s223 - £190,000 charge ON TOP OF my settlement

[Ex Contractor]

Has anybody mentioned Chilcott to you?

Broadly where a law produces an absurd or unintended result, a Judge may be able to mitigate it.

You need to get advice.

No I've not heard of that, I will look into it.

I've been getting ongoing advice from the company I paid for my EBT defence. They had planned on taking this to the first tier & the upper tier tribunal for a nominal fee and then if it came to it, group funding the defence at the court of appeal. The trouble is it looks like they may not have enough numbers to make it cost effective if it goes to appeal.

[webberg]

Defending EBT schemes is an undertaking for the brave.

The basis upon which many were claimed to be effective were a couple of tax cases Dextra and Sempra which HMRC lost. The law was "clarified" post those cases and then Lord Hodge in Rangers said that the decision in both cases was wrong.

Their value in a defence is therefore low.

Many (most) EBT schemes were used to extract funds from an owner managed business. There is therefore a close connection between "employer" and "employee".

In a lot of cases, even if the employee can escape a tax charge, the employer will be faced with it. If that employer is unable to pay, then it can be transferred to owner.

There are circumstances in which arguments exist which may remove or reduce the tax bills but they would all be bespoke. (Or at least I'm unable to think of a defence that might apply to a large body of similarly built EBTs - perhaps others can).

I would therefore agree that finding enough EBT users to fund a litigation (perhaps a minimum £300k to FTT) is going to be difficult and keeping them unified behind a reasonably valid argument might be even more difficult.

That said, I don't know who is advising you and for all I know they have a killer argument.

[Ltdoptions]

What an absolute nightmare. What happened to full & final settlement?! Absurd is the right word....no better example of 'maximising revenues' no matter the cost. How the hell can they expect someone to pay the same tax bill twice. HMRC seem intent on grinding people into the dust.

[Ltdoptions]

So just to clarify, if a OMB director drew 150k via an EBT, what is his final liability if the company is insolvent ?

It seems in the case of the OP that he has already settled his company's liability and is now being chased for the parallel personal liability (or vice versa) ???

[Ex Contractor]

My tax adviser said they had over 300 clients register an interest in fighting s223, but a large number have dropped out, so the defence may not go ahead.

HMRC are trying to take me for every penny I've got. I've just started a new business and it looks like it will be finished before it even starts. I'm going to write a letter to my MP (I'm getting desperate), I doubt they even know what's going on.

[webberg]

My tax adviser said they had over 300 clients register an interest in fighting s223, but a large number have dropped out, so the defence may not go ahead.

HMRC are trying to take me for every penny I've got. I've just started a new business and it looks like it will be finished before it even starts. I'm going to write a letter to my MP (I'm getting desperate), I doubt they even know what's going on.

You need to be pressing your tax adviser because 300 is a big enough number to fight. In fact a third of that is big enough to fight, so why aren't they?

HMRC is immune to MPs but worth a try.

[BrilloPad]

I know of one group with 12 people in. They put up £5k each to fight HMRC. That was enough for a QC opinion.

[webberg]

EBTs and their cousins in the EFRB/EEFRB/alphabet soup group are a long way into the litigation process.

There have been cases heard and lost, GAAR opinions (all bad), settlement opportunities (now closed).

HMRC are likely of the view that any approach now is to be met with maximum resistance and volleys from the growing arsenal against such schemes.

Any approach via litigation routes will need to find an argument that is separate from those that have gone before as otherwise no Tribunal will hear them.

That will require some serious research time from legal types.

From finding and developing the idea to appearing in Tribunal might be 12 to 18 months. During this time, pressure to pay demands increases.

Even if I had any ideas about a realistic defensive posture for such schemes that has not already been considered (I don't) I'm guessing that research, team formation, inevitable HMRC delaying tactics and support costs, perhaps £750k to First Tier in 18 months.

The larger EBT etc providers are all dust. The promoters largely the same. There are perhaps a couple of specialist advisory firms (not us) and I suspect a whole bunch of smaller firms who are perhaps out of their depth.

How you bring all this together to fund a decent attempt I don't know.