Edge EBT thread

[Howard Moons Eyes]

APN

Hello - I'm new here and have recieved notice that as an ex-Edge Consultant I will be recieving an Accelerated Payment Notice - i think this is the apn referred to above.
People talk about a group.... can someone let me know details of what this is and how it works and how I can join please?

[johnl]

Settling with HMRC - Options?

I recently received notification from HMRC that APNs will be issued for the tax years 2010 and 2011. I have no idea at this stage how much is involved but I did received a letter previously related to 2010 referring to a sum in the order of £6k - £7k. Based on this figure (which I am not convinced is correct as it seems they have applied a tax rate of 40% to the full amount of the loan rather than applying the relevant tax rates/ bands) the full amount could be between £25k and £30k, a sum of money I simply do not have nor can get hold of.

Has anyone heard of people in this situation, or are in this situation? Also, does anyone know what HMRC's position be with respect to people in this situation? Are they really going to push for bankruptcy if people can not pay??

[whole9yards]

My reading of whole9yards approach was to let the group do the work and then if group successful hmrc would simply refund the APN payments for all scheme members, irrespective of whether inside or outside the group.

Strength in numbers, from what you are saying you really have to be in the group to benefit from the litigation. If you're outside, there are no guarantees and you might have to go to tribunal separately.

I think that's the main point, and not sure it came across strongly in your earlier post. This is relevant to all groups.

There will be plenty of freeloaders like whole9yards so important to address this.

"Freeloader" is probably what I deserve for the poorly worded question, but I'm sure there are many like me who are sitting on the fence currently. All valid points put forward by StrengthInNumbers and the others that responded, but I've been hesitant to join the group because I still have no idea if it's going to result in a smaller or larger bill for me. It's not like these things are "no win no fee"...

Joining a group is a no brainer when the joining fee is 1-2% of the APN value. And at the other extreme, for someone whose group fee is over half their APN, I'm sure they'd just settle. For me, I'm somewhere in between.

I was only with Edge for 2 years and my bill isn't as massive as some of the others. I also have the means to pay - it's not going to send me bankrupt, it just means I'm going to have to wait another couple of years to upgrade my car, or the family not being able to go on a vacation or two.

If I'm able to battle it using what is freely available, then that is my preference. Otherwise, bang for buck logic applies.

My other concern is that there are two different groups - I've seen both proposals, but until I pay the joining feee, how the hell do I know which group has the better chance!? Why couldn't the groups agree to band together anyway?

Back in early 2014, I joined Saleos group, but I believe this matter is being handled by some other group now.

I'm not sure if there's a miscommunication of some sort here, but it doesn't inspire confidence!

Was the amount on the APN the same as that was previously requested?

In my case it was exactly the amount previously requested for my two years in question. I asked for a recalc over the phone - the APN team had no idea, but they directed my to counter avoidance team. I asked them to provide a breakdown on how they've calculated the figure, but they wouldn't budge - they wanted me to provide them with a total from my bank statements first. I don't think I'll be doing that without seeking further advice (free or otherwise). And that's where I'm at now, contemplating the group or going it alone.

[webberg]

HMRC have 12 months to open an inquiry unless:

1) New information comes to light

2) There is careless action by the tax payer

3) There is deliberate action by the tax payer


So, we're all agreed that if we submitted a tax return with a scheme number then there is no new information.

Is joining a scheme a 'careless' action? No.

Is joining a scheme a 'deliberate' action? Errr... HMRC might see it that way.

But... although we have no settled case for our EBT scheme, there must be legal precedent for whether joining a DOTAS scheme is classed as 'deliberate'. There must already be case law for this.

These threads are full of debates on time limits and what HMRC think they can do and what they can actually do.

Much as I'd like to think your summary is the last word, I think unfortunately it's not.

Playing devil's advocate, based on my experience with them:

1. New information does not need to come to light. It is sometimes enough that a new HMRC officer has a different view of the situation

2. careless really means "knew it was taxable but missed it off a return in error". For a contractor scheme this is unlikely

3. This is where HMRC think you are. They think you knew tax was avoided and deliberately did not make a full disclosure. Worse, they think that you may have deliberately concealed information. That is more of a problem for post April 2009 but has an equivalent prior to that.

A return with an SRN (DOTAS number) may be enough to escape "concealed" but not enough to prevent Discovery.

A discovery can be made up to 4 years after the end of year of assessment. Sometimes HMRC claim this is 6 years due to deliberate action.

There are no cases on DOTAS as yet. DOTAS rules were meant to be HMRC's early warning system so that they could review schemes and take action. Unfortunately the "action" was usually "we don't like this and will challenge it" No law, no case precedent, no nothing.

As I said this is a difficult and deep subject - take nothing for granted

[webberg]

"Freeloader" is probably what I deserve for the poorly worded question......

I'm going to add my input to this as it touches upon BIG GROUP.

Looking at APN's first.

The ONLY group action on these is for a JR. If you are a named party in the action, you can apply for an injunction to prevent HMRC collecting the tax. HMRC is apparently only bound by the injunction in hardship cases but anecdotally it seems that they are not collecting. Be warned though that best evidence is that penalty will apply from the original due date.

All other actions on APN (making reps etc) are individual ones.

Looking at settling the substantive tax liability question.

There are three routes.

1. Accept a settlement offer. Once you've done that, your liability is fixed. Just yours. The terms you get are personal to you. In practice, an offer is usually on the same terms to all who want it. HMRC also has a DUTY to apply the same terms to all unless one of the following applies.

2. A settlement Deed is agreed. This is a confidential and personal agreement between YOU and HMRC. It may be "better" or "worse" than the general offer depending upon circumstances. These can be negotiated individually or as part of a group. Where a group reaches an agreed position it applies to all members of that group who CHOOSE to accept it. Being in such a group does NOT oblige you to accept whatever terms are agreed. These terms are not generally available to non members. In some cases, HMRC may agree that others can benefit from them but those others would have to a) know the terms agreed and b) establish a legitimate expectation.

3. Litigate. Once a judge has made a decision, anybody who has not settled under 1 or 2 is bound by that decision.

There are some other rules and HMRC discretions around but the above is a summary.

So a group negotiation to an agreed figure may be better or worse than either a general offer or a litigation result. Once reached however the contract you sign is with HMRC and in general terms outside your normal returns and tax affairs. in that way HMRC can claim that no legitimate expectation has been arrived at.

Hope this helps.

As I said these are deep waters and I'd advise you to speak with a professional about YOUR circumstances.

[IPMAN]

Have received letter today requesting that I phone in and discuss settlement.

Need to get home and read all 7sides of the letter ...

not looking forward to that. demands received previously go into 200k + icrc (must be a mistake as I didn't even earn that much in any given year).

Not really sure what to do or where to go from here. I'm not member of any group so would appreciate any advice.

Thanks :-/

[webberg]

Have received letter today requesting that I phone in and discuss settlement.

Need to get home and read all 7sides of the letter ...

not looking forward to that. demands received previously go into 200k + icrc (must be a mistake as I didn't even earn that much in any given year).

Not really sure what to do or where to go from here. I'm not member of any group so would appreciate any advice.

Thanks :-/

Get professional advice quickly.

PM and I'll see what can be done.

[gettingangry]

These threads are full of debates on time limits and what HMRC think they can do and what they can actually do.

Much as I'd like to think your summary is the last word, I think unfortunately it's not.

Playing devil's advocate, based on my experience with them:

1. New information does not need to come to light. It is sometimes enough that a new HMRC officer has a different view of the situation

2. careless really means "knew it was taxable but missed it off a return in error". For a contractor scheme this is unlikely

3. This is where HMRC think you are. They think you knew tax was avoided and deliberately did not make a full disclosure. Worse, they think that you may have deliberately concealed information. That is more of a problem for post April 2009 but has an equivalent prior to that.

A return with an SRN (DOTAS number) may be enough to escape "concealed" but not enough to prevent Discovery.

A discovery can be made up to 4 years after the end of year of assessment. Sometimes HMRC claim this is 6 years due to deliberate action.

There are no cases on DOTAS as yet. DOTAS rules were meant to be HMRC's early warning system so that they could review schemes and take action. Unfortunately the "action" was usually "we don't like this and will challenge it" No law, no case precedent, no nothing.

As I said this is a difficult and deep subject - take nothing for granted

Quote from HMRC website - So a change of opinion on information that has previously been made available to HMRC is not grounds for a discovery.

[Tweedle]

Hi Tweedle, are you able to tell us what your tax advisor said, or tell us who it is?

I don't think it's allowed to name names on the forum, but my hope is around enquiry time limits.
PM me if you want details.

[webberg]

Quote from HMRC website - So a change of opinion on information that has previously been made available to HMRC is not grounds for a discovery.

Pity then that the opposite argument has been made in Court and accepted.