BN66 - Round 2 (Court of Appeal)

[MajorGowen]

Not a bad idea - but still too much...

On basis that most contractors who joined schemes such as BN66 were driven away from their PSC’s because of the uncertainty then why NOT settle the current dispute on the following basis.

The weighted average overall tax (tax and NI) paid by contractors (both those passing and failing IR35) operating through a PSC is say 33% (this figure can be calculated much more accurately than my “back of fag packet” calc) i.e. the contractor has an overall net return of 67% after tax/NI/fees etc.

Assuming a contractor’s return through the BN66 scheme was 83% THEN why can’t HMRC accept a tax payment of 83 – 67 = 16% .

Yes there is tax to pay but would you agree to pay this now rather than risk paying a lot more in a few years time.

Hello Alan. Whilst I would love this massive weight to be lifted off my family, I personally think that 16% is too high a price to pay. The ONLY reason I joined the scheme was to lift the uncertainty that IR35 had introduced. I was sold on the scheme (by people such as yourself) as I was told HMRC could only go back one year as this was personal tax. If they did not challenge my tax return within a year then the money was mine. Worst case scenario we were told was that the scheme would be closed down and they would have to think of another one. Nobody told us about disclosure, nor potential back interest charges.

When I compared this to the possible six years operating through a LtdCo then I went for the "safe" option for my family. My first 2 tax returns were not challenged and I paid back the loan money to the scheme operators.

During the third year I found out that the scheme was being investigated, so midway through the financial year I returned to operating through a LtdCo, so did everything in my power to stay "within the tax laws", which proves that I was not operating through the scheme for greed, but for clarity on my tax position - that sounds laughable now.

What happened next was a nightmare to nearly everyone on this forum, and has heaped massive stress on families for around 8 years now.

Now if I had continued operating through a LtdCo I would have paid, at most 25%, so I believe that is the figure we should be starting from (83-75=8%). If we round this up to 10% then that may well be a figure a lot of us would be willing to pay - oh, WITHOUT ANY INTEREST as we all declared what we were doing.

I'm sure that most people on here would be willing to pay that kind of amount just to free their families from the stress, and to provide some certainty moving forward.

The chances of HMRC doing this is zero though as they seem to have a personal vendetta against the users of this scheme.

[MajorGowen]

If only....

I might have a flutter on SOU.

It would be nice to have some spare cash to have a flutter. Good on you if you are able to try and offset any money that HMRC may come after, but some of us do not have the money to attempt this route.

If we lose then it's financial meltdown.

[screwthis]

83% may have been retained but that doesn't mean that 17% tax was paid.

Wasn't about 15% paid to MP as fees and about 3% paid as tax?

If a theoretical settlement was to take place then it would be 97%-X%

[Vallah]

83% may have been retained but that doesn't mean that 17% tax was paid.

Wasn't about 15% paid to MP as fees and about 3% paid as tax?

If a theoretical settlement was to take place then it would be 97%-X%

I think you've just pointed out the rather glaring error in Alan Jones's post.

[Emigre]

83% may have been retained but that doesn't mean that 17% tax was paid.

Wasn't about 15% paid to MP as fees and about 3% paid as tax?

If a theoretical settlement was to take place then it would be 97%-X%

Any talk of a settlement only works if, of course, it is fair, proportionate, and non-aggressive. There is only one level that fits that description - ZERO.

What we did we did openly and honestly in accordance with the law at the time. Demands for payment by HMRC for anything other than zero are therefore unfair, disproportionate and aggressive. They have not described or even tried to describe S58 as a windfall tax but that is exactly what they are trying to achieve.

The behaviour of HMRC and HMT in this whole sorry mess makes me committed to ensuring that I always pay less than the Govt of the day would regard as my fair share of tax. Of course, it will always be done within the law. They set the laws which allow me to operate anyway I choose within that framework. If that happens to be other than the way they intended then they need to go on a course or two in legislation drafting.

There is no space in my opinion for "negotiating" with either of the two departments that have LIED and CHEATED their way to where are now. They deserve no compromise from any of us.

[Vallah]

Well said.

[Overwhelmed]

AJ's suggestion

In my opinion, the only way HMRC would accept anthything less than the full amount would be if they knew that legally they were entitled to nothing. Therefore to make any payment per AJ's suggestion would in effect be a goodwill payment on our behalf.

I'm afraid I don't feel any goodwill at all towards HMRC, so why should I consider making sucha payment? If it is felt important that goodwill be restored, HMRC should be making a payment to us to compensate for the pain they have put us through by pressing an illegal claim- fat chance of that!

[Tax_shouldnt_be_taxing]

Emigre

Every time I see a post from you, your signature reminds me of what this comes down to. Take away all the fluff and what the OECD said defines us. Let's not forget that the OECD fronts up all European governments on tax initiatives and all European countries subscribe to their mission. Yet that quote from Donald Johnson seems to be ignored by those who gave a bastardised birth to BN66.

Everything else aside, it's that word again - TRANSPARENCY. Thanks Emigre for the reminder.

It seems to be somewhat unjust that those who practice the opposite appear to get a more considerate take.

[DonkeyRhubarb]

Even if HMRC were willing to listen, we'd never be able to agree a proposal.

I talk to a lot of people in varying circumstances with different views on this.

Some would settle for just striking out the interest. Others would want a substantial concession on the tax. Some would only be willing to pay a token amount. Many are not willing or unable to pay anything.

Basically it's a non-starter.

[Alan Jones]

Disagree

83% may have been retained but that doesn't mean that 17% tax was paid.

Wasn't about 15% paid to MP as fees and about 3% paid as tax?

If a theoretical settlement was to take place then it would be 97%-X%

What is the starting point under BN66 is it your 97% or (using your e.g.) my 97-15 = 82%

It's the 82% idiot.

SO it could be the starting point AND i did say it was Theoreticla

PLUS it was only a suggestion.

I was not commenting on right and wrongs of the case BECAUSE i verily believe that if they scrapped BN66 (still a chance they could do this by muddying waters with a suspension of IR35- outside chance of this next week) and the case went to court on the facts (facts may be different to Counsel Opinion) you would lose.