IQ Consultants, Felicitas Solutions, ECS Trustees - loan repayment demands

[why]

I was involved with Sanzar and Garraway over a number of years. My P11D's from Sanzar showed 'Loans' were paid or discharged. HMRC came for me for Tax and NI on these amounts and I paid. Later years with Garraway P11D's showed 'Loans' were not paid or discharged, HMRC came for me for Tax and NI on these amounts and I paid. So damned if you do, Damned if you don't. Therefore do not pay Sacco s--t or his scumbag crew any monies. HMRC treat pre 2011 and post 2011 the same. Taxable income for purposes of paying Tax and NI.

However, I would draw your attention to the original HMRC case against Rangers FC Whereby Dr Heidi Poon was the one ( out of Three) dissenting voice which came out in favour of HMRC by stating that in her opinion:
the dissenting opinion by Dr Poon concentrates on a purposive interpretation (in line with Ramsay) of the underlying transactions. Dr Poon relies upon the cases of Garforth and Aberdeen Asset Management and concludes that the loans made through the EBT were payments of emoluments subject to PAYE and NIC.

This dissention goes also to the Supreme Court Judgement whereby HMRC won the case on appeal. This states that:
From my findings of fact, the juristic purpose of the loans that gives rise to their
recoverability is totally devolved from the commercial purpose that gives rise to the
contingency of repayment enforcement. The contingency of repayment enforcement
144
is designed not to materialise; it can be interpreted as an ‘anti-Ramsay device’ in the
form of ‘a commercially irrelevant contingency’ [Lord Nicholls]. In respect of how
the scheme was ‘intended to operate’, it was the ‘manifested intentions of the parties’
that the loans would never be enforced for repayment – that is how the scheme was
intended to work. For those employees who took a more cautionary 5 approach towards
this remote contingency, they were given the assurance that in the unlikely event that
the loans were enforced for repayment, Rangers would indemnify them against the
loan repayment (as in the cases of Mr Evesham and Mr Coventry). To date, no loan
repayment has ever been enforced; and from the witnesses’ evidence, whether it was
10 Mr Grey or his clients, or the corporate employees, the understanding was clear: the
loans would not be enforced and were intended to be renewed indefinitely till the
death of the employees. As a House of Lords judgment, Scottish Provident gives
authority to disregard the contingency of repayment enforcement of the loans as
commercially irrelevant. In determining the composite effect of the transaction,
15 regard is to be given to how the scheme was ‘intended to operate’. The composite
effect of the transaction in the instant case – the end result of ‘emoluments’ – is
therefore undisturbed once Lord Nicholls’ judgment is followed through, by
disregarding the commercially irrelevant contingency of the loans being enforced for
repayment.

In conclusion I would suspect that as the judgement of the supreme court states, the intention of the 'Loan' were that they were never intended to be repaid and therefore if Sacco s--t and his cronies want any money out of me, they need to go back to court, overturn the judgement of the supreme court, by proving they were 'Loan's ' in the true commercial sense...

Really ???

Nice one, that appears straight forward then. I'm also based 'north', so thats what the supreme court stated and like you say, see if that heap of Sacco could overturn that judgement.

[webberg]

Thanks for that. Still , if its all fictitious then surely so is their stance fictitious, it's a made up debt, one that never existed (as we all know) and the whole thing a fabrication.

That may indeed be the case.

What would happen though if you went to a tax court and said that the loan was real?

[webberg]

Nice one, that appears straight forward then. I'm also based 'north', so thats what the supreme court stated and like you say, see if that heap of Sacco could overturn that judgement.

It's a TAX judgement!

Lord Hodge had nothing to say about the loan other than the fact that it was made.

[why]

That may indeed be the case.

What would happen though if you went to a tax court and said that the loan was real?

Well I'm not a tax specialist so couldn't answer that.

However, just thinking out loud, if they did that, then my P11D states that it was discharged, It surely cant be 'both ways', as in, if the loan was 'real', then my P11D discharge was real.

[NickLeeson2]

One day there will be a conclusion to all this..... maybe.

It seems this loan charge battle between the HMRC and the end user, Scammers and end user has no definitive answers.

Where is that head blown up emoji, enter here:

[Superfly]

Webberg, I was with Sanzar. The only thing I signed was a contract for employment, no mention of loans, I was paid NMW. The rest was paid to me direct to my account without me asking for it or having signed anything to request this payment, neither as a loan or under any other premise.

The word loan was never (I emphasise again, never) mentioned to me, neither in any written or verbal communication.

Even if you say that if my salary has been paid into a trust and I lose all rights to it, but it was paid back to me without me requesting it.

If you imagine somebody put some money into your bank account without you asking for it (maybe they got the account number wrong and it ended up in your account instead of the intended recipient). There is no written or verbal record of you having asked for this money. Now, over 10 years later the sender realises their mistake and requests the money back, do you think they will get it back? No chance. Even a month later it may be difficult to get the money back. This is why we are asked to check and double check the account number and sort code before transferring money.

How can they now ask for it back? It is a silly notion that I will not be entertaining. I am not saying that I am withholding their money, I am saying that the net cumulative affect of the this transaction is that I get to maintain rights to money which was originally mine anyway.

[webberg]

Well I'm not a tax specialist so couldn't answer that.

However, just thinking out loud, if they did that, then my P11D states that it was discharged, It surely cant be 'both ways', as in, if the loan was 'real', then my P11D discharge was real.

HMRC would ask you what proof you had that the loan had been discharged.

A debit to your bank account would be incontrovertible evidence - I have never seen that.

Instead you have a mechanism that claims something like:

Money was earned by the promoter who passed 70% of it to a trust.

You are a beneficiary of the trust.

The trust loaned this money to you until the end of the tax year.

The trust then decided that as your interest in the trust assets was equal to your liability under the loan, they would net the two down = net position zero.

Unfortunately tax does not work by "netting".

Tax says that the probable answer here is that you had a distribution from the trust (taxable) and used it to repay the loan (not tax relieveable). In essence the trust had converted a set of rights into cash.

Where is that cash?

Can any of the above be evidenced by debits and credits in a bank account?

Even if this was a loan connected to an employment and even if the P11D were correct, why was the "discharge" not taxable under section 188? After all, if you had a loan from an employer which that employer wrote off, you have a very valuable benefit. That is recognised and taxed by the tax statutes.

In my opinion (others do not agree) a better position is reached if the loan did not exist - ever - which again means that the P11D is an unreliable document upon which to base a defence.

[webberg]

One day there will be a conclusion to all this..... maybe.

It seems this loan charge battle between the HMRC and the end user, Scammers and end user has no definitive answers.

Where is that head blown up emoji, enter here:

You are correct, there are few definitive answers.

All you can do is educate yourself as to the facts that are real and go from there.

Part of that is to be clear between

Money paid to you, claimed to be a loan, that HMRC believe is income and which they say is taxable in the year you received it. For want of a better phrase - disguised remuneration.

Loans claimed to be outstanding and which HMRC say is liable to tax under the loan charge rules.

Subsequent claimed events relating to the alleged loan that may have tax consequences.

How to deal with the alleged outstanding loan.

There is a very easy fix to all this.

Parliament decides that payments claimed to be loans and which meet a tax definition, are taxable (question mark over which party is liable) and as such the normal law on loans is not applicable as they are not, in any real sense, loans. Therefore all routes to repayment of the loan via UK law are void.

Why not include that in the next HMRC settlement position (concerning which I think hopes are fading that it will offer the sort of terms and conditions required to secure mass participation).

[Superfly]

HMRC would ask you what proof you had that the loan had been discharged.

A debit to your bank account would be incontrovertible evidence - I have never seen that.

Instead you have a mechanism that claims something like:

Money was earned by the promoter who passed 70% of it to a trust.

You are a beneficiary of the trust.

The trust loaned this money to you until the end of the tax year.

The trust then decided that as your interest in the trust assets was equal to your liability under the loan, they would net the two down = net position zero.

Unfortunately tax does not work by "netting".

Tax says that the probable answer here is that you had a distribution from the trust (taxable) and used it to repay the loan (not tax relieveable). In essence the trust had converted a set of rights into cash.

Where is that cash?

Can any of the above be evidenced by debits and credits in a bank account?

Even if this was a loan connected to an employment and even if the P11D were correct, why was the "discharge" not taxable under section 188? After all, if you had a loan from an employer which that employer wrote off, you have a very valuable benefit. That is recognised and taxed by the tax statutes.

In my opinion (others do not agree) a better position is reached if the loan did not exist - ever - which again means that the P11D is an unreliable document upon which to base a defence.

The P11D would not be much help in demonstrating to HMRC that these are legitimate loans and therefore are not liable to income tax, so not much use in an enquiry.

But, they could play a role supporting the argument that the loans no longer exist when loan repayment demands are made.

My advice is keep hold of the P11Ds, they might not help in taxation law when dealing with HMRC but they would be useful in corporate law helping to buttress the argument that the loans no longer exist.

[H20]

Well I'm not a tax specialist so couldn't answer that.

However, just thinking out loud, if they did that, then my P11D states that it was discharged, It surely cant be 'both ways', as in, if the loan was 'real', then my P11D discharge was real.

Exactly, it cannot work both ways