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Category: UK Tax
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Hi, I worked as an employee with Sanzar Solutions during 2010-2011

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Hi, I worked as an employee with Sanzar Solutions during 2010-2011 tax year. An accountant recomended by Sanzar file my self assessment tax returns using the SRN number specified and details supplied on P11D and P60 from Sanzar. Now, I got a letter from HMRC asking (1) How much loan amount was paid by Sanzar (2) How much of it has been repaid and when. I know the answer to both.. For 1, I know the total amount around 23k as loan and £8k under PAYE, and for (2) the answer is no. Because as the contract on loan does not require the loan to be paid immediately. Also I noticed that the loan is discahrged on 05.04.11 onn P11d . What is the implications on this please ?

How to reply to HMRC?

MamaTax :

Hi Thanks for posting the question. Should you find the answer below incomplete or you are not fully answered, please drop a reply before rating.

MamaTax :

As you may have read on various tax forums or internet – Sanzar closed shop. Im told one of the reasons for shutting down is the “loan” schemes they were offering. With a couple court ruling in favour of HMRC in the past few years, HMRC have ben continuously monitoring people who had been using different off-shore schemes like Sanzar.

I understand the scheme worked like this- only a small proportion of your income was taxed as salary and the bulk of it was treated as a loan which was never repaid to Sanzar. The loan only appeared on the P11D. Now HMRC would want to tax this loan as this was essentially your income misclassified as a loan.

Similar rules apply to say to a director who has taken a loan from a business and the loan account is overdrawn, the director is taxed if the loan is not repaid as this is taken as disguised loan yet its essentially a salary.

My advice is to provide HMRC with as much of the information and to be forthcoming with information and see what they intend to do. IF they ask you to pay you may be entitled to raise a complaint on why HRMC had not raised this earlier.



If you are unable to resolve your concerns, then you should make a complaint to a complaints handler. HMRC accepts complaints by telephone or in writing but its better to put this in writing so that there is an audit trail.

MamaTax :

Alternatively if you don't want the headaches of dealing with HMRC, find a tax expert who is experienced in dealing with HMRC investigations and he will charge minimum £200 to act on your behalf. But this will not likely remove the liability.

MamaTax :

You can easily get a local tax expert near your area by posting your request of sites like HERE and HERE.

MamaTax :

Hope this helps. Let me know if you have any further queries.

MamaTax :

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Customer: replied 3 years ago.



Thanks for your reply. I feel that you reply is more general than my specific question. For example I am not a director and worked as an employee.


I was informed that I do not need to repay the loan.


Further I noticed on my tax return (submitted by accountant, I believe he also work for Sanzar Solutions) additional Information was provided as follows;



Additional Information

SA101, AI4, AOF20-any other information space


Additional Information

Tax Avoidance Notes: EMPLOYEMENT- Sanzar Solutions

During the 2010/2011 tax year I was an employee participating in a registered tax avoidance scheme.



I noticed on my P11D, loan was discharged on 05.04.2011.



Please advice me whether I can reply to HMRC on the basis of information provided on Tax return and P11d as follows,


Dear Sir


I worked as an employee and received £23,000 as loan. No expenses were reimbursed.


I was informed that I do not need to repay the loan as it is under registered tax avoidance scheme (please refer my tax return 2010-11) and loan was discharged on 05.04.2011 (please refer my P11d-2010-11)


Hope this satisfies your queries.


Yours faithully

Please advice whether I can sent a reply to HMRC as above.


Many thanks
















Thanks for the reply.

Im sorry if my answer sounded general but the scheme worked the same as I have dealt with several people being approached by HMRC who had used the scheme ie income earned by a UK contractor was paid through a low fixed-salary and the bulk of it paid out as a loan through the Employee Benefit Trust from Sanzar Solutions. HMRC would see this as disguised salary and an attempt to reduce your tax in this way and hence would want to tax you the loans as salary under taxable income, or under long-stand standing anti-avoidance rules even though you reported the loans on PIID forms as benefit in kind. Hence the reasons HMRC is issuing these letters (you are not alone) to all people who used the schemes trying to find out how much the loan was and what was repaid. In almost all the cases - the loans were written off and that there was no intention for the loan to be repaid by the contractors, which is why HMRC think this was not a “loan” but a disguised salary/income. I did say that this is the same principle that would normally apply to directors but I didn’t mean that you are a director.

Course of Action to Take

I agree that you should write HMRC detailing how much of the money was a loan and how much was not repaid. I agree with your wording of the letter and I think you should reply to their enquiry ASAP. I would expect HMRC to come back to you with an assessment charging tax on the loan as explained above. You have the option to accept the assessment ie agree to pay the tax, or, lodge an appeal against this within 30 days from the issue date. Should your appeal be unsuccessful, and that tax is found to be payable, a surcharge of 5% will be levied on top of the tax due. This is on top of the interest charged on late paid tax. HMRC can ask for records going back four years in but in rare cases they have the right to look up to twenty years.


Im sorry to be so negative but my comments are from the experience of dealing with many people who have used this scheme before. With hindsight I would suggest that before paying any money out for any “tax efficient scheme”, you should have asked from the scheme provider for its HMRC Approved Scheme reference number or check with HMRC whether the scheme is approved to avoid all the hassles that you may be facing.

Customer: replied 3 years ago.
Thank you very much for giving more details.
Please explain what (if any) are the basis to reduce the penalty and or making complaint against HMRC as you mentioned in earlier reply.

Many thanks

Thanks for the reply.

Im afraid there is much leeway for a basis of an appeal.

However my suggestion is to get tax investigation expert review your case. They wont charge a fee unless they see the potential for a solution. You can use sites like HERE where you post your request for free and local experts contact you directly – whether by phone or meetings with their offers of solutions. Hope this helps.

Let me know if you have any further queries. I will wait for a further few more minutes to answer your questions. If im logged out please feel free to post your further questions and I will answer them when im back online. If you are happy please rate before you go.

Customer: replied 3 years ago.
Thanks for your reply. If I give the employment contract (8 page)my tax return & P11d and one page letter detailing the loan payment from Sanzer, can you deal with fix fee or can you recommend someone who can deal for fixed fee? Thanks
Unfortunately we are not allowed to take anywork outside this forum. However the link above can be your starting point.
Customer: replied 3 years ago.
Thanks . Which link you are referring to? Also are there any benifit to use the tax expert, if there is no ground for complaints or reduce the tax liability? Please advice?

Here is the link – CLICK HERE . There is limited ground for winning an appeal case. However there is no harm in getting a specialised tax expert review your case in details – looking at the agreements, past returns and what work you were doing etc and see if there is any ground for an appeal- they normally do this for FREE. As said all you need to do is post your requirements on that that site in as much details as possible on the site and you don’t get charged for posting anything and local specialised tax experts contact you directly – whether by phone or meetings with their offers of solutions. Only then if you see the costs vs the benefit you then go ahead with the person you select …but you need to tell him/her that you want to know if you could appeal this and the chances of that being successful before hiring the expert. Hope this helps.

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