Government Consultation on tax avoidance schemes

[DonkeyRhubarb]

Mentions contractor schemes, ebts, loans and the like.

https://www.gov.uk/government/upload..._avoidance.pdf

"Proposals to require individuals and companies to pay the tax in dispute
during an enquiry or appeal relating to tax avoidance."

[LisaContractorUmbrella]

Made a few comments on this Time's almost up for 16,000 tax scheme contractors :: Contractor UK

Hope it's of use

[DonkeyRhubarb]

Made a few comments on this Time's almost up for 16,000 tax scheme contractors :: Contractor UK

Hope it's of use

The "follower" stuff is the same as announced back in December.

The extension Section 4 (page 15) is more ominous. I read it that this would allow HMRC to start issuing notices before a related scheme has ever been tested in court.

"As with the proposals in Chapter 3, these additional proposals would come into
effect from Royal Assent to Finance Bill 2014 and would permit HMRC to begin
issuing notices immediately after that date.

...

HMRC will then issue, in time for Royal Assent, a list
of DOTAS schemes where a Payment Notice will be issued."

[LisaContractorUmbrella]

The "follower" stuff is the same as announced back in December.

The extension Section 4 (page 15) is more ominous. I read it that this would allow HMRC to start issuing notices before a related scheme has ever been tested in court.

"As with the proposals in Chapter 3, these additional proposals would come into
effect from Royal Assent to Finance Bill 2014 and would permit HMRC to begin
issuing notices immediately after that date.

...

HMRC will then issue, in time for Royal Assent, a list
of DOTAS schemes where a Payment Notice will be issued."

I don't think, from what I have read, that they will be able to issue payment notices where a scheme hasn't previously been tested but it seems that they can (and will) issue 'conduct notices' for DOTAS schemes - there is more on all of this here: https://www.gov.uk/government/consul...-tax-avoidance which I am still trying to plough through - check out pages 78 onwards

[DonkeyRhubarb]

I don't think, from what I have read, that they will be able to issue payment notices where a scheme hasn't previously been tested but it seems that they can (and will) issue 'conduct notices' for DOTAS schemes - there is more on all of this here: https://www.gov.uk/government/consul...-tax-avoidance which I am still trying to plough through - check out pages 78 onwards

I'm not so sure Lisa. Have another read of 4.4 through 4.13

[LisaContractorUmbrella]

I'm not so sure Lisa. Have another read of 4.4 through 4.13

Bear in mind this is a proposal but yes I stand corrected it does look as though they will send payment notices to users of DOTAS provided that there is already an ongoing appeal or enquiry - there is a comment:

"most structures that are notified under DOTAS have characteristics or hall marks of avoidance"

Certainly would seem that we are heading towards a guilty till proven innocent scenario

[newcastle]

What happened to innocent until proven guilty?

I'm not going to defend the people that use these schemes - it's their choice and they take that risk - but if HMRC can point the finger and destroy your life without needing to prove you have done anything wrong aren't we getting a bit close to 1984?

[DonkeyRhubarb]

Bear in mind this is a proposal

Yes but HMRC will fight tooth and claw for it because it will clear most of the 65,000 open case backlog in one fell swoop.

Even the DOTAS stipulation is woolly, see 4.6 bullet point 3.

"Who should have entered a SRN, or should have appeared on a ‘client list’ but
have not done so – either because the scheme was not disclosed as it should
have been, or the taxpayer has not entered the SRN when they should have
done so."

They will just say everyone "should have"

[LisaContractorUmbrella]

Yes but HMRC will fight tooth and claw for it because it will clear most of the 65,000 open case backlog in one fell swoop.

Even the DOTAS stipulation is woolly, see 4.6 bullet point 3.

"Who should have entered a SRN, or should have appeared on a ‘client list’ but
have not done so – either because the scheme was not disclosed as it should
have been, or the taxpayer has not entered the SRN when they should have
done so."

They will just say everyone "should have"

I am not sure where they would stand with that though - this almost creates a circular scenario - if a scheme, in HMRC's opinion, should have had a SRN but it didn't because the promoter did not believe it was an avoidance vehicle then HMRC would have to revert back to proving that it was a reworking of a scheme that had already failed in court. I don't think they can just arbitrarily say everyone has to cough up what they think should be coughed up based on the theory that any disclosed scheme is legally unsound. Mind you, saying that, is it just me or does this seem to be changing the law to make tax avoidance, as well as evasion, unlawful???

[DonkeyRhubarb]

HMRC's problem is that the 65,000 backlog will take forever to clear if they have to wait for cases to go to court.

It's easier just to slap everyone with a payment notice then it doesn't matter how long cases take.

I don't know what would happen in the situation where individuals would be bankrupted or forced to sell their home to pay the bill.