Loan charge - HMRC update

[webberg]

Loans were taken between 2014-2016.
A self-assessment was never made.
An inquiry by HMRC was never made.
Communication was never ever made by HMRC.

The only ever communication received was this template.
How does friend proceed from here? Don't you have to have at least one year in inquiry?

Very Very stressed.

Go and get advice if you are that stressed.

A few hundred pounds spent to assuage your stress is worth it.

[RickG]

I don't know what the present agenda of the APPG is.

However the 2010 date is not "pulled out of thin air". That is a myth that unfortunately seems to have gathered some ill deserved credibility.

SAM based that date in when PART 7A of ITEPA was introduced. 9th December 2010.

I believe when draft legislation was introduced, according to this: https://www.taxjournal.com/articles/...d-remuneration

[lowpaidworker]

I don't know what the present agenda of the APPG is.

However the 2010 date is not "pulled out of thin air". That is a myth that unfortunately seems to have gathered some ill deserved credibility.

SAM based that date in when PART 7A of ITEPA was introduced. 9th December 2010.

OK so I respect your opinion. However I am siding with David Davies on this. I beleive his comments represent the thousands of people caught up inthe mess. Whilst HMRC might well publish an update on their own website or in a tax journal there is no logical way I would ever follow these postings/annoucements.

I guess this is the point where maybe the Tax advisors/Scheme Promotors became greedy and gambled. Ideally my Umbrella firm would have said we are closing down and you need to look elsewhere. Instead they sent letters asking to sign new employment and agreements. They wanted to protect their revenues no doubt.

However I maintain the first time HMRC started to write to me was late 2014 and early 2015 ... post Rangers. Until then I submitted many tax returns an heard nothing back. Seems like both the Tax Advisors/Scheme Promotors and HMRC were all gambling on the SC Rangers outcome.

I dont beleve that is fair is on the end user.

[NeedTheSunshine]

Loans were taken between 2014-2016.
A self-assessment was never made.
An inquiry by HMRC was never made.
Communication was never ever made by HMRC.

The only ever communication received was this template.
How does friend proceed from here? Don't you have to have at least one year in inquiry?

Very Very stressed.

If you need to declare income to HMRC you fill in a self assessment. It is your responsibility to do it and not HMRC's responsibility to prompt you to do it. The clue is in the SELF bit.

At a guess I would say that your friend is liable for the loan charge as they didn't make full disclosure to HMRC. If they got the generic letter they are on HMRC's list of loan scheme users.

I am not a tax advisor and I suggest that your friend consults one who is knowledgeable in this field.

[NeedTheSunshine]

OK so I respect your opinion. However I am siding with David Davies on this. I beleive his comments represent the thousands of people caught up inthe mess. Whilst HMRC might well publish an update on their own website or in a tax journal there is no logical way I would ever follow these postings/annoucements.

I guess this is the point where maybe the Tax advisors/Scheme Promotors became greedy and gambled. Ideally my Umbrella firm would have said we are closing down and you need to look elsewhere. Instead they sent letters asking to sign new employment and agreements. They wanted to protect their revenues no doubt.

However I maintain the first time HMRC started to write to me was late 2014 and early 2015 ... post Rangers. Until then I submitted many tax returns an heard nothing back. Seems like both the Tax Advisors/Scheme Promotors and HMRC were all gambling on the SC Rangers outcome.

I dont beleve that is fair is on the end user.

HMRC don't play fair. Once you accept this you can move on and start taking action. Have you joined LCAG?

[lowpaidworker]

HMRC don't play fair. Once you accept this you can move on and start taking action. Have you joined LCAG?

ages ago.

[webberg]

I believe when draft legislation was introduced, according to this: https://www.taxjournal.com/articles/...d-remuneration

Yes it was.

By that time the Dawn Primarolo statement made whilst she was at Treasury to the effect that Government would announce legislation which would have immediate (or even retrospective) effect to correct tax wrongs was accepted practice.

It was practice to announce that a law would be written that would be effective from xx/xx/xxxx and that had the power of law.

In this case we had the added advantage of draft law. A draft that hardly changed.

I don't want to be pedantic or pick a fight here and you may with some justification say that draft legislation is not law: that you were not personally aware of the law until later: that HMRC did not make it obvious that this was their view.

All of those arguments might be deployed, but they are in the "extremely difficult" category in terms of winning the argument that the law and therefore HMRC's general view and specific law was not in circulation from that date.

As I said, I have no idea what the agenda of the APPG is. I expect to be better informed next week.

Just don't cling to a false hope. Be realistic please.

[NeedTheSunshine]

ages ago.

Then you know that HMRC don't play fair. Join in with the campaigning and take advice on your own situation.

[RickG]

Yes it was.

By that time the Dawn Primarolo statement made whilst she was at Treasury to the effect that Government would announce legislation which would have immediate (or even retrospective) effect to correct tax wrongs was accepted practice.

It was practice to announce that a law would be written that would be effective from xx/xx/xxxx and that had the power of law.

In this case we had the added advantage of draft law. A draft that hardly changed.

I don't want to be pedantic or pick a fight here and you may with some justification say that draft legislation is not law: that you were not personally aware of the law until later: that HMRC did not make it obvious that this was their view.

All of those arguments might be deployed, but they are in the "extremely difficult" category in terms of winning the argument that the law and therefore HMRC's general view and specific law was not in circulation from that date.

As I said, I have no idea what the agenda of the APPG is. I expect to be better informed next week.

Just don't cling to a false hope. Be realistic please.

I think all very valid points.

However, there's many discrepancies about employer and employee schemes post Dec 2010 - and many of the soundbites from HMRC conflate the two.

On top of which, SAM himself says in his report that the law did not actually become clear until 2015, which is when HMRC changed their position (and therefore, by definition, could not have "always been clear" - or certainly not in 2010):

2.22 HMRC began to have success in their appeal in 2015 against the earlier
decisions in favour of Rangers Football Club. The Inner House of the Court of
Session (equivalent to the English Court of Appeal) found in HMRC’s favour
in 2015. The case was finally decided in HMRC’s favour by the Supreme
Court in 2017.9 The decision held unanimously that the contributions into
the trust were employment income, with a PAYE liability for both income tax
and NICs falling on the employer. This followed a change in HMRC’s
argument at the Court of Session, that PAYE was due upon payments by the
employer into an EBT – meaning that the circumstances in which the tax
liability could be transferred from the employer to individua scheme users
was narrower than under HMRC’s previous argument which had not been
accepted by the FTT or UT. The Supreme Court also held that two earlier
cases (Dextra and Sempra), had been wrongly decided by the lower
tribunals.

[webberg]

I think I've said before that nobody knew what it meant in 2010 and probably nobody does now either.

That didn't stop a lot of promoters telling you a few days after that publication that nothing had changed and that everything could carry on as before (only to change in March 2011).

These promoters were either prescient seers of remarkable ability, had tax geniuses in their midst or were terrified that the gravy train would stop and were prepared to be less than honest.

I'll let you choose which.