Any Sleep
14th March 2016, 12:26
Just so you know...

BDO allowed to appeal Rangers tax case to Supreme Court
(http://www.bbc.co.uk/news/uk-scotland-glasgow-west-35753304)

Rangers ‘big tax case' rolls on | AccountingWEB (http://www.accountingweb.co.uk/article/rangers-big-tax-case-rolls/597900)

Possible hearing date of Spring 2017 and I guess a judgement by late summer 2017.

StrengthInNumbers
14th March 2016, 21:13
2017 same time we should have decision on first contract mass marketed EBT scheme from FTT. Let's hope tide on EBT and ToAA starts turning opposite to HMRC view.