Contractors who used Employee Beneficiary Trusts are in HMRC's sights

Re: Don't you have a Statute of Limitations law there?

No.

The thing here is that HMRC can simply say they "intend to look into your tax return" (they have one year from you filing it to do that). They do that fairly routinely, generally just before the cut-off date, in order to protect their position.

From that point on, it's completely open ended. The taxman is not bound by any deadlines (you'll understand in a minute why this is a problem)

What happened in a a lot of these EBT cases, the taxman sent an "inquity letter", then did NOTHING (no requests, no letters - litterally sat on their hands) for 10 years (and in doing so, conveyed that they took no issue with these "contractor schemes")

The following website has some interesting first-hand stories of guys caught in this mess (one is mine)

https://www.dotas-scandal.org/testimonies/

The retrospective legislation that the article talks about was, many suspect, largely brought about to cover up the taxman's inaction in closing up the tax loopholes that made these schemes prosper in the first place.

In theory, what they demand here is merely a "payment on account" that they have to repay you if and when your scheme is proven to work by the courts. Yet this "payment" can be massive and mean bankruptcy for many.

What HMRC are counting on is that most will never see their day in court, since a lot of the companies that provided these structures 5-10 years ago have now closed shop.

Look up tax law in the US

The IRS can go back an unlimited number of years for tax evasion. They can only go back seven years for mistakes/corrections or whatever, but if you aren't paying your taxes or are doing something illegal to reduce the amount of taxes you owe, they could go back 50 years if they wish.

An interest free "loan" that you never had any intention of paying is so utterly clearly a scam I can't believe the author of this article was defending it.

Re: Rangers Football Club

Phil, you are missing the point that it doesn't matter what "the Gibraltar scheme is (or rather was) doing".

HMRC doesn't even look at that. All they look at is that the guy has, in all honesty, declared membership in a structure they deem to be "tax avoidance" (regardless of whether this was a primary motive to join).

The specifics of the scheme are not even taken into consideration when HMRC sends out an "Accelerated Payment Notice" retrospectively ("retrospective advance payment"...an oxymoron if there was ever one!).

Oh, and about Rangers... HMRC lost twice already, and the case has just been heard again in Court of Appeal a couple weeks back. They're expected to lose for the 3rd time.

What you have to understand is that EBT were a very common remuneration structure 10 years ago, and there isn't anything particularly "dodgy" about them. Most commenters here are judging a reality of 2005 with eyes of 2015, which doesn't make sense.

Re: Rangers Football Club

They won at the upper tax tier but it's still ongoing in the higher courts. It's an important case for HMRC. They'll go all the way to the supreme court.

Re: Fair share?

Allowing a company to loan people money and consider the amount loaned as an "expense" against taxes was the loophole. If it was truly a loan, at arms length and therefore intended to be paid back, then it was a loophole that may have had a purpose. Allowing a "loan" that was not arms length and not truly a loan since there was never any intention whatsoever to ever pay it back was not "using a loophole" it was a tax evasion scam, nothing more.

You are trying to change the issue by complaining "what is a fair share"? A fair share is what you would have owed if you used this loophole as intended, and actually paid back the loan at some point. Given that you did not, your fair share is what you would have owed if this loophole did not exist at all.

Re: Interesting Variation on Loan "scheme"

How many listed companies for example have NEVER used tax planning? It's been part of our corporate culture for many years. It's good that the government are making it clear that these tactics are not acceptable but at the time they were. So many large companies have avoided paying billions by clever tax planning and secret deals with HMRC. Private Eye has pages of journalism every fortnight on this topic.

Re: Interesting Variation on Loan "scheme"

I once read a story (long time ago) about a company paying a large part of the salary in sovereign coins, which are in fact legal tender. So they handed over ten pound sovereign coins, which you could buy for £174 and sell for £162 each with a quick web search, and paid taxes etc. for £10. And then that loop hole was closed.