Edge EBT thread

[cerner]

I'm not trying to be critical here but posts like this REALLY are not helpful! I appreciate that we are in a stressful position right now but "speculating" on what path a tribunal may or may not take and what conclusions a judge may or may not draw is pure speculation and nothing else! There are people on this forum who are extremely stressed and anxious about these demands and this type of "scare mongering" from individuals who are frankly amateurs who fancy themselves to be "tax specialists" is truly not helpful! Unless you are a qualified and experienced tax professional, i do not believe you have any place commenting on what will and will not happen in this matter. Simply put.......you have no idea do you?

Besides, what you have stated above is factually incorrect! I for one do have copies of my loan agreement which clearly states the terms of the loan. Malvolio is correct in saying the loans were granted form the trust and the trustees. Furthermore, your explanation surrounding what Edge should have done re the repayment of the loans shows a clear lack of understanding of EBT's and how trusts work in general. Trust law and rules are complicated and it is not as "simple" as you have suggested.

If people want to be helpful and contribute information that benefits the group, please consider whether what you are posting is factually correct before posting it. This kind of speculation does not help!

Agreed that i'm not a tax expert and everyone is free to pursue this case however they feel. I'm just stating my own point of view. At the end of the day lawyers cannot turn water into wine. They can only work with documentary evidence you provide them if you don't have documentary evidence to support your case that it's a loan then lawyers cannot help you and they will not admit it bcoz at the end of the day they want your money.

Make no mistake about it, the lawyers will have you believe that they can turn water into wine.

It was a long time ago and I can't remember if I have my loan agreement terms or not and If I have I probably misplaced it. And in any case loan agreement terms documentary evidence alone without a clear repayment structure is not going to help you. it must also have a clear repayment structures with demand for repayment like any other types of loan. Again I don't have to be a tax expert to see this. it's not rocket science. While I don't know the inner working of EBT loan and trustees etc.. you can dress it all up whatever way you like at the end of the day it's a damn loan and it needs to align itself with other types of loans like mortgages credit cards etc.. before HMRC will recognize it as loan. That's a fact weather you agree with that or not.

If you can supply HMRC documentary evidence that the loan provider has demanded repayment back. HMRC will back off your case. That is also a fact weather you agree or not. You don't need to be a tax expert to state this fact, it's simply common sense.

The scenario of a virtual court I've painted is a common sense of questions the Judge will ask of each side in this dispute. it's not complicated at all.


My post is telling people not to panic and you claimed i'm scare mongering.. hmmm make me wonder whose side you're on.

I leave it to other readers to make sense of my argument.

[ScottW]

Agreed that i'm not a tax expert and everyone is free to pursue this case however they feel. I'm just stating my own point of view. At the end of the day lawyers cannot turn water into wine. They can only work with documentary evidence you provide them if you don't have documentary evidence to support your case that it's a loan then lawyers cannot help you and they will not admit it bcoz at the end of the day they want your money.

It was a long time ago and I can't remember if I have my loan agreement terms or not and If I have I probably misplaced it. And in any case loan agreement terms documentary evidence alone without a clear repayment structure is not going to help you. it must also have a clear repayment structures with demand for repayment like any other types of loan. Again I don't have to be a tax expert to see this. it's not rocket science. While I don't know the inner working of EBT loan and trustees etc.. at the end of the day it's a damn loan and it needs to align itself with other types of loans like mortgages credit cards etc.. before HMRC will recognize it as loan. That's a fact weather you agree with that or not.

If you can supply HMRC documentary evidence that the loan provider has demanded repayment back. HMRC will back off your case. That is also a fact weather you agree or not. You don't need to be a tax expert to state this fact, it's simply common sense.

The scenario of a virtual court I've painted is a common sense of questions the Judge will ask of each side in this dispute. it's not complicated at all.


I leave it to other readers to make sense of my argument.

That's great news, glad you've managed to fix this for us all.

Are you going to tell HMRC or will I?

[sl4]

Loan Agreement

I've have just re-read my loan agreement, its seems pretty good with no glaring omissions.

I actually misplaced it a while back but after a quick call to Michelle, she was able to produce a copy very quickly - she has them all scanned in PDF format dating back from when you signed them.

Regarding a repayment schedule, the loan agreement details this clearly in its terms. Have a read.

[LisaContractorUmbrella]

IANAL but from what I have read on current case law surrounding loan arrangements the Judge will look at what happens in reality as well as the contractual arrangements to see whether or not the contract is actually a 'sham'. In the case of Phillip Boyle v HMRC which was published recently the judge decided that the 'loan' was in fact employment income and therefore subject to income tax - part of his reasoning was that 'the loans were in substance and reality income from his employment bearing in mind, in particular, that Mr Boyle had no need for a loan'.

HTH

[Saleos]

[QUOTE=cerner;1856543]

"If you can supply HMRC documentary evidence that the loan provider has demanded repayment back. HMRC will back off your case. That is also a fact weather you agree or not. You don't need to be a tax expert to state this fact, it's simply common sense".

FHP143 I am a tax "expert", at least in that I am a Chartered Tax Advisor of 20 + years experience well versed in these types of arrangement, and I am afraid that whilst your comment may be common sense I am afraid that a simple demand for repayment from the lender will not see HMRC back off your case. Or anyone else's. I am afraid as with all these things the issues are more complex than that. Although no doubt you'd expect me to say nothing else given your view that lawyers (though I am not one) simply want your money.

In reality HMRC look at these issues in the round; collating evidence from trustees, employer and borrower to paint a picture. They start with the preconception that loans are not loans at all and the more that can be done to prove otherwise the better but belated, and unfulfilled, requests for repayment some years down the line are likely to be met with little more than weary scepticism. Better to be able to produce voluminous emails, minutes, loan agreements and correspondence all supporting the nature of the payment as a loan throughout implementation and since and, if necessary, professional and credible witnesses (trustee and borrower) to persuade the Tribunal of the genuine nature of the loans. The success of that can be seen in cases such as Dextra, Sempra, Glasgow Rangers & Scotts Atlantic (even if the last two were perhaps surprising) compared to the shambles that was Boyle.

[kmpm]

I am interested in saleos and other proposals for joining up

[fizzy]

So we all pay our loans back and edge have loads of our money in the bank then what?

Guys, guys, guys!!

lets not panic about this case, the most important thing is meeting the deadline to submit an appeal. I almost miss the appeal deadline as I was away abroad on holiday for few weeks and got lucky to put it in 2 days before deadline day. Phew!!


If you managed to put the appeal in before the deadline then everything else is pretty simple, well from my stand point anyway.


So now lets see,

one or two people mentioned in this thread how HMRC will view your case if you start making voluntary monthly/yearly instalment payments to the loan provider(edge consulting).
While it seems a good idea voluntary repayments will NOT carry as much weight as being forced by the loan company to make repayments and with consequences if you fail to make your loan repayment obligations.

A tax lawyer said in this thread that the EBT-Loan employee benefit arrangement is solid and fool proof on paper but it's shamble implementation by the EBT-Loan agencies/companies like Edge is what is causing the problem.
I actually agree with this Judgement and I'll tell you why in a minute.

In a nutshell, this case is about two sides squabbling about weather a payment is a loan or an income.
We the contractors are claiming it's a loan, HMRC are saying "Oh no it's not, it's a taxable income"


So let's create a virtual court room here to see what happens:

So we arrive in front of a tribunal judge to hear our case and the Judge ask HMRC to explain the reason behind their thinking that the payment is a taxable income. You don't have to be a psychic to guess reply of HMRC.
HMRC will say "well, we have an individual here who claimed a payment he has received is a loan but CANNOT supply documents to support the loan agreement and repayment terms which is the hallmarks of all other loans like mortgages and credit cards etc.. furthermore in the years since the payment has been made to the individual, not a penny has been paid back to the loan provider nor has the loan provider initiated a process for the loan repayment."

So the Judge will say "hmm... very interesting, How about you the contractor. Do you have any documentary evidence to back your claim that the payment is a loan?"
At this point the contractor will probably scratching his chin and looking to the sky.(The contractor has no leg to stand on, he is a sitting duck in front of the tribunal judge)
Some of us with a bit of imagination might reply to the Judge and say "When I took out the loan the loan provider(Edge Consulting) made it clear that, they reserve the right to re-call the loan and request repayment at any time in the future or at any time of their chosen but this hasn't yet happened"

The Tribunal Judge might want to call in a representative of Edge consulting to appear in court as a witness in this case for interrogation.(We all know this cannot happen as Edge consulting seems to have dissapeared from the surface of the earth or re-branded itself as new company, this is probably not good for our case)
Let me tell you this, even if the contractors side paid a lawyer 100 Billion pounds to represent us, If we cannot provide documentary evidence in court to prove to the Judge that it's a loan then the contractor side will lose the case despite hiring an expensive lawyer.

So you may ask, what type of documentary evidence do the contractor side need to prove to the Judge it's a loan. The hint is in the reply of HMRC to the Judge in the virtual court enactment discussed above.

Documentary evidence we need to take to tribunal court.
1. A loan agreement and terms documentary evidence from the Loan provider(Edge)
2. A letter from the loan provider(Edge) adressed to each contractor requesting loan repayment commence immediately in monthly/yearly installments or single full payment and spelling out the consequences of failure to comply.

This is why I believe that Edge consulting made mess of the EBT-loan scheme by not clearly stating the terms of the loan agreement in line with other types of loans. Now they've gotten cold feet and dissapeared.
If we can get the 2 items listed above then I'm certain we have a great chance of winning this case without need for a lawyer and there is even a possibility of HMRC backing off the case and not bothering to take it to court.

When I was sold this EBT-Loan scheme by Edge a few years back, they claimed it was legal and approved by HMRC. Now with HMRC hot on the heels of contractors using this scheme, Edge consulting fearing backlash of writ and to avoid being sued by contractors have decided to pack it in and shut up shop. or have they? they might have genuinely just changed their phone numbers or re-branded for other reasons not related to this case.

But it's not too late for Edge consulting to correct their mistake. They just need to supply us with the 2 items listed above as documentary evidence we can take to tribunal with us then all will be Ok. Item 2 being the most important.



The conclusion:

While Edge appeared to be no more we can contact Michelle Booth to help us get hold of an appointed Edge representative in care of their estate to provide us the 2 items listed above and the letter requesting repayment of the loan in monthly or yearly instatements with minimum of just £1 a year repayment to help us who can't afford to repay the loan in single full repayment. The Letter should also state how much loan is due to be repaid and the consequence of failure to repay.

While I don't know the fully details of the rangers case but somehow he was able to convince the Judge that actually the payment was a loan and won. I'm sure the evidence he supplied to back his case will have loan repayment terms as and or request for repayment documentary evidence at the heart of his defence.

Please feel free to reply back with your thoughts. But be careful in your reply as without doubt HMRC read this post and any admission of guilt on your part will no doubt be used as evidence against you in the tribunal
I for one wholly believe the payment I received from Edge to be a loan and expected to pay it back fully to the loan provider even if I can only afford £1 a year repayment that will take many many years to be fully re-paid.

[Saleos]

Please PM me your email address kmpm.

I am interested in saleos and other proposals for joining up

[FHP143]

[QUOTE=Saleos;1856563]

"If you can supply HMRC documentary evidence that the loan provider has demanded repayment back. HMRC will back off your case. That is also a fact weather you agree or not. You don't need to be a tax expert to state this fact, it's simply common sense".

FHP143 I am a tax "expert", at least in that I am a Chartered Tax Advisor of 20 + years experience well versed in these types of arrangement, and I am afraid that whilst your comment may be common sense I am afraid that a simple demand for repayment from the lender will not see HMRC back off your case. Or anyone else's. I am afraid as with all these things the issues are more complex than that. Although no doubt you'd expect me to say nothing else given your view that lawyers (though I am not one) simply want your money.

In reality HMRC look at these issues in the round; collating evidence from trustees, employer and borrower to paint a picture. They start with the preconception that loans are not loans at all and the more that can be done to prove otherwise the better but belated, and unfulfilled, requests for repayment some years down the line are likely to be met with little more than weary scepticism. Better to be able to produce voluminous emails, minutes, loan agreements and correspondence all supporting the nature of the payment as a loan throughout implementation and since and, if necessary, professional and credible witnesses (trustee and borrower) to persuade the Tribunal of the genuine nature of the loans. The success of that can be seen in cases such as Dextra, Sempra, Glasgow Rangers & Scotts Atlantic (even if the last two were perhaps surprising) compared to the shambles that was Boyle.

Hi Saleos,

I've found you advice and comments on the forum very helpful, thank you. I'm not suggesting that a loan document would simply dismiss HMRC's case. On the contrary, I appreciate how complex this matter is and how many different factors there are at play that can effect the ultimate outcome. With limited knowledge, understanding and information however people are posting on this forum what they believe to be fact which often is not. Your comments and views have been echoed by the tax barrister I am working with which is very encouraging so thank you for your input. Highly valued and much appreciated!

[cojak]

Thanks GoneSouth - as it is a company number I'll allow it back up.

What a very strange situation, however.

Ah, not so strange now I see it...

http://forums.contractoruk.com/busin...-redstone.html