What is the Legal Status of Disguised Remuneration Loan Schemes

Waiting for an internal review by HM Revenue and Customs of their handling of this request.

Dear HM Revenue and Customs,

In a letter dated July 2018 it states the following:

"DR Schemes are artificial arrangements that pay a carefully calculated amount through the payroll; just enough to give enough to give the employee entitlement to state pension credits, and make full use of their personal allowance so that little, or no, tax is paid. Most of their income is paid in the form of loans, often routed through an offshore trust. Loans are not taxable, but these are loans in name only. They are usually given interest free and allegedly repayable on demand, but there is no intention to repay them and they are not repaid. HMRC has proven in court that they are taxable as earnings, but no income tax and NICs were paid at the time"

Please can you answer these questions to enable my full understanding of the legal status of such schemes:
1) Please can you provide a full list of schemes that you are aware of and if at anytime they were considered by HMRC legal representatives to be
1a) Legal under UK LAW (i.e not illegal)
1b) Illegal under UK LAW
1c) Are still legal under UK LAW as of the date of this request
1d) Have since been made illegal under UK LAW as of <given date>

Yours faithfully,

Stephen A Smith

foi.team@hmrc.gsi.gov.uk on behalf of FOI Central Team, HM Revenue and Customs

Our ref: FOI2018/01672

Dear Stephen Smith,

Freedom of Information Act 2000 Acknowledgement

Thank you for your communication of 1st August which has been passed to
HMRC's Freedom of Information Team.

We have allocated the above reference which you should quote if you need
to contact us.

The Team will arrange for a reply to be sent to you which will either
comply with HMRC's obligations under Freedom of Information Act or, if we
think it's an enquiry that we don't need to address under the terms of the
Act, let you know why. If it is the latter we will, if possible, pass it
on to a more appropriate part of the Department for answer.

Yours sincerely

HMRC Freedom of Information Act Team

foi.team@hmrc.gsi.gov.uk on behalf of FOI Central Team, HM Revenue and Customs

1 Attachment

Dear Mr Smith,

I am writing in response to your request for information, received 1
August 2018.

Yours sincerely,

HMRC Freedom of Information Team

Dear HM Revenue and Customs,

Please pass this on to the person who conducts Freedom of Information reviews.

I am writing to request an internal review of HM Revenue and Customs's handling of my FOI request 'What is the Legal Status of Disguised Remuneration Loan Schemes'.

I am disappointed with this response based on two key pieces of information

1) have in my possession an additional letter (Mar2018) from HMRC Counter Avoidance, Ministerial Complaints Division SO483 that states "This does not mean to say that these schemes are illegal"

2) On 3 July 2018 Mel J Stride addressed parliament indicating they were not legal:

Extract from Hansard 3/7/18
Peter Aldous (Waveney) (Con)
To follow on from the question asked by the hon. Member for Eastbourne (Stephen Lloyd), the retrospective nature of the 2019 loan charge could bankrupt thousands of people. Will the Government revise legislation to ensure that that does not happen, with the loan charge only applying to disguised remuneration loans made after the passing of the Finance (No. 2) Act 2017?

Mel Stride
This is not retrospective legislation. The activities and arrangements entered into by those who are in scope of this measure were not legal when they were entered into, even though they may have been entered into in the past. The loan charge is there not to apply penalties for that behaviour, but to ensure that those individuals pay the right amount of tax.

End of extract

With this in mind it is clearly in the public interest know if schemes were legal or not.

A full history of my FOI request and all correspondence is available on the Internet at this address: https://www.whatdotheyknow.com/request/w...

Yours faithfully,

Stephen Smith

foi.team@hmrc.gsi.gov.uk on behalf of FOI Central Team, HM Revenue and Customs

Our ref: IR2018/01948

Dear Mr Smith,

Freedom of Information Act 2000 Acknowledgement

Thank you for your communication of 30th August which has been passed to
HMRC's Freedom of Information Team.

We have allocated the above reference which you should quote if you need
to contact us.

The Team will arrange for a reply to be sent to you which will either
comply with HMRC's obligations under Freedom of Information Act or, if we
think it's an enquiry that we don't need to address under the terms of the
Act, let you know why. If it is the latter we will, if possible, pass it
on to a more appropriate part of the Department for answer.

Yours sincerely

HMRC Freedom of Information Act Team

Dear [email address] on behalf of FOI Central Team,

Please can you explain what the delay is in providing this internal review

Yours sincerely,

Stephen Smith

Dear [email address] on behalf of FOI Central Team,

Complaint about HMRC's FOI avoidance now made to ICO

Yours sincerely,

Stephen Smith

foi.team@hmrc.gsi.gov.uk on behalf of FOI Central Team, HM Revenue and Customs

1 Attachment

Dear Mr Smith

I am writing in response to your request for information, received 30
August 2018.

Yours sincerely,

HMRC Freedom of Information Team

Dear [email address] on behalf of FOI Central Team,

Thank you for your inconclusive response to my ask; I will await the ICO review of this request. Noting their desire for transparency.

Yours sincerely,

Stephen Smith

Dear [email address] on behalf of FOI Central Team,

Noting HMRC FOI Team are refusing to provide information based on the comment

[ I have decided that s.23(1) of the CRCA is satisfied and consequently s.44 of the FOIA is engaged.]

I find it difficult to understand why a government department who work with numbers every day cannot give an answer with numbers - that do no identify individuals

Might I suggest
1) Please can you provide a full list of schemes that you are aware of and if at anytime they were considered by HMRC legal representatives to be

Example answer
HMRC ARE AWARE OF <number of schemes in total> split DOTAS & NON_DOTAS
1a) Legal under UK LAW (i.e not illegal)
<number legal> ... again split dots and non dotas
1b) Illegal under UK LAW
<number illegal> ... again split dots and non dotas
1c) Are still legal under UK LAW as of the date of this request
<number still legal> ... again split dots and non dotas
1d) Have since been made illegal under UK LAW as of <given date>
<Number Made illegal and date> ... again split dots and non dotas

I welcome this breakdown - noting you have the information I expect a quicker response

Yours sincerely,

Stephen Smith

foi.team@hmrc.gsi.gov.uk on behalf of FOI Central Team, HM Revenue and Customs

Our ref: FOI2018/02272

Dear Stephen Smith,

Freedom of Information Act 2000 Acknowledgement

Thank you for your communication of 16th October which has been passed to
HMRC's Freedom of Information Team.

We have allocated the above reference which you should quote if you need
to contact us.

The Team will arrange for a reply to be sent to you which will either
comply with HMRC's obligations under Freedom of Information Act or, if we
think it's an enquiry that we don't need to address under the terms of the
Act, let you know why. If it is the latter we will, if possible, pass it
on to a more appropriate part of the Department for answer.

Yours sincerely

HMRC Freedom of Information Act Team

Dear [email address] on behalf of FOI Central Team,

THIS IS NOW VERY SERIOUS

The Rt Hon Philip Hammond and The Rt Hon Mel J Stride have both indicated that the schemes are illegal without any documented evidence before the House of Lords : without HMRC proving otherwise I can only be lead to being branded a Criminal and therefore cannot work to pay HMRC anything they estimate to be due

It is imperitive that these two individuals are correctly informed as well as the public like myself. If HMRC have failed in there duties then admit to it do not bury it and cause the financial uncertainty of ‘00,000s of people including those families whose have been impacted my way of Mental Health and in sone circumstances SUICIDE.

At the very least STOP THE LOAN CHARGE NOW

Yours sincerely,

Stephen Smith

foi.team@hmrc.gsi.gov.uk on behalf of FOI Central Team, HM Revenue and Customs

1 Attachment

Dear Mr Smith

I am writing in response to your request for information, received 8
November 2018.

Yours sincerely,

HMRC Freedom of Information Team

Dear [email address] on behalf of FOI Central Team,

For the benefit of anybody following the FOI Request. It is currently in the hands of ICO who have been provided all of the relevant links from the House of Lords and Finance Bill 2018 : NC26.

Alternatively you could simply answer the questions in a transparent manner.

Yours sincerely,

Stephen Smith

Dear [email address] on behalf of FOI Central Team,

Still Waiting :

Yours sincerely,

Stephen Smith

Dear [email address] on behalf of FOI Central Team,

I have received the following decision notice from ICO

https://ico.org.uk/media/action-weve-tak...

I welcome the opportunity to determine how this information can be made public without exposing the individuals / schemes per se.

Yours sincerely,

Stephen Smith