GAAR Pooling notices - Remuneration Trusts

[webberg]

Hi Webberg,

I assume anyone who gets a pooling notice is highly likely to also get a counteraction notice & APN.

As the APN can't be challenged, are there any real defences to the process (short if a JR)?

Thanks

Correct that an APN is difficult to challenge - there have been many cases in the Courts and aside from HMRC being told to follow their own rules, none have made much difference.

A GAAR pooling and counteraction notice can be challenged but not appealed. Usually HMRC will make amendments to assessments etc as part of the process and those can be appealed. If they arrive with an APN, you have to look to a different way of having the GAAR notices set aside.

That will begin with exchanges of views and will almost inevitably end in some form of litigation as Mr Reasonable packed his bags and left HMRC some time ago.

[AC0]

Thanks Graham,

It seems there's very little that can be done then since litigation will be super expensive once you factor in appeals etc

Depressing.

[webberg]

Thanks Graham,

It seems there's very little that can be done then since litigation will be super expensive once you factor in appeals etc

Depressing.

Well bearing in mind that there are at least three litigations under way and many more waiting for dates in Tribunal, including ours, you could do worse than explore what those groups are doing.

[AC0]

I'm aware of some of the ongoing litigation, but didn't think anything short of a JR + injunction can stop HMRC from enforcing an APN.

My understanding of the likely process is :
1) APN issued
2) We make 'representations' to HMRC (since there's no right of appeal)
3) HMRC reject the representations (or tweak and re-issue the APN), and if you don't pay, throw in a CCJ for good measure.
4) The only option open is applying for a JR + injunction

Can you please help me understand where litigation fits into this scenario? Does WTTs litigation already involve JRs that will cover the impending renumeration trust APNs?

Thanks again

[webberg]

I'm aware of some of the ongoing litigation, but didn't think anything short of a JR + injunction can stop HMRC from enforcing an APN.

My understanding of the likely process is :
1) APN issued
2) We make 'representations' to HMRC (since there's no right of appeal)
3) HMRC reject the representations (or tweak and re-issue the APN), and if you don't pay, throw in a CCJ for good measure.
4) The only option open is applying for a JR + injunction

Can you please help me understand where litigation fits into this scenario? Does WTTs litigation already involve JRs that will cover the impending renumeration trust APNs?

Thanks again

You are straying off topic here but I'll go along with it one time.

Your process description is correct aside from the "throw in a CCJ" point. That is not inevitable and with proper management will not happen.

There have been many JRs against APNs and whilst I know that there is at least one more outstanding, to the best of my knowledge none of them have succeeded in preventing a validly issued APN from being pursued.

Some APNs were issued and withdrawn because they failed to meet one or more of the conditions, but in the overall scheme of things, these were a small element of the total population.

Our litigation, as with all other tax litigation being executed at the moment, is NOT going to a Judicial Review. That is a legal process that considers the decisions made by a public body and whether they are reasonable. Our litigation - and all others - are questioning whether HMRC has interpreted the tax legislation correctly. Very different legal concepts.

JR does have a part to play, but later.

If your question is really "Will litigation against HMRC prevent them from collecting the APN?" the answer is "no".

If you want a litigation to delay an APN, then there is at least one still running and yet to be heard.

I'm afraid that we have never seen the purpose in spending several hundreds or thousands of pounds in a legal action to create a delay in agreeing payment terms.

If you fear the APN because of inability to pay, HMRC has been in the past insisting upon a maximum 24 month time to pay. They may be looking at that policy to extend it - who knows?

If you are unable to pay an APN within whatever time to pay can be agreed, then HMRC does have powers to apply to a Court to seek some form of insolvency order. It's a lot less common than you think.

Usually a magistrate faced with a taxpayer who has made a reasonable offer and HMRC who - if insolvency is granted - will collect just a fraction of the amount, will favour the taxpayer. Insolvency is a permanent answer to a temporary problem and worse, perhaps a problem that does not exist if the tax is found to be not due. Magistrates have shown themselves to be reluctant to take steps.

No guarantee of course and every case is different.

But attention has swung to the remuneration trust schemes (partly I suspect because of the names behind them) and management of the APN is required before the litigation processes against the actual liability (or not) will take effect.

[AC0]

Thanks for taking the time to explain this Graham, I really appreciate it.

There's no way I can pay what HMRC are likely to demand but for now I guess I just wait.

[Saleos]

The GAAR panel decision alluded to above is here: https://assets.publishing.service.go...ndividuals.pdf

Looks very much like a variation of the PBW scheme that is older than the hills.

The idea that this could be successfully litigated, whilst ignoring the risk of a 60% penalty (if entered into after 15.9.20) for failing to take corrective action required by a counter action notice, or tax geared penalties for deliberate conduct, is for the birds.

If you are in receipt of a GAAR Counteraction notice ensure that you take proper advice.

[webberg]

"It is also worth pointing out that so far, known earlier uses of similar schemes have not attracted pooling notices. That may be because the use of GAAR is limited to schemes current after July 2013 and the penalty provisions only from 2016".


Hi Webberg, have you seen GAAR applied to any pre-2013 schemes?

No - and I'm not expecting to given the fact that the rules were not around pre 2013.