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webberg
26th November 2015, 10:45
is the name of a science fiction novel dating from 1956 and written by Samuel Youd using a pen name.

It's worth a read.

Basically describes how in a world of diminishing resources, people will turn to increasingly brutal tactics to survive.

For many current providers, the start of that process was yesterday. Whilst I'm sure they will say that their arrangements remain "compliant" and have not been struck down by any Court and remain a valid means of retaining more of your income, the statement in the Blue Book yesterday is a warning you would be foolish to ignore.

That warning was that "disguised remuneration" is not regarded by the Government as valid tax planning and would if required attract legislation that would be backdated to yesterday.

I'm sure that there are many who will say that this is a position that can and will be challenged; it's intimidatory; it's designed to collect more revenue; it's HMG telling us how to arrange our affairs; etc. All very true.

If we could run our businesses and personal affairs on principle and those include resisting interference, we would have a reasonable chance of winning any debate here.

The fact is, we don't run our lives that way. We live in a practical world where HMG can and does make arbitrary and arguably unfair rules to fulfil their objectives (and those of society?) Their position here, clearly expressed, is that the world of contractors has to change. The sister threads in the "Future of Contracting" are worth a look in this regard.

My point here is to encourage you to review your current arrangements and ask some questions.

1. Is the arrangement quite complicated for what is essentially the payment of earnings?
2. Is the purpose of that complexity to avoid tax?

If the answers are "yes" and "yes", then principles aside, you WILL attract an HMRC investigation.

Ultimately whether you remain in a scheme or join new ones I'm sure are being crafted now, is your decision.

My opinion is one of many and scheme providers will have their own.

I urge you though to think objectively and clearly here and make a decision soon, based on the likely consequences of staying or remaining.

And read the book.

bluemonkey71
26th November 2015, 12:27
Good post. Anyone in a scheme or thinking of joining one needs to be certified insane.

cojak
26th November 2015, 12:33
Good post. Anyone in a scheme or thinking of joining one needs to be certified insane.

People said that in 2011.

And still they did.

I say again, if people can find this forum after HMRC come a'knocking, they could have found it before.

LandRover
26th November 2015, 12:44
People said that in 2011.

And still they did.

I say again, if people can find this forum after HMRC come a'knocking, they could have found it before.

Totally agree, many contractors don't still know of this forum or the implications, I certainly didn't. So that is unfortunately a problem, getting the message out, and this is where HMRC have a moral duty to inform those who are engaged in these schemes NOW...not in x years time with a discovery assessment notice. At least if people continue, then they were duly warned.

DonkeyRhubarb
26th November 2015, 12:45
People said that in 2011.

And still they did.

I say again, if people can find this forum after HMRC come a'knocking, they could have found it before.

Arguably, when they clobbered us with retro in 2008 that should have rung massive alarm bells.

I remember, at the time, many promoters dismissing us a "special case" and that it couldn't happen to their schemes.

Fast forward a few years and tens of thousands of contractors are in the shít.

BrilloPad
26th November 2015, 12:48
People said that in 2011.

And still they did.

I say again, if people can find this forum after HMRC come a'knocking, they could have found it before.

First they came for the Montpelier users. Then the other scheme users(2011 etc.)

And now they are coming for YOU and all the other "contractors" on here. Now I know you are a contractor. To HMRC you are a glorified typist who is a tax evader. To be hit with retrospective taxes, APNs and payments taken directly from your bank account.

LondonManc
26th November 2015, 12:49
People said that in 2011.

And still they did.

I say again, if people can find this forum after HMRC come a'knocking, they could have found it before.

To be fair, they probably felt like they'd been given good advice and weren't in full on panic mode beforehand. However, I agree, if it seems too good to be true, it probably is, just like most things in life.

Fred Bloggs
26th November 2015, 12:49
As long as HMRC are seen to be agressive towards contractors generally, then the scheme promoters are laughing. There'll always be clients available who want to game the system. The new dividend tax is playing right into the scheme promoters hands, as are the T&S restrictions.

BrilloPad
26th November 2015, 13:02
Arguably, when they clobbered us with retro in 2008 that should have rung massive alarm bells.

I remember, at the time, many promoters dismissing us a "special case" and that it couldn't happen to their schemes.

Fast forward a few years and tens of thousands of contractors are in the shít.

What also concerned me and you(and maybe a handful of others) is how much faith NTRT put in a parliamentary campaign. Complete waste of time. If you can't put on superhero suits and climb buildings you are stuffed.

I just saw my old MP(CliveEfford) on TV. He was part of committee that approved retrospective legislation. He was not even aware he approved it. And did nothing to help fix the mess he created.

Lots of "contractors" are now going to be bent over and take a sixteen incher(width) without lube. Good. I hope they come onto CUK and give a good whine so I can laugh at them.

I wish I could say more about what is happening regarding NTRT! Careless talk costs court cases.....

BrilloPad
26th November 2015, 13:04
As long as HMRC are seen to be agressive towards contractors generally, then the scheme promoters are laughing. There'll always be clients available who want to game the system. The new dividend tax is playing right into the scheme promoters hands, as are the T&S restrictions.

That was exactly the reason Montpelier attracted so many people in the naughties! To escape IR35.

They are regretting it now. Or are they? :rolleyes:

DotasScandal
26th November 2015, 13:18
That was exactly the reason Montpelier attracted so many people in the naughties! To escape IR35.
They are regretting it now. Or are they? :rolleyes:

Precisely. That's the most revolting aspect, really. HMRC are 100% responsible for the whole industry even coming into existence, yet will recognize NONE of it. By trying to micromanage contractor's behaviour, they set in motion a whole chain of unintended consequences (who would have thought??), and here we are.
Now you'd think they may have learned a lesson here? Perish the thought!
Instead, let's invent a narrative diabolizing an entire category of the workforce, and shove it down the public throat by sheer brute force.
And of course, let's double down on IR35, GAAR, and all the shit that didn't work in the past.
Hopeless.

cliffordthedog
26th November 2015, 15:57
"Lots of "contractors" are now going to be bent over and take a sixteen incher(width) without lube. Good. I hope they come onto CUK and give a good whine so I can laugh at them."

You're all heart Brillo and hopefully one day someone will do the same to you.

MrMarkyMark
26th November 2015, 16:00
You're all heart Brillo and hopefully one day someone will do the same to you.

Have you seen the way he walks :laugh

BrilloPad
26th November 2015, 16:21
"Lots of "contractors" are now going to be bent over and take a sixteen incher(width) without lube. Good. I hope they come onto CUK and give a good whine so I can laugh at them."

You're all heart Brillo and hopefully one day someone will do the same to you.

They already did. With the CUK baying mob right behind them. Its payback time.

squirrel
26th November 2015, 16:21
You're all heart Brillo and hopefully one day someone will do the same to you.

To be fair, us Avoiders have come in for plenty of flack from sections of the oh so smug Ltd brigade on these forums. Plenty of told you so's and you deserve all you gets. Brillo might have been generalising and a tad OTT but I get the sentiment even if I don't entirely agree ...

BrilloPad
26th November 2015, 16:23
To be fair, us Avoiders have come in for plenty of flack from sections of the oh so smug Ltd brigade on these forums. Plenty of told you so's and you deserve all you gets. Brillo might have been generalising and a tad OTT but I get the sentiment even if I don't entirely agree ...

This! I did not agree with my own post. I don't wish anyone harm. Unlike the CUK mass hoards who came after us in 2008. It is unfortunate that what happened to us is happening to them. But predictable.

ASB
26th November 2015, 17:01
This! I did not agree with my own post. I don't wish anyone harm. Unlike the CUK mass hoards who came after us in 2008. It is unfortunate that what happened to us is happening to them. But predictable.

I think it is trickling down, albeit to a lesser extent. I never really understood the hostility tbh.

Personally when contracting everything I did in terms of split divis, co car for non earning spouse etc was generally tax motivated. It was simply a general movement of my income into the capital taxes regime.

very efective it was too.

I was never under any illusion that this was what was intended and expected action eventually. It isnt in my view particularly different to a scheme

webberg
26th November 2015, 17:03
Was not around in 2008 and can't comment.

Here the situation is different.

The Government has writ large and clear that they see contractors as an affront to their revenue gathering efforts and are doing their best to collect tax as though they are employees but deny them the right to be employees.

The truth here at the moment is that they will succeed.

This website reaches a few thousand and has perhaps less than 100 active. IPSE says its reaches 30,000 but I've no evidence of that. Other contractor groups have a population probably a bit less.

Without one body able and willing to fight the corner on all fronts the next 18 months will see a revolution in how contractors operate and I suggest a reduction in overall numbers.

I get frustrated on the tax side of things. There are essentially two approaches. One is to litigate and the other is to negotiate. Both have good and bad points.

however the litigation side of life is riven into perhaps 5 or more groups. They're all fighting the same points and would be stronger together but they're not interested. Why? Many reasons but fees will be near the top.

On the negotiation side we're making progress but again are hampered because many people think that they're either better off keeping their head down or think that staying with the scheme provider somehow helps. Neither of these reasons is valid.

Anyway, I'm not here for the schardenfreuder but to try and help.

bluemonkey71
27th November 2015, 15:46
I'd like to see the following happen.

1) Government advertising of the issues with tax avoidance schemes on TV, press. If they can find the money to advertise about remembering to fill in your self assessment...

2) HMRC helpline for new/existing contractors and a whistleblower option on dodgy companies.

3) The companies than run schemes would have to deposit 50k into a HMRC holding account while they get official sign off from HMRC that what they are doing is legitimate. That would get rid of the QC opinion. Yearly review to make sure they haven't deviated from their agreement.

4) Scheme providers who peddle without HMRC sign off to be personally liable for fines/prosecution.

BrilloPad
27th November 2015, 16:04
Was not around in 2008 and can't comment.


Try starting a thread now on "fair tax share" and you will soon get the message. The CUK massive - particularly general - will try to hound you down. They don't understand the principal that it is the duty of every taxpayer to minimize their tax liability. It is quite amusing that is you asked Joe public whether PSCs should be allowed the vast majority would say they PSCs are disguised employees and that HMRC are quite right. Never mind the rule of law.

Of course if we listened to the mob we would have to bring back hanging. Ban caravans. And plenty of other things that are wrong.

Back in 2008 anyone who protested was hounded and harassed. Especially by the PCG(IPSE) mob. When I went limited I joined PCG forums and was shocked to see the abuse that was being hurled at us. I won't name names here(only because I have had several run ins with the mods and I am probably on the verge of a ban) but for a PCG director to hurl such abuse is a disgrace. My official complaint was denied. A PCG cover up.

Anyway, DR and I stuck it out. A few others joined. We swapped emails and that turned into NTRT. I fell by the wayside very quickly - but the NTRT committee have done amazing work. Especially the chairman who has been incredible!

I do hear very positive comments about what you have done too! Keep up the good work!

DonkeyRhubarb
27th November 2015, 16:40
You won't find many contractors on CUK, operating through a ltd co, openly admitting to tax avoidance.

There's always some other reason given for incorporation. Never tax.

Which is odd because every contractor, I've ever worked alongside, used a ltd co to maximise take-home pay. (Perhaps it was just the places I worked :rolleyes:)

That's why IR35 caused caused so much consternation.

And, by the way, in case anyone has forgotten, IR35 was anti-avoidance legislation.

webberg
27th November 2015, 16:55
Unfortunately hindsight is always 20:20 and a lot of people remember the good advice they gave in the past and how they would never stoop to "tax planning" but rather were joyful that the elected politicians were able to spend their money on their modest expenses.

I've been working in tax planning/mitigation/avoidance [insert as your mood takes you] for a long time and have met people who have presented me, at the slightest invitation, with a myriad of reasons as to why they did it. I've learnt that a) the reasons all make sense to the individual and b) it's none of my business and I'm not here to judge.

I wonder how those who do would react if tax rates were 60%? Does planning become more acceptable if the share the Government takes is seen as unfair?

I agree with the NTRT comments and people. It's an object lesson in how to run a campaign and is to a large degree the inspiration behind Big Group. All those involved deserve recognition, especially if the latest move is successful.

As for us, we do our best.

DotasScandal
27th November 2015, 18:44
The Chairman and Donkey Rhubarb are my heroes.
You guys ROCK! :music: