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Michael J Perry FCA
28th January 2014, 22:48
It would appear that the Boyle decision is now final as no application to appeal has been lodged within the prescribed period.

Do contact us if you would like free advice about how this might impact on your own case.

This is probably required reading if you have an open tax enquiry under Section 9A TMA 1970:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/275070/Tackling_marketed_tax_avoidance.pdf

<admin note>Just fixed the pdf link - the HTML version can be viewed two posts down...</admin note>

BaconVII
28th January 2014, 22:59
This is probably required reading if you have an open tax enquiry under Section 9A TMA 1970:
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/275070/Tackling_marketed_tax_avoidance.pdf


Can you repost that link - that one's broken

Thanks

Michael J Perry FCA
29th January 2014, 00:42
https://www.gov.uk/government/consultations/tackling-marketed-tax-avoidance

Contact me if you are unable to open link and I will email you a PDF version.

pengjn
29th January 2014, 07:11
https://www.gov.uk/government/consultations/tackling-marketed-tax-avoidance

Contact me if you are unable to open link and I will email you a PDF version.

Very interesting and well written. I am still trying to decide whether to fight because I was playing by the rules at the time or just pay up and chalk it up to experience.

Living life on the Edge
29th January 2014, 08:20
This is a bomb waiting to go off!

In plain English, the government are looking to pass a new bill which will mean you have to pay your tax in advance of disputing it.

This means you could be bankrupted before you even have your day in court.

+1

I have read the draft legislation, and if I understand it correctly, HMRC could - assuming the legislation passes into law unamended:

1) Take an existing, finalised legal case (let's say Boyle for the sake of argument) .
2) Apply the circumstances of that substantive case to your scheme and make a case that the substantive case is relevant to yours within 12 months of the substantive case being finalised.
3) Request upfront payment of any assessed liability both under appeal and even enquiry (forcing you to pay before you have had an opportunity to appeal an amount in a year under enquiry) by means of a 'payment notice ' and 'follower notice'.
4) The only recourse an individual would have would be a 90 day period to challenge the grounds of the payment notice, against very limited criteria.


A couple of other points of note to me:

"There is no inherent presumption that tax under dispute should sit with the taxpayer rather than the Exchequer."



I think you could also make a strong argument that there is no inherent presumption that the tax under dispute should sit with HMRC.
In section 5, 'assessments of impacts' under the section 'Impact on individuals and households ', it states:

"There will only be an impact on those individuals who engage in tax avoidance. We expect most of these to be higher or additional rate taxpayers"


This is a flippant, throw-away comment that I believe vastly understates the hurt that this legislation will bring.
Since when has it been acceptable to potentially bankrupt individuals and change lives forever when they have had no opportunity to follow due process as it exists today? I'm thinking BN66 is a nasty precedent though.

What difference does the tax-band of the taxpayer make? Is this to appeal to Labour MP's and garner cross-party support?

DonkeyRhubarb
29th January 2014, 08:47
The most sinister part is the extended Proposal 1 on page 15.

This would give HMRC the power to serve immediate payment notices on anyone who has used a scheme registered under DOTAS.

DOTAS was introduced in 2004, so we are talking about schemes going back 10 years.

Dylan
29th January 2014, 09:20
The equivalent of the Police giving you 3 points and a fine straight away resulting in a totting up ban and loss of job (or bankruptcy and loss of job in this case), then removing the points and refunding you if you aren't found guilty in court with no regard for the mess you are now in.

Innocent until proven guilty is (was?) a fundamental part of law in this country.

The document talks about tax payers dragging their heals, HMRC have known about these schemes for years and years, including how they work, DOTAS means they have know about them since inception in many cases and have done nothing.

Still, as long as Vodafone, star bucks, amazon et el are getting the same treatment eh.

PeterF
29th January 2014, 09:22
Well, think this is the last straw for me. Given HMRC's conduct and tactics throughout all of this myself and the other half have been pondering whether england is the best place for the kids to grow up - clearly it is not. Time to do the sums, consider paying up to draw a line under it then get the hell out of here. FWIW, that means a loss of total taxes in the region of £70k per year.

Enough!

DonkeyRhubarb
29th January 2014, 09:44
The equivalent of the Police giving you 3 points and a fine straight away resulting in a totting up ban and loss of job (or bankruptcy and loss of job in this case), then removing the points and refunding you if you aren't found guilty in court with no regard for the mess you are now in.

Innocent until proven guilty is (was?) a fundamental part of law in this country.

The document talks about tax payers dragging their heals, HMRC have known about these schemes for years and years, including how they work, DOTAS means they have know about them since inception in many cases and have done nothing.

Still, as long as Vodafone, star bucks, amazon et el are getting the same treatment eh.

The document refers to 65,000 open cases. Given that DOTAS has been around 10 years, the proposals will affect a large proportion of these 65,000.

Many of these cases will be ones where HMRC knows full well that they have little prospect of winning in court.

This is draconian in the extreme, and we in NTRT will be redirecting some of our lobbying effort at it.

Dylan
29th January 2014, 09:51
How can we get involved?

This is disgusting, bullying behaviour.

DonkeyRhubarb
29th January 2014, 10:00
How can we get involved?

This is disgusting, bullying behaviour.

Watch this space.

We may come up with a letter that everyone, not just our members, can send.

We will probably also be looking to engage with professional bodies like the CIOT.

turnover
29th January 2014, 10:03
The most sinister part is the extended Proposal 1 on page 15.

This would give HMRC the power to serve immediate payment notices on anyone who has used a scheme registered under DOTAS.

DOTAS was introduced in 2004, so we are talking about schemes going back 10 years.

Hello DR,

This legislation is under consultation so there is still time to respond and provide comments? If this is the case what is the most effective way of doing so? Or is there not much point as it will be ignored.

The other point is the Human Rights angle - People will be in a position where as a result of this legislation they will be likely to be a) bankrupt b) unable to defend themselves as propsoed funds to fight are taken by HMRC

Would this be something that would be in their interest to fight?

DonkeyRhubarb
29th January 2014, 10:12
Hello DR,

This legislation is under consultation so there is still time to respond and provide comments? If this is the case what is the most effective way of doing so? Or is there not much point as it will be ignored.

The other point is the Human Rights angle - People will be in a position where as a result of this legislation they will be likely to be a) bankrupt b) unable to defend themselves as propsoed funds to fight are taken by HMRC

Would this be something that would be in their interest to fight?

It is be hoped that the professional bodies like the CIOT will challenge the proposals.

However, we at NTRT will be consulting with our lobbying company to determine how best to respond.

Watch this space.

varunksingh
29th January 2014, 10:38
Very interesting and well written. I am still trying to decide whether to fight because I was playing by the rules at the time or just pay up and chalk it up to experience.

Very interesting indeed but I am almost sick of hearing about Boyle decision. If anyone is pay up because of Boyle decision
1) Boyle was not an EBT
2) Forex never existed

If someone, anyone has found how Boyle's decision should affect an EBT scheme, please let me know. Seems like my head is deep down in sand but the world has started to believe the Boyle's decision is for all EBTs.

Why is only Boyle's decisions being applied to all EBT even when it is not an EBT but Rangers case which was an EBT is not being applied to EBTs? Someone please ask HMRC and who so ever write these articles. Only because HMRC wants to cherry pick and make everyone believe as if we did something wrong by using an EBT.

varunksingh
29th January 2014, 11:10
Watch this space.

We may come up with a letter that everyone, not just our members, can send.

We will probably also be looking to engage with professional bodies like the CIOT.

Only one question: Which “substantially similar” case will HMRC use to send follower notices to all EBT users? Boyle? Which was not a EBT! will become “substantially similar” to an EBT? May be Lisa Keeble can answer this as well for us.

If HMRC is going this route they should change their name to “substantially similar” to Loan sharks:banana:

DonkeyRhubarb
29th January 2014, 12:08
Only one question: Which “substantially similar” case will HMRC use to send follower notices to all EBT users? Boyle? Which was not a EBT! will become “substantially similar” to an EBT? May be Lisa Keeble can answer this as well for us.

If HMRC is going this route they should change their name to “substantially similar” to Loan sharks:banana:

You need to read the consultation document, in particular Proposal 1 on page 15. This extends the "follower" regime.

If your scheme was registered with DOTAS then, under Proposal 1, they do not need to win a similar court case to issue payment notices.

SantaClaus
29th January 2014, 13:30
This may be an opportunity for EBT scheme users to form a coalition with NTRT members on this one issue.

Just a thought at present, but could gather momentum soon.

As DR says, watch this space.

varunksingh
29th January 2014, 13:48
You need to read the consultation document, in particular Proposal 1 on page 15. This extends the "follower" regime.

If your scheme was registered with DOTAS then, under Proposal 1, they do not need to win a similar court case to issue payment notices.

Thanks. Had not seen this one. Seems like one way or another HMRC wants the tax collected. They know EBTs might win in courts and are thus forcing contractors to pay.

varunksingh
29th January 2014, 19:50
May be all should individually also respond to consultation document. This is very unfair if it become Law.

ramzanamin
30th January 2014, 00:39
Thanks. Had not seen this one. Seems like one way or another HMRC wants the tax collected. They know EBTs might win in courts and are thus forcing contractors to pay.

Well if EBTs have a chance of winning in court why should we pay up without pointing out the flaws in HMRCS arguments? Ps Boyle has little or no relevance to Properly implemented EBTs and HMRC know that.

Saleos
30th January 2014, 10:28
There have been two potentially significant announcements made by Government in the past week or so, which are highly likely to affect those on this forum.

The Finance Bill 2014 will contain legislation to significantly change the economic landscape for those participating in tax planning arrangements. Both seek to shift the financial burden of protracted enquiries, and potentially litigation, from Government to taxpayers.

The proposals regarding ‘failure notices’ were first released last August in a document called 'Raising the stakes on tax avoidance'. The draft legislation has now been published along with further proposals and is open for comment.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/275071/Raising_the_stakes_on_tax_avoidance.pdf

The relevant parts of the consultation document are contained at pages 35 to 45.

Under the proposals for ‘failure notices’ taxpayers who have used an avoidance scheme similar to one that a court or tribunal has already overruled will also have to pay the amount HMRC says they owe. When issuing a ‘failure notice’ HMRC would, at the same time, issue a payment notice giving 90 days to pay the disputed tax. Late payment penalties of up to 15 per cent will be imposed in three successive stages for delays in paying the tax under dispute.

But the question of whether HMRC might issue ‘failure notices’ to taxpayers on this forum following Boyle will be a moot question if further proposals announced last Friday become law.

In a further consultation document (https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/275070/Tackling_marketed_tax_avoidance.pdf - see page 15 onwards) the Government announced plans to extend the ‘failure notice’ measure to all cases involving schemes disclosed, or that should have been disclosed, under the DOTAS (Disclosure of Tax Avoidance Schemes) regime.

Under these proposals, payment of the disputed tax in respect of ongoing enquiries would be required from anyone who has taken part in a DOTAS scheme, or one that should have been disclosed under DOTAS. This would apply in relation both to existing cases, which have not yet been settled, and to new cases.

This proposal is subject to consultation and there is therefore an opportunity for those on this forum to have your say. The rules will not change if you simply vent your spleen on here. The email address to which representations should be sent is included within each consultation document. You can influence these rules only if you use them.

I personally recommend that any representations focus upon the economic consequences of unexpectedly having to pay tax under dispute before the question of liability has been determined by the Courts rather than any argument about the validity of EBT loan planning: HMRC have long publicised their view of EBTs and that isn't going to change.

DonkeyRhubarb
30th January 2014, 10:39
Excellent post Saleos.

Although I think you may have meant to say 'follower notices' rather than 'failure notices'.

I have already responded to the consultation document. Others may decide to do likewise.

The email address is:
aag.consultation AT hmrc.gsi.gov.uk

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/275070/Tackling_marketed_tax_avoidance.pdf

tax is taxing
30th January 2014, 11:52
Dear DR

Is there an universal well thought through letter which can all use to oppose this basic infringement to one's human rights?

I have left my feedback. however, I am not certain if it adds any meat to the opposition.

thanks in advance

lfcynwa
30th January 2014, 12:38
Excellent post Saleos.

Although I think you may have meant to say 'follower notices' rather than 'failure notices'.

I have already responded to the consultation document. Others may decide to do likewise.

The email address is:
aag.consultation AT hmrc.gsi.gov.uk

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/275070/Tackling_marketed_tax_avoidance.pdf

Is it possible for draft / template to respond lodge objection?

KAM
30th January 2014, 13:25
Like all of you guys, I'm seriously concerned about this recent legislation which stands to bankrupt me.

What also concerns me is the complete lack of responsibility by the providers of these EBT schemes who on the most part, have simply closed the shutters and started again somewhere else with absolutely no hint of support for the 1000's they have left out in the cold. I (like many others), used, and indeed paid to use, an EBT scheme in good faith as an efficient tax vehicle which claimed no risk / "100% compliance" with tax laws and legislation. You may argue that the legislation is "retrospective" but surely these companies must be held to account for their actions? After all, it was not us that invented or sold these schemes.

In my particular case, the EBT provider is still in existence (at the moment anyway and is trading with a different service) but i'd be particularly interested in anyone else who has raised this subject with their provider. Was there any hint of financial support in this type of situation? Surely their Professional Indemnity policy could cover this type of thing???

BernardOKelly
30th January 2014, 17:13
Excellent post Saleos.

Although I think you may have meant to say 'follower notices' rather than 'failure notices'.

I have already responded to the consultation document. Others may decide to do likewise.

The email address is:
aag.consultation AT hmrc.gsi.gov.uk

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/275070/Tackling_marketed_tax_avoidance.pdf

The text of the Consultation document talks of "Follower Notice" but curiously the draft legislation uses the term "Failure Notice". A Freudian slip perhaps??

DonkeyRhubarb
30th January 2014, 19:38
I have discussed it with our lobbying company, who have previous experience of consultations, and they say it's a waste of time using template letters as they will all be treated as one response.

If you want to have your say then you need to write your own response.

Saleos
30th January 2014, 21:20
Couldn't agree more. Everyone will have different views on this (or perhaps not!). Better to put those into your own words.

I'd caution though that sympathy is likely to be scant for tax avoiders (sorry to be so blunt but that is what Government considers you) so a sympathy plea won't cut it.

My own view is that only a clear explanation of the economic impact of being told to find the disputed sum unexpectedly early, at 90 days notice, on jobs; spending, work, choice of residence etc. is likely to have any impact at all. And even then I find it difficult to be optimistic with the Government flatly rejecting the strong representations made by the vast majority that failure notices (to use the term used in the draft legislation rather than that in the accompanying documents) should be issued only after a finding of at least the Upper Tribunal. But if people simply sit back and accept this there is no possibility of change.


I have discussed it with our lobbying company, who have previous experience of consultations, and they say it's a waste of time using template letters as they will all be treated as one response.

If you want to have your say then you need to write your own response.

TheDandy
30th January 2014, 21:54
The document refers to 65,000 open cases. Given that DOTAS has been around 10 years, the proposals will affect a large proportion of these 65,000.

Many of these cases will be ones where HMRC knows full well that they have little prospect of winning in court.

This is draconian in the extreme, and we in NTRT will be redirecting some of our lobbying effort at it.

And let's not forget to mention the Government sometimes and not just HMRC. Whilst we generally accept they are one and the same thing in these matters it's worth giving special mention to our Machiavellian political class , led in this regard by Mr Gauke who it would seem is incapable of segregating his moral position from his 'legal' one but is more that happy to educate everyone else how they should conduct their affairs.

It's good to know it's morally wrong to pay the tradesman cash but stamp duty claims on much needed second homes is OK!

cojak
31st January 2014, 07:11
There was a debate on this thread last night which I have moved to http://forums.contractoruk.com/accounting-legal/63073-loans-ebts-other-trusts-17.html

If you want to continue the debate, do it there. Any further debate here will be removed and sanctions may be deployed.

LisaContractorUmbrella
31st January 2014, 09:22
Only one question: Which “substantially similar” case will HMRC use to send follower notices to all EBT users? Boyle? Which was not a EBT! will become “substantially similar” to an EBT? May be Lisa Keeble can answer this as well for us.

If HMRC is going this route they should change their name to “substantially similar” to Loan sharks:banana:

They don't need case law for EBT's, these were outlawed under the disguised remuneration legislation which came in in 2011 http://www.hmrc.gov.uk/specialist/ebt-faqs.pdf. If they were to use case law to crack down further under the new legislation they could refer to Aberdeen Asset Management Employee Benefit Trusts: Another Win For HMRC - Brodies LLP Legal Resource Area (http://www.brodies.com/blog/corporate/employee-benefit-trusts-another-win-hmrc/)

varunksingh
31st January 2014, 10:28
They don't need case law for EBT's, these were outlawed under the disguised remuneration legislation which came in in 2011 http://www.hmrc.gov.uk/specialist/ebt-faqs.pdf. If they were to use case law to crack down further under the new legislation they could refer to Aberdeen Asset Management Employee Benefit Trusts: Another Win For HMRC - Brodies LLP Legal Resource Area (http://www.brodies.com/blog/corporate/employee-benefit-trusts-another-win-hmrc/)

Aberdeen Asset Management was paying Bonus through EBT not loans. Why Rangers case is not being referred here?

Saleos
31st January 2014, 10:40
Or Dextra? Or Sempra Metals? Or Scotts Atlantic?


Aberdeen Asset Management was paying Bonus through EBT not loans. Why Rangers case is not being referred here?

LisaContractorUmbrella
31st January 2014, 10:50
Aberdeen Asset Management was paying Bonus through EBT not loans. Why Rangers case is not being referred here?

The Rangers case is significant and is not currently an HMRC victory but, regardless, the disguised remuneration legislation will apply to loans through EBT's:

The legislation applies where (s 554A):

there is an arrangement which relates to an existing, former or prospective employee;
it is, in essence, a means of providing rewards, recognition or loans in connection with employment;
the 'relevant third party' operating the arrangement takes a 'relevant step; and
it is reasonable to suppose that, in essence, the step is pursuant to the arrangement or there is some other connection between them.
When the legislation applies, the value of the cash or assets which are the subject of the 'relevant step' is treated as employment income (s 554Z2), subject to PAYE and NIC (s 687A and s 695A).

mrs t
31st January 2014, 11:01
Even if, one was to settle, a lot of people myself included received a letter for 2010/2011 that quoted an absurd amount...5 times the amount on the previous years. That amount is completely inaccurate especially as I discontinued using the scheme in Dec 2010. How could that amount be disputed?

LisaContractorUmbrella
31st January 2014, 11:15
Even if, one was to settle, a lot of people myself included received a letter for 2010/2011 that quoted an absurd amount...5 times the amount on the previous years. That amount is completely inaccurate especially as I discontinued using the scheme in Dec 2010. How could that amount be disputed?

Have HMRC provided a breakdown for the calculation? If not you can request one.

Gavtrudi
31st January 2014, 11:30
Have HMRC provided a breakdown for the calculation? If not you can request one.

I'm in the same boat here with the HMRC quoting a huge amount for 2010 - 2011 even though I was only employed through Edge for 5 months of that period. Its a bit worrying that we might be asked to pay up the whole amount requested even though the figure is way off the mark, then having to fight to claim it back.?

LisaContractorUmbrella
31st January 2014, 11:33
I'm in the same boat here with the HMRC quoting a huge amount for 2010 - 2011 even though I was only employed through Edge for 5 months of that period. Its a bit worrying that we might be asked to pay up the whole amount requested even though the figure is way off the mark, then having to fight to claim it back.?

It may be that the notice you've received does not just include what HMRC perceive to be the underpaid amount of tax, it could also include interest and penalties

convict
31st January 2014, 12:00
Well I've responded to the consultation and urge other to do the same.

1. What happens if someone enters into scheme and is forced to pay, cannot and is bankrupted. The person now cannot continue in their line of business due to being bankrupt and is unemployed and their career is wrecked. Later it turns out the scheme was ruled legitimate. Will you pay them compensation for ruining their life?

"It is proposed, therefore, that HMRC will issue a Payment Notice to the best of
their judgement. "

2. HMRC have an opinion and an estimate of tax. So now they can make a guess, demand money and then maybe give it back depending on what they think:

"Where accelerated payments have been
demanded and paid, HMRC will repay if the taxpayer succeeds in litigation and
HMRC pursues an appeal, subject to an additional rule that will enable HMRC to
withhold a repayment on the grounds that HMRC has reasonable grounds for
believing that the tax may be at risk. "

The whole thing looks like a massive land-grab by HMRC who will resist amending this as much as possible. They've put the stake in the ground, and then put a building on top of it.

ssbahra
31st January 2014, 12:13
Like all of you guys, I'm seriously concerned about this recent legislation which stands to bankrupt me.

What also concerns me is the complete lack of responsibility by the providers of these EBT schemes who on the most part, have simply closed the shutters and started again somewhere else with absolutely no hint of support for the 1000's they have left out in the cold. I (like many others), used, and indeed paid to use, an EBT scheme in good faith as an efficient tax vehicle which claimed no risk / "100% compliance" with tax laws and legislation. You may argue that the legislation is "retrospective" but surely these companies must be held to account for their actions? After all, it was not us that invented or sold these schemes.

In my particular case, the EBT provider is still in existence (at the moment anyway and is trading with a different service) but i'd be particularly interested in anyone else who has raised this subject with their provider. Was there any hint of financial support in this type of situation? Surely their Professional Indemnity policy could cover this type of thing???

Its a complete joke. These companies are still in existence today, some under a different name and HMRC are going after the people who took out these schemes. What about closing down the companies that offered them? I am not paying them anything until they close down the company I was with. It is the fault of HMRC/governemnt that let these companies crop up in the first place. There wouldnt be this mess of these companies were not around.

convict
31st January 2014, 12:31
Its a complete joke. These companies are still in existence today, some under a different name and HMRC are going after the people who took out these schemes. What about closing down the companies that offered them? I am not paying them anything until they close down the company I was with. It is the fault of HMRC/governemnt that let these companies crop up in the first place. There wouldnt be this mess of these companies were not around.


What has any of this got to do with the consultation doc?

DonkeyRhubarb
31st January 2014, 12:33
The whole thing looks like a massive land-grab by HMRC who will resist amending this as much as possible. They've put the stake in the ground, and then put a building on top of it.

Bear in mind that this is legislation so it will have to be passed by Parliament. A lot of MPs, especially Tories, will not be comfortable about people being denied due process.

It's one thing to introduce this going forward (prospectively) ie. from 2014 onwards, if you use a DOTAS scheme, you have to pay the tax up front.

It's another thing altogether to make it retrospective back to 2004 when DOTAS was first introduced.

cojak
31st January 2014, 12:34
What has any of this got to do with the consultation doc?

It hasn't.

He's just venting his spleen.

new user
31st January 2014, 12:35
Its a complete joke. These companies are still in existence today, some under a different name and HMRC are going after the people who took out these schemes. What about closing down the companies that offered them? I am not paying them anything until they close down the company I was with. It is the fault of HMRC/governemnt that let these companies crop up in the first place. There wouldnt be this mess of these companies were not around.

It is not just a joke - its much more serious than that, looks like HMRC employees are/were involved in these arrangements. When I keep pointing to the responsibility of the scheme providers - HMRC protecting them, saying they are legitimate and can offer their services and would not be responsible. Scheme providers are legal UK companies, which are receiving money on the contractors behalf and manipulate it. These companies are registered and paying taxes (income from commissions, corporate tax...). HMRC can't provide any arguments and trying to avoid this topic by all means.

cojak
31st January 2014, 12:38
Right - let's put a stop to this.

If you want to complain about the unfairness of Scheme Providers 'getting away with it', do it in another thread.

You may even want to do something about it.

Don't just complain about them in this thread (which is about the consultation paper).

Any more and I'll start a separate thread and dump you in there myself.

LandRover
31st January 2014, 12:41
It is not just a joke - its much more serious than that, looks like HMRC employees are/were involved in these arrangements. When I keep pointing to the responsibility of the scheme providers - HMRC protecting them, saying they are legitimate and can offer their services and would not be responsible. Scheme providers are legal UK companies, which are receiving money on the contractors behalf and manipulate it. These companies are registered and paying taxes (income from commissions, corporate tax...). HMRC can't provide any arguments and trying to avoid this topic by all means.

The employer is responsible for subtracting tax and Ni before payments are made to employees. The Rangers case was against the Murray Group not individual footballers.

TheDandy
31st January 2014, 12:41
Well I've responded to the consultation and urge other to do the same.

1. What happens if someone enters into scheme and is forced to pay, cannot and is bankrupted. The person now cannot continue in their line of business due to being bankrupt and is unemployed and their career is wrecked. Later it turns out the scheme was ruled legitimate. Will you pay them compensation for ruining their life?

"It is proposed, therefore, that HMRC will issue a Payment Notice to the best of
their judgement. "

2. HMRC have an opinion and an estimate of tax. So now they can make a guess, demand money and then maybe give it back depending on what they think:



"Where accelerated payments have been
demanded and paid, HMRC will repay if the taxpayer succeeds in litigation and
HMRC pursues an appeal, subject to an additional rule that will enable HMRC to
withhold a repayment on the grounds that HMRC has reasonable grounds for
believing that the tax may be at risk. "

The whole thing looks like a massive land-grab by HMRC who will resist amending this as much as possible. They've put the stake in the ground, and then put a building on top of it.

You forgot to ask which group of people will be next and how these principals will be applied to said group once this is resolved to their satisfaction. Never happen you say?

EDIT, apologies shouldn't have replied with that on this thread - won't happen again sir!

TheDandy
31st January 2014, 12:54
Bear in mind that this is legislation so it will have to be passed by Parliament. A lot of MPs, especially Tories, will not be comfortable about people being denied due process.

It's one thing to introduce this going forward (prospectively) ie. from 2014 onwards, if you use a DOTAS scheme, you have to pay the tax up front.

It's another thing altogether to make it retrospective back to 2004 when DOTAS was first introduced.

It is another thing but I am sure from your own experience it's a real prospect. It needs more than a lot of Tories to kill this bill off so let's hope the experience of BN66 will be sufficient to make them think long and hard before supporting this. I won't be holding my breath though!

costo
31st January 2014, 13:03
I'm yet to respond but want to gather some more thoughts before I do.

A question - will HMRC "delete" our responses? - it would be in HMRC's interest to "ignore" our responses (and lets be honest they don't want to play fair), how can we be sure that they do read them and make sure the concerns are noted? In looking at the previous documents they seem to gloss over many questions as not relevant and not saying how many people ask? should a email box be setup for example where when responding all could CC the mailbox so HMRC could not claim they did not see the responses? that would also help us potentially in the future if this was challenged? When this reaches the government for ratification they need to have the facts, not a convoluted washed over version HMRC push through ignoring valid points raised?

Maybe the BN66 guys could comment here as they have been through similar?



Section 3.8

The ‘follower notice’ proposals involve the issue of a notice to taxpayers involved
in avoidance schemes where there has been a final judicial decision in another
taxpayer’s case on the same or similar arrangements. The notice requires the
taxpayer to amend their tax return (if the return is still under enquiry) or agree to
settle the dispute (where a closure notice or tax assessment or determination has
been made and is under appeal).

What constitutes “similar” – and who can make that definition? That by its nature is subjective and should be answered by a impartial party (e.g. a judge) If it is HMRC they become judge/jury & executioner



Section 3.19

It is important to note that this will simply be a form of payment on account and not
a payment that determines the amount of the final liability. If the amount paid is
less than the final amount due, the taxpayer will still be liable to pay any remaining
balance when the dispute is finally resolved. Equally, if the taxpayer continues to
pursue their claim and is successful then they will get their money back with
interest.


Again this glosses over the details, it almost implies that users of schemes have “cash” available to give to HMRC whilst the majority of people have either not got the money at all (lets also not forget we are in a recession) or its tied up in investments. If forced to liquidate all assets (and many of us also go bankrupt) – if eventually we won giving the money “back” with interest would not compensate for the damages done to us personally and society as a whole. Even stating HMRC’s figure of them winning 80% of cases (where only cases based on what was taken to court they expect to win), that means that 20% of people effected by this will have been significantly negatively effected in a life changing way, only to be proved they were innocent all along. That’s 1 in 5 people will have their lives destroyed with no recourse from HMRC when they were innocent. This is actually a conservative estimate, as of yet HMRC have not proved the schemes did not work and still unlikely they will be able to prove definitely.


Section 3.5

There is no inherent presumption that tax under dispute should sit with the
taxpayer rather than the Exchequer. Under current law, there are a number of
circumstances where the tax sits with the Exchequer while the liability is finalised.
Currently:

• HMRC is able to deny claims for tax repayments pending final resolution;
• HMRC can enforce tax payment when there are claims for other years that
might reduce or eliminate that tax;
• Tax is payable following a court or tribunal decision, despite a continuing
appeal; and
• There are general circumstances where tax is withheld and repaid (eg: PAYE,
tax on interest),

These are totally different circumstances, the 1st one being tax repayments so they already have the cash - in these cases the money is highly likely (if its there at all) to be tied up in long term investments and in freeing it up means liquidating assets. This is a totally different situation to mentioned here with the consequences being much more far reaching.

Then of course the impact section – it glosses over the impact this will have on the economy – 16,000 people is not a small group of people, there is some serious assumptions that this only affects “high earners” - How can that be proved?

As they mention the vast majority of users of schemes were pre 2009, that was a very different economy that it is now and I think that this impact needs to be proved rather than assumed. I for one do not earn anything near the money I did in those days and I’m not alone, we should make it clear that as one who is effected by this then they are wrong.

Assuming 16K people have to pay significant money in 90 days has no impact to the economy cannot be correct – has anything like this happened before? for example there will be a significant amount of bankruptcies in one go - how does that affect the systems in place for bankruptcy? could the courts manage a massive increase? social housing needed for the bankrupt people with families, businesses closed down to pay debts, people put out of work, security clearances lost and can no longer contribute to society? Then lets not forget the cost of health, this will cause massive amounts of stress stress = sickness more burden on the NHS, suicides, alcoholism, drug use, marital breakdowns on a scale not seen before? How many people will leave the country? skills exodus... and these are just my initial thoughts.

Has it been considered the wider effect than the person who used the scheme? e.g. children - this has a significant impact on the lives of those around the users of such schemes.


DOTAS Follower Notice – Perhaps the most sinister of all of this When the schemes were marketed this was not case, had we been in privy to that information surely nobody would have signed up. In the same way the government makes their decisions based on what they knew at the time so did we? it wasn't so long ago the great expenses scandal which is in effect along the similar lines of how these schemes were used - now the rules have changed and be tightened but it wasn't retrospectively applied to them? but it is recommended in this case.


I'm sure more to come - I urge everyone to start thinking and responding - this is not just an attack on users of avoidance schemes, the implications that such draconian far sweeping laws can get passed into society unchecked is unbelievable, reckless and could lead to even more desperate measures by the government.

LisaContractorUmbrella
31st January 2014, 13:13
Its a complete joke. These companies are still in existence today, some under a different name and HMRC are going after the people who took out these schemes. What about closing down the companies that offered them? I am not paying them anything until they close down the company I was with. It is the fault of HMRC/governemnt that let these companies crop up in the first place. There wouldnt be this mess of these companies were not around.

There is an old expression - caveat emptor which means 'buyer beware' - HMRC's argument against this would be that it is the responsibility of the tax payer to arrange their own affairs - blaming the company that devised the scheme will not absolve you of your responsibilities as a tax payer. As you say, many of these schemes are still existence (although not for much longer I would think) and they make promises of 85% or 90% take home - with the basic rate of tax at 20% and, knowing that the scheme operator will take a cut, using one must always be, at the very least, a calculated risk

DonkeyRhubarb
31st January 2014, 13:19
It is another thing but I am sure from your own experience it's a real prospect. It needs more than a lot of Tories to kill this bill off so let's hope the experience of BN66 will be sufficient to make them think long and hard before supporting this. I won't be holding my breath though!

You are right to be sceptical/cynical. The Government usually gets what it wants.

And, as you can tell from the tone of this on the Government website, they want it !

https://www.gov.uk/government/news/tax-avoiders-to-be-told-pay-now-as-government-demands-tax-owed-upfront

LisaContractorUmbrella
31st January 2014, 13:44
Reading on further - penalties will also be imposed if you fail to comply with a failure notice within 90 days:

12 (1) to the extent that the denied advantage is a deferral of tax (as with the EBT loan schemes) the value of that advantage is:

(a) 25% of the amount of the deferred tax for each year of the deferral or
(b) a percentage of the amount of deferred tax for each separate period of deferral of less than a year, equating to 25% per year of, if less, 100% of the amount of the deferred tax

This penalty can be reduced if the tax payer is seen to cooperate with HMRC. The penalty itself must be paid within 30 days of received the notice; similarly any appeal must be made within 30 days.

Further, if accelerated payments are unpaid at the end of the payment period HMRC will impose a penalty of 5% of the amount, further penalties of 5% will be applied after 5 months and then again after 11 months.

TheDandy
31st January 2014, 13:53
Reading on further - penalties will also be imposed if you fail to comply with a failure notice within 90 days:

12 (1) to the extent that the denied advantage is a deferral of tax (as with the EBT loan schemes) the value of that advantage is:

(a) 25% of the amount of the deferred tax for each year of the deferral or
(b) a percentage of the amount of deferred tax for each separate period of deferral of less than a year, equating to 25% per year of, if less, 100% of the amount of the deferred tax

This penalty can be reduced if the tax payer is seen to co-operate with HMRC. The penalty itself must be paid within 30 days of received the notice; similarly any appeal must be made within 30 days.

Further, if accelerated payments are unpaid at the end of the payment period HMRC will impose a penalty of 5% of the amount, further penalties of 5% will be applied after 5 months and then again after 11 months.

At some point, very quickly for many, the math is academic, if one cannot pay then 10%, 1000%, the percentages are irrelevant.

Living life on the Edge
31st January 2014, 14:15
And, as you can tell from the tone of this on the Government website, they want it !

https://www.gov.uk/government/news/tax-avoiders-to-be-told-pay-now-as-government-demands-tax-owed-upfront

For me, this section from the website article goes to the nub of why people are furious:

"Currently, taxpayers must disclose that they are using an avoidance scheme. In doing so they accept that HMRC may challenge the scheme. These proposals to seek upfront payment will only apply where the scheme hits avoidance hallmarks. It is effectively an extension of the terms and conditions taxpayers may have to accept when deciding to use an avoidance scheme."

That would be fine if the taxpayers were able to accept those terms and conditions before entering the scheme, but to apply those terms and conditions up to 10 years after the event (in the case of DOTAS) is breathtaking in its arrogance and disdain for the rule of common law. What happened to the principle of certainty when making tax decisions? For this reason alone, the proposals cannot be allowed to pass into law.

eek
31st January 2014, 14:16
It is another thing but I am sure from your own experience it's a real prospect. It needs more than a lot of Tories to kill this bill off so let's hope the experience of BN66 will be sufficient to make them think long and hard before supporting this. I won't be holding my breath though!

The really issue here is how many MPs really want to answer very awkward questions regarding supporting tax dodgers at the next election....

While that may not be how people affected by this see themselves, that is the attack others will use. MPs without very solid majorities or choosing to retire are going to find voting against the government very very hard.....

And before anyone objects I'm not saying its fair (it ain't) what I'm saying is that the soundbites that people will hear are ones that make fighting the rules very difficult.

On a separate question do HMRC pursue fines down to the point of bankruptcy because those fines are scarily large....

LisaContractorUmbrella
31st January 2014, 14:43
The really issue here is how many MPs really want to answer very awkward questions regarding supporting tax dodgers at the next election....

While that may not be how people affected by this see themselves, that is the attack others will use. MPs without very solid majorities or choosing to retire are going to find voting against the government very very hard.....

And before anyone objects I'm not saying its fair (it ain't) what I'm saying is that the soundbites that people will hear are ones that make fighting the rules very difficult.

On a separate question do HMRC pursue fines down to the point of bankruptcy because those fines are scarily large....

Yes. Tax debt, bankruptcy and Special Relief « TaxAid (http://taxaid.org.uk/guides/tax-debt/bankruptcy)

LisaContractorUmbrella
31st January 2014, 14:52
The are some 'consequential amendments' :

Paragraph 35 provides that, whilst HMRC will normally repay any disputed tax it has received if the taxpayer is successful in litigation at any stage, they will not be obliged to do so if there is a reason to think that the revenue may be at risk and the matter is being appealed further.

So basically, even if you win you lose :eek

DonkeyRhubarb
31st January 2014, 14:56
"No man in this country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or to his property as to enable the Inland Revenue to put the largest possible shovel into his stores."

Ayrshire Pullman Motor Services v Ritchie v CIR CS 1929 14 TC 754, Lord Clyde.

This may have been true once but not anymore.

eek
31st January 2014, 15:02
Yes. Tax debt, bankruptcy and Special Relief « TaxAid (http://taxaid.org.uk/guides/tax-debt/bankruptcy)

Having read that ouch. very few get outs there


The are some 'consequential amendments' :

Paragraph 35 provides that, whilst HMRC will normally repay any disputed tax it has received if the taxpayer is successful in litigation at any stage, they will not be obliged to do so if there is a reason to think that the revenue may be at risk and the matter is being appealed further.

So basically, even if you win you lose :eek

Surely its the case that until any claim is decided upon by the upper tax tribunal they won't refund the money. So the implied threat is that everything will be appealed to the upper tribunal which is a hell of a delaying tactic...

eek
31st January 2014, 15:06
This may have been true once but not anymore.

+1. Hector is using the public's current dislike of / the publicity around big corporate tax avoiders to railroad through fundamental changes. They seem to have got their timing intentionally perfect....

Dylan
31st January 2014, 15:13
Think HMRC are unsecured creditors in the event of bankrupcy, ie the lowest status in terms of getting paid.

DonkeyRhubarb
31st January 2014, 15:15
+1. Hector is using the public's current dislike of / the publicity around big corporate tax avoiders to railroad through fundamental changes. They seem to have got their timing intentionally perfect....

Although the writing has been on the wall for while.

Some people back in 2008 said that BN66 was just a one-off...

lfcynwa
31st January 2014, 15:51
1) As it stands currently, if say HMRC has sent a bill for e.g £24k and appeal (EBT) fails, would it be possible to re-pay directly to HMRC at say £1000 per month for 2 years (plus interest) and would it incur penalty charges also !?

2) If above bill goes through does everything have to be paid within 90 days or can you offer a re-payment like I detail in item 1 above!?

Surely if appeal fails must be better for HMRC to have an agreement with each individual that can be paid rather than have to go bankrupt!?
:eek:

eek
31st January 2014, 16:19
1) As it stands currently, if say HMRC has sent a bill for e.g £24k and appeal (EBT) fails, would it be possible to re-pay directly to HMRC at say £1000 per month for 2 years (plus interest) and would it incur penalty charges also !?

2) If above bill goes through does everything have to be paid within 90 days or can you offer a re-payment like I detail in item 1 above!?

Surely if appeal fails must be better for HMRC to have an agreement with each individual that can be paid rather than have to go bankrupt!?
:eek:

2 would be reliant on good will from HMRC to avoid those penalty clauses being invoked. I think you would be better to find a loan, pay all the tax within the 90 days and then start paying that loan off....

3) HMRC will probably not mind a few people going bankrupt (and may publicize it as they do on the qt when celebs go that way). They want the money, they don't care about the subsequent pain (and loss of tax revenue) that it may cause....

lfcynwa
31st January 2014, 16:39
would be reliant on good will from HMRC to avoid those penalty clauses being invoked. I think you would be better to find a loan, pay all the tax within the 90 days and then start paying that loan off....

Is that the answer / suggestion only if the 90 day bill is passed? and yes appealing to goodwill....wish us luck!

malvolio
31st January 2014, 16:40
Think HMRC are unsecured creditors in the event of bankrupcy, ie the lowest status in terms of getting paid.
No, the sequence is the liquidators (if any), then HMRC, then secured creditors, then everyone else.

Most of these points would be a lot clearer if you work on the correct assumption that tax is HMG's money, not yours or YourCo's. How much tax that represents, of course, is a different question.

Saleos
31st January 2014, 17:02
Cojak

The failure notice provisions and DOTAS extension are not limited merely to those arrangements involving EBTs but would capture any arrangement where there has been a FTT decision (or higher) where HMRC believe the principles laid down in that decision would apply to the arrangements in question or anything that was, or should have been, disclosed in DOTAS.

So before anyone not involved in EBTs rests comfortably on laurels consider this.

In Arctic Systems the House of Lords found that there was a settlement: Mr & Mrs Jones escaped tax only because they also held that the gift of a share was more than a gift of capital and thus fell within the spousal exemption.

But it is wrong to assume that means that contractors in their own limited companies are free from worry or that HMRC might not seek to issue failure notices based on subsequent cases such as HMRC v Buck, HMRC v Bird, HMRC v Bingham where where that spousal exemption was not a saviour.

I make this point merely to highlight that it is wrong to brush this aside as merely an issue for those in EBTs. The accelerated payment provisions will give HMRC great powers to force taxpayers to pay any tax under dispute by subjectively applying failure notices based on cases that you or I may not think immediately relevant. Remember under the proposals taxpayers have NO right of appeal when issued with a failure (or follower as the consultation document calls them) notice.




There was a debate on this thread last night which I have moved to http://forums.contractoruk.com/accounting-legal/63073-loans-ebts-other-trusts-17.html

If you want to continue the debate, do it there. Any further debate here will be removed and sanctions may be deployed.

Saleos
31st January 2014, 17:07
I think you fail to point out that many on this forum were in arrangements BEFORE Part 7A ITEPA 2003 was introduced.

I agree that after 9 Dec 2010 EBT schemes are highly likely to be caught by the disguised remuneration rules but those provisions DO NOT apply to loans made before that date (unless something further is done to create a relevant step).




The Rangers case is significant and is not currently an HMRC victory but, regardless, the disguised remuneration legislation will apply to loans through EBT's:

The legislation applies where (s 554A):

there is an arrangement which relates to an existing, former or prospective employee;
it is, in essence, a means of providing rewards, recognition or loans in connection with employment;
the 'relevant third party' operating the arrangement takes a 'relevant step; and
it is reasonable to suppose that, in essence, the step is pursuant to the arrangement or there is some other connection between them.
When the legislation applies, the value of the cash or assets which are the subject of the 'relevant step' is treated as employment income (s 554Z2), subject to PAYE and NIC (s 687A and s 695A).

cojak
31st January 2014, 17:49
Cojak

The failure notice provisions and DOTAS extension are not limited merely to those arrangements involving EBTs but would capture any arrangement where there has been a FTT decision (or higher) where HMRC believe the principles laid down in that decision would apply to the arrangements in question or anything that was, or should have been, disclosed in DOTAS.

So before anyone not involved in EBTs rests comfortably on laurels consider this.

In Arctic Systems the House of Lords found that there was a settlement: Mr & Mrs Jones escaped tax only because they also held that the gift of a share was more than a gift of capital and thus fell within the spousal exemption.

But it is wrong to assume that means that contractors in their own limited companies are free from worry or that HMRC might not seek to issue failure notices based on subsequent cases such as HMRC v Buck, HMRC v Bird, HMRC v Bingham where where that spousal exemption was not a saviour.

I make this point merely to highlight that it is wrong to brush this aside as merely an issue for those in EBTs. The accelerated payment provisions will give HMRC great powers to force taxpayers to pay any tax under dispute by subjectively applying failure notices based on cases that you or I may not think immediately relevant. Remember under the proposals taxpayers have NO right of appeal when issued with a failure (or follower as the consultation document calls them) notice.

Then I suggest you post a summary of the issues at stake in the Accounting/Legal forum, in a manner to interest those not in EBTs, as most posters won't bother reading anything in this forum.

IR35 is what interests most on here - look at the issue from that pov.

Dylan
31st January 2014, 18:02
No, the sequence is the liquidators (if any), then HMRC, then secured creditors, then everyone else.

Unless I'm reading this wrong you are 10 years out of date.

Final Distribution and application of assets in bankruptcy cases (http://www.insolvencydirect.bis.gov.uk/technicalmanual/Ch25-36/Chapter%2036A/Part%206/Part%206.htm#36A.106)

Specifically "Abolition of crown preference and remaining preferential creditors"

and

"HMRC are non-preferential ordinary unsecured creditors"

varunksingh
31st January 2014, 18:44
Great Post Saleos. Anyone and everyone will get affected by this. I don't think anywhere in world a Tax department has these kind of powers. It plainly give HMRC enormous powers to collect tax which they think is due at short notice from anyone.

Also no advantage in being legal as laws can change retrospectively whenever required by the government. Instead of declaring everything to HMRC and giving them enough time to act, they are encouraging those scheme providers who never used DOTAS and kept things hanky-panky.

"Injustice anywhere is a threat to justice everywhere" - Martin Luther King Jr

malvolio
31st January 2014, 19:06
Unless I'm reading this wrong you are 10 years out of date.

Final Distribution and application of assets in bankruptcy cases (http://www.insolvencydirect.bis.gov.uk/technicalmanual/Ch25-36/Chapter%2036A/Part%206/Part%206.htm#36A.106)

Specifically "Abolition of crown preference and remaining preferential creditors"

and

"HMRC are non-preferential ordinary unsecured creditors"
Hmmm... I will bow to expert opinion of course, but if the bankruptcy is driven by a need to pay a tax bill, are you certain that isn't classified as an "expense" of the bankruptcy?

varunksingh
31st January 2014, 19:24
1) When will we know the final text of the law - Apr 14 or Jul 14.
2) If approved, when will HMRC start sending out "failure notices" - Apr 14 or Jul 14
3) Will it be possible to take HMRC to court on this and get a stay until court decides if what they have proposed / approved by parliament is legal or not

Dylan
31st January 2014, 19:35
Hmmm... I will bow to expert opinion of course, but if the bankruptcy is driven by a need to pay a tax bill, are you certain that isn't classified as an "expense" of the bankruptcy?

I thought the expenses were those of the court and receiver, I may be wrong, not an expert.

If you were right but the individual files for bankruptcy before HMRC do on their behalf then I still think they'd be near the bottom of the list.

DonkeyRhubarb
31st January 2014, 19:39
1) When will we know the final text of the law - Apr 14 or Jul 14.
2) If approved, when will HMRC start sending out "failure notices" - Apr 14 or Jul 14
3) Will it be possible to take HMRC to court on this and get a stay until court decides if what they have proposed / approved by parliament is legal or not

The final text should be available March/April.

It will be debated by MPs in the Parliamentary Finance Bill Committee in May.

The Bill will get royal assent in July, after which HMRC could start issuing notices.

varunksingh
31st January 2014, 19:51
And can it be taken to Court requesting Court decides whether it is legal or not before HMRC starts?

TheDandy
31st January 2014, 20:01
And can it be taken to Court requesting Court decides whether it is legal or not before HMRC starts?

If what is legal or not?

malvolio
31st January 2014, 20:04
And can it be taken to Court requesting Court decides whether it is legal or not before HMRC starts?
If it's a law passed by Parliament and given the Royal Assent, you might have a problem proving it to be illegal...

DonkeyRhubarb
31st January 2014, 20:10
If it's a law passed by Parliament and given the Royal Assent, you might have a problem proving it to be illegal...

WHS

varunksingh
31st January 2014, 20:11
If it's a law passed by Parliament and given the Royal Assent, you might have a problem proving it to be illegal...

1) Whether it is legal or not to apply it retrospectively. For example UKBA lost in court when they change immigration laws retrospectively. Here they are changing how DOTAS is acted up and applying it to old existing cases. All DOTAS schemes are being declared that they did not work and tax payers will be required to pay. Only if tax payer is able take HMRC to court, exhaust all appeal options only than money will be given back.

2) Failure notice provisions and DOTAS extension MIGHT be against the natural justice. In affect HMRC is punishing tax payer even before Tax payer has been proven guilty. From one of the earlier posts
"
"No man in this country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or to his property as to enable the Inland Revenue to put the largest possible shovel into his stores."
Ayrshire Pullman Motor Services v Ritchie v CIR CS 1929 14 TC 754, Lord Clyde.
"

varunksingh
31st January 2014, 20:14
WHS

WHS means?

TheDandy
31st January 2014, 20:19
1) Whether it is legal or not to apply it retrospectively. For example UKBA lost in court when they change immigration laws retrospectively. Here they are changing how DOTAS is acted up and applying it to old existing cases. All DOTAS schemes are being declared that they did not work and tax payers will be required to pay. Only if tax payer is able take HMRC to court, exhaust all appeal options only than money will be given back.

2) Failure notice provisions and DOTAS extension MIGHT be against the natural justice. In affect HMRC is punishing tax payer even before Tax payer has been proven guilty. From one of the earlier posts
"
"No man in this country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or to his property as to enable the Inland Revenue to put the largest possible shovel into his stores."
Ayrshire Pullman Motor Services v Ritchie v CIR CS 1929 14 TC 754, Lord Clyde.
"

That's all well and good and perfectly reasoned arguments, but it doesn't change the fundamental purpose of this legislation and that's to get the money in first in an unfettered way. Sure you can run the court process from different angles if you want, but whichever line of tack you take, it will take forever to get a resolution one way or another. In the meantime your money will be theirs in practical reality and you'll have little chance of getting it back. You have to hope that a swathe of backbenchers throw a fit on this!

TheDandy
31st January 2014, 20:20
WHS means?

What he said!

ScottW
31st January 2014, 23:01
That's all well and good and perfectly reasoned arguments, but it doesn't change the fundamental purpose of this legislation and that's to get the money in first in an unfettered way. Sure you can run the court process from different angles if you want, but whichever line of tack you take, it will take forever to get a resolution one way or another. In the meantime your money will be theirs in practical reality and you'll have little chance of getting it back. You have to hope that a swathe of backbenchers throw a fit on this!

So if this is the way HMRC are approaching it are we seriously being told we need to pay what we are told regardless of their calculations being clearly wrong and in many cases stupidly so?

Is there any value in querying the sums and asking for calculations so the figures can actually be correct even though actual payment is disputed and appeals currently lodged.

If the figures are clearly stupidly incorrect and payment is still insisted then the simple thing to do for many is simply leave the country.

Seriously.

eek
31st January 2014, 23:42
So if this is the way HMRC are approaching it are we seriously being told we need to pay what we are told regardless of their calculations being clearly wrong and in many cases stupidly so?

Is there any value in querying the sums and asking for calculations so the figures can actually be correct even though actual payment is disputed and appeals currently lodged.

If the figures are clearly stupidly incorrect and payment is still insisted then the simple thing to do for many is simply leave the country.

Seriously.

Well you have until July / August to get the calculations correct because that is when they will send the bills and then 90 days from that to pay them.

But as I said earlier today and it became far clearer in the pub tonight this will become law. No MP is going to argue against this with an election coming up (HMRC are striking when the iron is hot).

malvolio
1st February 2014, 00:09
So if this is the way HMRC are approaching it are we seriously being told we need to pay what we are told regardless of their calculations being clearly wrong and in many cases stupidly so?

Is there any value in querying the sums and asking for calculations so the figures can actually be correct even though actual payment is disputed and appeals currently lodged.

If the figures are clearly stupidly incorrect and payment is still insisted then the simple thing to do for many is simply leave the country.

Seriously.
Jeez, get real. If it is incorrect, and you can prove it, then you get it back in reasonably short order plus statutory interest at something above commercial rates. A minor hiccup in the annual cash flow, that's all.

Of course, if you can't prove it...

rufusTfirefly
1st February 2014, 00:32
Well you have until July / August to get the calculations correct because that is when they will send the bills and then 90 days from that to pay them

So they will be sending 16000 "bills" out in July / August ?

ScottW
1st February 2014, 00:42
Jeez, get real. If it is incorrect, and you can prove it, then you get it back in reasonably short order plus statutory interest at something above commercial rates. A minor hiccup in the annual cash flow, that's all.

Of course, if you can't prove it...

OK - that's fair enough - although surely it would make sense to ensure the demand was a least correct even if appealed.

Recent reading of some posts would seem to indicate HMRC would have the right to demand your first born and you may not see them again till their 18th birthday.

A bit like sending your kids to Eton......

ramzanamin
1st February 2014, 01:05
Jeez, get real. If it is incorrect, and you can prove it, then you get it back in reasonably short order plus statutory interest at something above commercial rates. A minor hiccup in the annual cash flow, that's all.

Of course, if you can't prove it...

How would you get it back in short order when the ligislation suggests otherwise?

malvolio
1st February 2014, 08:01
How would you get it back in short order when the ligislation suggests otherwise?No it doesn't. It's talking about "disputed" tax. Prove them wrong and it's no longer disputed and no longer tax.

IF you 're going to argue the point, at least understand the questions.

DonkeyRhubarb
1st February 2014, 09:06
So they will be sending 16000 "bills" out in July / August ?

Probably not all in July/August but any time from July onwards.

And, by the way, it will be a lot more than 16,000.

The number of users in the table on page 7 comes to a total of 42,800.

HMRC will be looking to use this proposal to target as many of the 65,000 open cases as possible.

Contract Crusader
1st February 2014, 13:33
This is probably required reading if you have an open tax enquiry under Section 9A TMA 1970:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/275070/Tackling_marketed_tax_avoidance.pdf

<admin note>Just fixed the pdf link - the HTML version can be viewed two posts down...</admin note>


Michael you have mentioned Section 9A TMA 1970 but what about Section 29? Would this still apply?

varunksingh
1st February 2014, 14:04
As Saleos pointed out that this is much larger than only EBTs and DOTAS, I have emailed and requested organizations like PCG, CIOT, CBI and IoD to get involved. I have given details of my limited company and I guess if enough business owners get in touch with various bodies then they will get involved.

cojak
1st February 2014, 14:17
As Saleos pointed out that this is much larger than only EBTs and DOTAS, I have emailed and requested organizations like PCG, CIOT, CBI and IoD to get involved. I have given details of my limited company and I guess if enough business owners get in touch with various bodies then they will get involved.

How much larger? What other tax planning activities do you think will be affected?

TheDandy
1st February 2014, 14:30
As Saleos pointed out that this is much larger than only EBTs and DOTAS, I have emailed and requested organizations like PCG, CIOT, CBI and IoD to get involved. I have given details of my limited company and I guess if enough business owners get in touch with various bodies then they will get involved.

On what basis should they get involved? They may have an opinion, and they may already be contributing responses to a wide range of proposals, but none of these organisations I imagine would have any interesting in arguing against the measures outlined for 'Aggressive Tax Avoidance' schemes. In fact it would be in PCG's interest to support the measures if anything.

I think what you are generally alluding to is the fact that it does not preclude the use of the legislation in other areas (quite possibly), and in principal raises the question 'who's next'; is the thin end of a very large wedge!

If it has wider implications then at this stage it is no more than 'degrees of risk' for other, as at this point unidentified targets. I personally think you should not divert too much of your attention to this. Work on the basis that it will be passed and focus on the implications of it getting passed - those things you can control or do your best to plan for.

MrO666
1st February 2014, 14:40
I think all in all this legislation will get the green light at some level. Perhaps HMRC won't get everything they're asking for, but I can't see them getting none of it at all.

One thing that I will be stating in my consultation response is this:

In the case of HMRC being in possession of all facts (P11D, P60, Self assessment etc), then they should be duty bound to base ANY assessment on fact and not fabricated figures.

For HMRC to be able to pick any number from the air and demand you pay it on account, is in my opinion the bigger issue here. Both assessments I'm in receipt of are incorrect, despite HMRC being in full possession of everything they need to give me a very accurate assessment. They just appear to be too lazy to do so.

varunksingh
1st February 2014, 15:06
How much larger? What other tax planning activities do you think will be affected?

I am not an accountant so cannot be 100% sure but to me it looks like anyone under Section 9A TMA 1970 could get affect IF NOT MORE

cojak
1st February 2014, 15:17
I am not an accountant so cannot be 100% sure but to me it looks like anyone under Section 9A TMA 1970 could get affect IF NOT MORE

I've googled that and what I get is this:


This may indicate a fairly routine enquiry, which can be resolved by the production of supporting records. However, it could also be the prelude to more serious investigations under the COP 8 or COP 9 procedures if HMRC suspect there is evidence of tax avoidance or tax fraud.

But I'll put that point in the generic EBT thread.

TheDandy
1st February 2014, 15:21
I think all in all this legislation will get the green light at some level. Perhaps HMRC won't get everything they're asking for, but I can't see them getting none of it at all.

One thing that I will be stating in my consultation response is this:

In the case of HMRC being in possession of all facts (P11D, P60, Self assessment etc), then they should be duty bound to base ANY assessment on fact and not fabricated figures.

For HMRC to be able to pick any number from the air and demand you pay it on account, is in my opinion the bigger issue here. Both assessments I'm in receipt of are incorrect, despite HMRC being in full possession of everything they need to give me a very accurate assessment. They just appear to be too lazy to do so.

The fact that the estimate is wrong on your P11D is not the big issue at all. That can be resolved by furnishing them with details required to make an accurate assessment of what 'THEY' think is at risk. Co-operating in that way does not mean you are saying that you agree that tax is due.

varunksingh
1st February 2014, 15:25
On what basis should they get involved? They may have an opinion, and they may already be contributing responses to a wide range of proposals, but none of these organisations I imagine would have any interesting in arguing against the measures outlined for 'Aggressive Tax Avoidance' schemes. In fact it would be in PCG's interest to support the measures if anything.

I think what you are generally alluding to is the fact that it does not preclude the use of the legislation in other areas (quite possibly), and in principal raises the question 'who's next'; is the thin end of a very large wedge!

If it has wider implications then at this stage it is no more than 'degrees of risk' for other, as at this point unidentified targets. I personally think you should not divert to much of your attention to this. Work on the basis that it will be passed and focus on the implications of it getting passed - those things you can control or do your best to plan for.

PCG should get involved because tomorrow it might come to my Ltd Company in which my Spouse is a partner. I am just trying to bring it to their attention. HMRC should confirm that this legislation preclude other areas. From what I have read I cannot see that.

I have 100% started working on the assumption that this will be passed. Save every penny and earn as much as possible. My spouse is also trying to restart working back to help us get through. We will give it our best shot and pay as much as possible. If they demand all they would claim I own over 5 years of using these schemes, we will not be able to pay but I will try and do my best to pay up.

But at the same time I don't want to back off and forget about all this once paid. I am hoping all affected will stand together and fight it. Rangers UTT hearing will finish in Mar and result should be out between Aug - Nov. Other EBT cases must also be in court and depending on how they go will clear quite a bit. Problem is all affected will still have to fight HMRC. For eg. Boyle's decision in FTT also mentioned about DOTAS disclosure in return and time limits which should apply. HMRC are out of time for 09/10 but will ignore it unless challenged in Tribunal once they have the tax collected. Thus the need for all affected to ensure they stick together for this long drawn battle to get our money back.

In my response to consultation I will stress that HMRC should be also liable for consequential costs which I will bear trying to pay this - they agree or not different story. Rest assured if the tax is due I will pay it instead of going bankrupt - it will not be easy but tax is my responsibility and I will take it up proudly. I am only against HMRC stopping me being as efficient with my tax planning as law allows. Tax is my duty but tax planning is my right as well. And based on these arguments all tax payers should be involved. What HMRC is doing just against natural justice. Retrospective law affected many in 2008, now it is going to affect many more and in future it will affect more if tax payer do not stand against it.

cojak
1st February 2014, 15:29
PCG should get involved because tomorrow it might come to my Ltd Company in which my Spouse is a partner. I am just trying to bring it to their attention. HMRC should confirm that this legislation preclude other areas. From what I have read I cannot see that.

I have 100% started working on the assumption that this will be passed. Save every penny and earn as much as possible. My spouse is also trying to restart working back to help us get through. We will give it our best shot and pay as much as possible. If they demand all they would claim I own over 5 years of using these schemes, we will not be able to pay but I will try and do my best to pay up.

But at the same time I don't want to back off and forget about all this once paid. I am hoping all affected will stand together and fight it. Rangers UTT hearing will finish in Mar and result should be out between Aug - Nov. Other EBT cases must also be in court and depending on how they go will clear quite a bit. Problem is all affected will still have to fight HMRC. For eg. Boyle's decision in FTT also mentioned about DOTAS disclosure in return and time limits which should apply. HMRC are out of time for 09/10 but will ignore it unless challenged in Tribunal once they have the tax collected. Thus the need for all affected to ensure they stick together for this long drawn battle to get our money back.

In my response to consultation I will stress that HMRC should be also liable for consequential costs which I will bear trying to pay this - they agree or not different story. Rest assured if the tax is due I will pay it instead of going bankrupt - it will not be easy but tax is my responsibility and I will take it up proudly. I am only against HMRC stopping me being as efficient with my tax planning as law allows. Tax is my duty but tax planning is my right as well. And based on these arguments all tax payers should be involved. What HMRC is doing just against natural justice. Retrospective law affected many in 2008, now it is going to affect many more and in future it will affect more if tax payer do not stand against it.

My guess is they'll only be interested if it involves IR35 investigations (which all I'm concerned about).

Anyway, I've thrown the question out to the wider audience.

TheDandy
1st February 2014, 15:47
PCG should get involved because tomorrow it might come to my Ltd Company in which my Spouse is a partner. I am just trying to bring it to their attention. HMRC should confirm that this legislation preclude other areas. From what I have read I cannot see that.

I have 100% started working on the assumption that this will be passed. Save every penny and earn as much as possible. My spouse is also trying to restart working back to help us get through. We will give it our best shot and pay as much as possible. If they demand all they would claim I own over 5 years of using these schemes, we will not be able to pay but I will try and do my best to pay up.

But at the same time I don't want to back off and forget about all this once paid. I am hoping all affected will stand together and fight it. Rangers UTT hearing will finish in Mar and result should be out between Aug - Nov. Other EBT cases must also be in court and depending on how they go will clear quite a bit. Problem is all affected will still have to fight HMRC. For eg. Boyle's decision in FTT also mentioned about DOTAS disclosure in return and time limits which should apply. HMRC are out of time for 09/10 but will ignore it unless challenged in Tribunal once they have the tax collected. Thus the need for all affected to ensure they stick together for this long drawn battle to get our money back.

In my response to consultation I will stress that HMRC should be also liable for consequential costs which I will bear trying to pay this - they agree or not different story. Rest assured if the tax is due I will pay it instead of going bankrupt - it will not be easy but tax is my responsibility and I will take it up proudly. I am only against HMRC stopping me being as efficient with my tax planning as law allows. Tax is my duty but tax planning is my right as well. And based on these arguments all tax payers should be involved. What HMRC is doing just against natural justice. Retrospective law affected many in 2008, now it is going to affect many more and in future it will affect more if tax payer do not stand against it.

Yes they should be cautious, and vigilant, as should everyone with regard to how it feasibly could impact them. That may result in a more detailed clarification in the final bill regarding its purpose, which would be no bad thing given past experiences (if we are to be educated on the 'spirit of the law' then it follows that government bodies should lead by example). However don't expect PCG's interest to extend to a blanket cull of the legislation as it proposes to apply to DOTAS.

EveryMoveCalculated
1st February 2014, 15:58
Hi all,
Probably a stupid question but who are NTRT?
I'm interested in contacting them....

cojak
1st February 2014, 16:00
Hi all,
Probably a stupid question but who are NTRT?
I'm interested in contacting them....

http://forums.contractoruk.com/accounting-legal/77944-no-retro-tax-campaign-against-section-58-finance-act-2008-a.html

malvolio
1st February 2014, 16:02
Yes they should be cautious, and vigilant, as should everyone with regard to how it feasibly could impact them. That may result in a more detailed clarification in the final bill regarding its purpose, which would be no bad thing given past experiences (if we are to be educated on the 'spirit of the law' then it follows that government bodies should lead by example). However don't expect PCG's interest to extend to a blanket cull of the legislation as it proposes to apply to DOTAS.
PCG are taking an interest. Why wouldn't they?

cojak
1st February 2014, 16:02
My guess is they'll only be interested if it involves IR35 investigations (which all I'm concerned about).

Anyway, I've thrown the question out to the wider audience.

And the wider audience quickly replied "No, it doesn't".

TheDandy
1st February 2014, 16:32
PCG are taking an interest. Why wouldn't they?

That's what I have said isn't it? Merely saying I don't think they would be too interested in objecting to the measures to tackle schemes referred under DOTAS. Why would they?

handyandy
1st February 2014, 16:33
Basically from what I'm reading here and in the consultation document anyone who put a DOTAS number onto their return and have had an inquiry opened (I think adding a DOTAS number automatically triggered an inquiry under COP8) will now get a follower/failure notice (regardless of whether a test case has been through the tribunal/court system) and then a revised assessment of tax due.

Looks like the words of Sir Richard Motram are relevant here...

''We're all f*cked. I'm f*cked. You're f*cked. The whole department is f*cked. It's the biggest cock-up ever. We're all completely f*cked.' :igmc:

varunksingh
1st February 2014, 16:46
And the wider audience quickly replied "No, it doesn't".

I hope they are correct as last thing I want is my current Limited company getting in trouble as well. Saleos gave example of multiple cases which HMRC can pick up against Spouse being partner in business and serve a "follower notice". It is not IR35 but will affect a lot of contractors (and may be others) running limited companies unless it is specifically excluded in final text of this Law. A QC or lawyer will only be able to confirm the extent to where these powers can be used.

And what is to stop HMRC deciding in 4 years time to include the Limited companies who have spouses as partners as they are doing with DOTAS.

Many much better and learned brains out here than me but people are focusing on DOTAS and EBT when reading this. In principal this will give HMRC powers which they can use in other circumstances. They should exclude other case, narrow the scope and give assurance in law to not apply this elsewhere.

2008 set a precedence for retrospective law and this is extending it and why will it stop here? Operating under a Limited company is working out to be same if not better than EBT schemes based on tax you pay but somehow at this moment we feel this is only for EBTs! Are we sure?

If we are sure it is good news as I can continue to run my limited company and pay this off - But I very much doubt that if this is passed similar rule will not come back for Limited companies because similar to EBTs by running a limited company I am not paying same PAYE as a permanent employee.

varunksingh
1st February 2014, 16:59
...

''We're all f*cked. I'm f*cked. You're f*cked. The whole department is f*cked. It's the biggest cock-up ever. We're all completely f*cked.' :igmc:

and HMRC enjoy F*ckfests and more will be invited in due course to join. First invitation for f*ckfest start in 2008 - ask NTRT members. Myself included all thought it is not our problem until I was invited to join in as well. F*ucked we r and long will it continue!:suicide:

TheDandy
1st February 2014, 17:04
Operating under a Limited company is working out to be same if not better than EBT schemes based on tax you pay but somehow at this moment we feel this is only for EBTs! Are we sure?



Careful there - the treasury may just take your statement literally - next Ltd Cos will be considered Aggressive Tax Avoidance structures. I take your point but I'm not sure I would have put it like that.

ScottW
1st February 2014, 17:17
All in all it makes me question whether its really worth it.

If HMRC are given the right to basically claim what they like, when they like, and retrospectively backdate it to whenever they feel like (an over simplification I know but I can't be the only one who thinks we're not far of it) - then really, what is the point?

Future years of wondering if HMRC will change the rules and move the goalposts again and again and again.

I can't be the only one for the off...........

varunksingh
1st February 2014, 17:19
Careful there - the treasury may just take your statement literally - next Ltd Cos will be considered Aggressive Tax Avoidance structures. I take your point but I'm not sure I would have put it like that.

I don't think it matter what I write or say here but Moderator is well come to delete my post if it can harm anyone.

cojak
1st February 2014, 17:30
I don't think it matter what I write or say here but Moderator is well come to delete my post if it can harm anyone.

Why would it harm anyone? Everyone has their own idea of running their own company and I'm sure yours is different to mine.

varunksingh
1st February 2014, 18:01
Why would it harm anyone? Everyone has their own idea of running their own company and I'm sure yours is different to mine.

Agree. I had 10 other reasons for joining an EBT. Does HMRC care? Similarly I have 10 reasons to run my limited company. Will HMRC care?

varunksingh
1st February 2014, 18:04
All in all it makes me question whether its really worth it.

If HMRC are given the right to basically claim what they like, when they like, and retrospectively backdate it to whenever they feel like (an over simplification I know but I can't be the only one who thinks we're not far of it) - then really, what is the point?

Future years of wondering if HMRC will change the rules and move the goalposts again and again and again.

I can't be the only one for the off...........

I know it might all not be worth it but I will try what I can. If I take it lying it does not make it better. And who knows I might be able to move the needle wee little bit. For sure if all will try, it will make a diff.

TheDandy
1st February 2014, 20:30
I don't think it matter what I write or say here but Moderator is well come to delete my post if it can harm anyone.

Sorry it was meant in jest (tongue in cheek comment)!

eek
1st February 2014, 21:06
Agree. I had 10 other reasons for joining an EBT. Does HMRC care? Similarly I have 10 reasons to run my limited company. Will HMRC care?

Just ten reasons? most EBT users had 10-20,000+ reasons....

Also limited companies are not going to be impacted by this real. IR35 is virtually the only means of attacking service companies without impacting other limited companies and no government will want to do that....

You seem to be randomly spreading ideas round without any basis in reality words and law.... Having shot down the idea that Section 9a covers limited companies (and it doesn't 9a is for the self employed and individual tax payers) is there any other unsubstantiated rubbish that you want me to shoot down with actual evidence.....

turnover
1st February 2014, 21:30
Just ten reasons? most EBT users had 10-20,000+ reasons....

Also limited companies are not going to be impacted by this real. IR35 is virtually the only means of attacking service companies without impacting other limited companies and no government will want to do that....

You seem to be randomly spreading ideas round without any basis in reality words and law.... Having shot down the idea that Section 9a covers limited companies (and it doesn't 9a is for the self employed and individual tax payers) is there any other unsubstantiated rubbish that you want me to shoot down with actual evidence.....

Hello eek - I know your point is valid and you are stating the reality of the situation but all that varuksingh is trying to do is to highlight in his and many other's view that this is unfair. He is not alone in this view. Though 65,000 people are potentially impacted many of these people have families/relatives who will be impacted and will lose homes, lose jobs and will not be able to get jobs again in certain sectors, made bankrupt and maybe take their own lives with all the stress. Many of the people affected are already suffering health issues and marriages/relationships are under strain. This retrospective legislation will only make things worse. Not that HMRC care about this. I reckon you're talking around 250,000 that will be touched in some form as a result of this.

Varuk, However the reality is as of today this legislation will go through and the only hope is that it gets watered down in some form. In the meantime everyone needs to prepare for the worst. I know from your previous mails you are doing so.

Saw this:

HMRC Tax Planning Proposals Could Drive Promoters Offshore | The Economic Voice (http://www.economicvoice.com/hmrc-proposals-on-tax-planning-could-drive-more-promoters-offshore/)

varunksingh
1st February 2014, 23:22
Eek go back and read saleos post and tell me how u r sure that it is not going to affect Ltd co. If people don't want to see it then other matter. I'll stop arguing on this point.

varunksingh
1st February 2014, 23:28
Copy paste from his post:
"
In Arctic Systems the House of Lords found that there was a settlement: Mr & Mrs Jones escaped tax only because they also held that the gift of a share was more than a gift of capital and thus fell within the spousal exemption.

But it is wrong to assume that means that contractors in their own limited companies are free from worry or that HMRC might not seek to issue failure notices based on subsequent cases such as HMRC v Buck, HMRC v Bird, HMRC v Bingham where where that spousal exemption was not a saviour.

I make this point merely to highlight that it is wrong to brush this aside as merely an issue for those in EBTs. The accelerated payment provisions will give HMRC great powers to force taxpayers to pay any tax under dispute by subjectively applying failure notices based on cases that you or I may not think immediately relevant. Remember under the proposals taxpayers have NO right of appeal when issued with a failure (or follower as the consultation document calls them) notice."

What percentage of Contractor limited companies are run together by husband wife teams? And how r they protected. Idea here is not to argue or spread rubbish which someone has to shoot down. Idea is discuss and correct each other's understanding if one is wrong. Explain the rational against above and I will stand corrected.

cojak
2nd February 2014, 09:48
Eek go back and read saleos post and tell me how u r sure that it is not going to affect Ltd co. If people don't want to see it then other matter. I'll stop arguing on this point.

If Saleos wants to post how this affects Ltds regarding IR35, (which what the readership of this forum is mainly interested in) he is welcome to do so.

There are a few who may be affected by spouse share-splitting, but most of us don't do that and so don't care so much.

In the meantime, it does not affect Ltds because Section 9a relates to sole traders and Individuals see https://www.pcg.org.uk/tax-investigation-faq

(Oh, and while you continue to push the Ltd angle, I will continue to allow eek to repudiate it.)

DonkeyRhubarb
2nd February 2014, 10:15
consultation document | Let (http://blogs.mazars.com/letstalktax/tag/consultation-document)

Untitled Document (http://www.pinsentmasons.com/Documents/e-bulletin/tax/2014-01-29.html)

eek
2nd February 2014, 11:53
But it is wrong to assume that means that contractors in their own limited companies are free from worry or that HMRC might not seek to issue failure notices based on subsequent cases such as HMRC v Buck, HMRC v Bird, HMRC v Bingham where where that spousal exemption was not a saviour.

I make this point merely to highlight that it is wrong to brush this aside as merely an issue for those in EBTs.

Taking the last point first. No EBT are on the dubious side of tax law. Always have been, always will be especially when the people using them are directly earning the money going into and out of them.

Now lets look at the examples you quote without details to show why you are wrong

Buck V HMRC



Husband held 9999 shares and wife 1 share in jointly owned company. The husband waived any right to dividends. In 1999 the directors declared a dividend of £35k per share to be paid out of reserves of around £46k. A similar arrangement was made in 2000. It was noted that the company had insufficient reserves to pay dividends of this magnitude as without the waiver the company would have required some £300m of reserves.

The Commissioner held that the waiver arrangement fell within the definition of settlement in S660G(1) ICTA 1988 and that it arose from property in which the husband had an interest. The exclusion offered by S660A(6) ICTA 1988 did not apply as there was no outright gift, merely a one-off waiver.



The waived dividend was clearly designed to dodge tax, not reflect the risk of being a contractor.

Mr P A and Mrs F J Bird v HMRC (SpC 720)


An allotment of shares in a company then owned by a husband and wife was made to minor children at par and dividends subsequently paid. The allotment gave the children a 60% holding in the company.

The Commissioner found that this was an arrangement within the scope of the taxation of settlor provisions and that the dividend income of the children resulting was properly assessable as income of their parents.

Not exactly a common state of affairs...

AJ Bingham v HMRC TC02528 - this is more recent but its worth reading here (http://www.rossmartin.co.uk/index.php/private-client-a-estate-planning/1081-joint-income-splitting-income-within-the-family)

Here the money was split multiple ways between husband, wife and children) ending up in accounts still controlled by the husband / father... The income split also differed year on year to reflect changes in other income and explicitly minimize the tax paid.

Not one of the examples you give relates directly to the Arctic case. Its all (blooming stupid) variations (two of which include children) to minimize tax paid...

Are there any other cases you would like to quote for me to repute and allow me to continue making you out to be the tax avoiding trolling scaremongerer you appear to be.

varunksingh
2nd February 2014, 13:17
Are there any other cases you would like to quote for me to repute and allow me to continue making you out to be the tax avoiding trolling scaremongerer you appear to be.

I would have discussed further if it was not name calling. Like you, HMRC has declared myself and 65000 like me to be criminals and make it look like retrospective legislation will only apply here and NEVER AGAIN, ESPECIALLY TO LTD Cos.

So instead of wasting my time with you, it is better I work hard and prepare to pay HMRC. Courts will prove later. If I have done wrong I will correct it. And if courts later prove I have not, gr8. So no more on this topic after this from my side.

eek
2nd February 2014, 13:45
I would have discussed further if it was not name calling. Like you, HMRC has declared myself and 65000 like me to be criminals and make it look like retrospective legislation will only apply here and NEVER AGAIN, ESPECIALLY TO LTD Cos.

So instead of wasting my time with you, it is better I work hard and prepare to pay HMRC. Courts will prove later. If I have done wrong I will correct it. And if courts later prove I have not, gr8. So no more on this topic after this from my side.

I don't think describing you as a trolling scaremonger is unfair or unjust. You didn't understand the differences around Section 9a (scaring some rational posters with your false information) followed by a secondary attack using incorrectly specified tribunal cases without the details that showed why they were lost (only 1 was an S660 case and no rational person would think that dividend waiver was anything other than a tax dodgy). Everything you posted was inaccurate and wrong, so calling you a troll is fair (you wanted a response) and scaremongering is also fair (you posted inaccurate information to scare people).

As for HMRC calling people criminals, they haven't. What they are saying is that they want the tax money owed sooner rather than later. And its not like the SN66 people (I feel sorry for) who used legitimate tax plans of the time (only for HMRC to decide that they wouldn't lose by trying to retrospectively change the law to catch them out). Your case is one where HMRC are legitimately winning case after case, and so feel they shouldn't have to wait until being paid.

varunksingh
2nd February 2014, 14:44
I don't think describing you as a trolling scaremonger is unfair or unjust. You didn't understand the differences around Section 9a (scaring some rational posters with your false information) followed by a secondary attack using incorrectly specified tribunal cases without the details that showed why they were lost (only 1 was an S660 case and no rational person would think that dividend waiver was anything other than a tax dodgy). Everything you posted was inaccurate and wrong, so calling you a troll is fair (you wanted a response) and scaremongering is also fair (you posted inaccurate information to scare people).

As for HMRC calling people criminals, they haven't. What they are saying is that they want the tax money owed sooner rather than later. And its not like the SN66 people (I feel sorry for) who used legitimate tax plans of the time (only for HMRC to decide that they wouldn't lose by trying to retrospectively change the law to catch them out). Your case is one where HMRC are legitimately winning case after case, and so feel they shouldn't have to wait until being paid.

I guess being quite might give a wrong signal. So let it continue.

Can you please tell me which case HMRC are legitimately winning case after case? If you cannot then I guess all names you have given me will apply back. But what I would request is lets discuss and If I am wrong then please correct me instead of calling names. I am not fighting here. Will accept my mistake if I am wrong with you and with HMRC as well. If I have to sell myself and pay RIGHTFUL tax I would. I am not saying that.

Recent cases from HMRC in news are
1) Boyle - Which was not even an EBT, Forex even did not exist but should apply to ALL EBTs as per HMRC!
2) AAM - Giving Bonues through EBT to companies in individual names with full access to those funds by those company directors. But it should apply to ALL EBTs as per HMRC!
3) Rangers where HMRC lost should not even be mentioned which was an EBT and was giving Loans. And I know at least one argument why my EBT would be more by the law compared to Rangers.
4) I am not going to older cases at all where HMRC had lost. Lets just keep to above three

Now as you proved above all the cases I mentioned are different from Arctic and I AGREE 100%. Similarly Boyle and AAM are different to Rangers and MAY be VERY different to other EBTs.

Now as per HMRC's new condoc, NO ONE WILL HAVE THE RIGHT TO APPEAL once a follower/failure notice has been issued. HMRC MIGHT says Boyle's or any other case should apply to EBTs and all users have to pay. No tax payers get the right to prove that your case is different. If they can do that then why can't they do this to other case which you have rightly proved are different? And that is the whole point - How HMRC can use this legislation.

Second point is retrospective nature of legislation. If that is allowed than what is legal and rightful tax planning today does not make a difference because no one knows what HRMC might change tomorrow. So as per natural justice it should not be allowed and EVERY TAX PAYER should understand this. If all are happy and say retrospective legislation should be allowed than ok. But you cannot ignore and say that government can do retrospective legislation and it will not affect us ever because we run a ltd co.

eek
2nd February 2014, 14:55
Sadly I've been asked not to reply as I am upsetting the residents......

malvolio
2nd February 2014, 14:55
What you continue to ignore is that it's not about the legality of the scheme, its about whether or not you are entitled to use it, regardless of its precise structure. Retrospect is not the issue either.

HTH. BIDI.

cojak
2nd February 2014, 15:42
Sadly I've been asked not to reply as I am upsetting the residents......

You are welcome to continue here eek http://forums.contractoruk.com/accounting-legal/63073-loans-ebts-other-trusts-17.html

cojak
2nd February 2014, 15:49
I guess being quite might give a wrong signal. So let it continue.

Can you please tell me which case HMRC are legitimately winning case after case? If you cannot then I guess all names you have given me will apply back. But what I would request is lets discuss and If I am wrong then please correct me instead of calling names. I am not fighting here. Will accept my mistake if I am wrong with you and with HMRC as well. If I have to sell myself and pay RIGHTFUL tax I would. I am not saying that.

Recent cases from HMRC in news are
1) Boyle - Which was not even an EBT, Forex even did not exist but should apply to ALL EBTs as per HMRC!
2) AAM - Giving Bonues through EBT to companies in individual names with full access to those funds by those company directors. But it should apply to ALL EBTs as per HMRC!
3) Rangers where HMRC lost should not even be mentioned which was an EBT and was giving Loans. And I know at least one argument why my EBT would be more by the law compared to Rangers.
4) I am not going to older cases at all where HMRC had lost. Lets just keep to above three

Now as you proved above all the cases I mentioned are different from Arctic and I AGREE 100%. Similarly Boyle and AAM are different to Rangers and MAY be VERY different to other EBTs.

Now as per HMRC's new condoc, NO ONE WILL HAVE THE RIGHT TO APPEAL once a follower/failure notice has been issued. HMRC MIGHT says Boyle's or any other case should apply to EBTs and all users have to pay. No tax payers get the right to prove that your case is different. If they can do that then why can't they do this to other case which you have rightly proved are different? And that is the whole point - How HMRC can use this legislation.

Second point is retrospective nature of legislation. If that is allowed than what is legal and rightful tax planning today does not make a difference because no one knows what HRMC might change tomorrow. So as per natural justice it should not be allowed and EVERY TAX PAYER should understand this. If all are happy and say retrospective legislation should be allowed than ok. But you cannot ignore and say that government can do retrospective legislation and it will not affect us ever because we run a ltd co.

Yes we can. Because this consultation doc is not referring to Ltds - it's referring to individual taxation.

I will use this post EVERYTIME you try to protest otherwise.

Otherwise, outside of your Ltd argument - away you go, I'll not comment on that.

varunksingh
2nd February 2014, 17:57
Ok. I really don't have a problem with that and hope I am wrong. It is in my interest to be wrong.

If I just may request eek to let us know of any other EBT related cases apart from the ones I mentioned. Don't think that will upset any residents. I really don't want to keep my eyes closed if HMRC r wining this in court. Will be interesting to see what UTT says in Rangers case.

cojak
2nd February 2014, 18:43
Ok. I really don't have a problem with that and hope I am wrong. It is in my interest to be wrong.

If I just may request eek to let us know of any other EBT related cases apart from the ones I mentioned. Don't think that will upset any residents. I really don't want to keep my eyes closed if HMRC r wining this in court. Will be interesting to see what UTT says in Rangers case.

No you can't because I've asked him not to post in this thread.

Post in here if you want to continue the conversation: http://forums.contractoruk.com/accounting-legal/63073-loans-ebts-other-trusts-17.html

LisaContractorUmbrella
3rd February 2014, 08:49
Ok. I really don't have a problem with that and hope I am wrong. It is in my interest to be wrong.

If I just may request eek to let us know of any other EBT related cases apart from the ones I mentioned. Don't think that will upset any residents. I really don't want to keep my eyes closed if HMRC r wining this in court. Will be interesting to see what UTT says in Rangers case.

All of this discussion around legal precedents and whether or not all EBT's work in the same way is pretty irrelevant as they were outlawed with the introduction of the Disguised Remuneration Legislation. The fact that people kept coming up with variations on a theme has probably contributed heavily to HMRC taking their current all encompassing approach

convict
3rd February 2014, 09:29
Yes we can. Because this consultation doc is not referring to Ltds - it's referring to individual taxation.

I will use this post EVERYTIME you try to protest otherwise.

Otherwise, outside of your Ltd argument - away you go, I'll not comment on that.

Looking at the actual draft legislation, rather than the consultation doc I see:



ìRelevant taxî, ìtax advantageî and ìtax arrangementsî
2 (1) This paragraph applies for the purposes of this Part of this Schedule.
(2) ìRelevant taxî meansó
(a) income tax,
(b) capital gains tax,
(c) corporation tax, including any amount chargeable as if it were
corporation tax or treated as if it were corporation tax,
(d) inheritance tax,
(e) stamp duty land tax, and
(f) annual tax on enveloped dwellings.


So clearly it's wider than personal taxation, otherwise why all the other taxes?


Tax enquiries, returns and tax appeals
3 (1) This paragraph applies for the purposes of this Part of this Schedule.
(2) ìTax enquiryî meansó
(a) an enquiry under section 9A or 12AC of TMA 1970 (enquiries into
self-assessment returns for income tax and capital gains tax),
including an enquiry by virtue of notice being deemed to be given
under section 9A of that Act by virtue of section 12AC(6) of that Act,
(b) an enquiry under paragraph 5 of Schedule 1A to that Act (enquiry
into claims made otherwise than by being included in a return),
(c) an enquiry under paragraph 24 of Schedule 18 to FA 1998 (enquiry
into company tax return for corporation tax etc), including an
enquiry by virtue of notice being deemed to be given under that
paragraph by virtue of section 12AC(6) of TMA 1970,
(d) an enquiry under paragraph 12 of Schedule 10 to FA 2003 (enquiries
into SDLT returns), or
(e) an enquiry under paragraph 8 of Schedule 33 to FA 2013 (enquiries
into the annual tax for enveloped dwellings returns).




(7) “Tax appeal” means—
(a) an appeal under section 31 of TMA 1970 (income tax: appeals against
amendments of self-assessment, amendments made by closure
notices under section 28A or 28B of that Act, etc), including any
appeal under that section by virtue of regulations under Part 11 of
ITEPA 2003 (PAYE),
(b) an appeal under paragraph 9 of Schedule 1A to TMA 1970 (income
tax: appeals against amendments made by closure notices under
paragraph 7(2) of that Act, etc),
(c) an appeal under paragraph 34(3) or 48 of Schedule 18 to FA 1998
(corporation tax: appeals against amendment of a company’s return
made by closure notice, assessments other than self-assessments,
etc),
(d) an appeal under paragraph 35 of Schedule 10 to FA 2003 (stamp duty
land tax: appeals against amendment of self-assessment, discovery
assessments, etc),
(e) an appeal under paragraph 35 of Schedule 33 to FA 2013 (annual tax
on enveloped dwellings: appeals against amendment of selfassessment,
discovery assessments, etc), or
(f) a further appeal against any determination of an appeal within
paragraphs (a) to (e) or any further appeal within this paragraph.




EXPLANATORY NOTE
CLAUSE 1 SCHEDULE 1: CONSEQUENCES OF FAILING TO TAKE ACCOUNT
OF RELEVANT JUDICIAL RULINGS
SUMMARY
1. Clause 1 and Schedule 1 introduce a new requirement for users of certain tax
arrangements to amend their returns to relinquish the asserted tax advantage obtained by
applying those arrangements when notified to do so by HM Revenue & Customs (HMRC).
HMRC may issue such a notification when those tax arrangements have been shown in a
relevant judicial ruling not to give the asserted tax advantage if applied to those tax
arrangements. The measure provides for a penalty to be charged on those taxpayers who fail
to make the required amendment or to satisfy HMRC that no such amendment is necessary.
Taxpayers have a right of appeal against the penalty.
Taxpayers in receipt of a notice to amend their returns will also be notified of a requirement
to pay the amount of the tax advantage to HMRC. This amount will only be payable if the
taxpayer fails to amend the relevant return and pay the additional tax liability.
The measure applies to Income Tax (IT); Capital Gains Tax (CGT); Corporation Tax (CT);
Inheritance Tax (IHT); Stamp Duty Land Tax (SDLT); and the Annual Tax on Enveloped
Dwellings (ATED). The clause provides for further taxes to be added to the measure by
Treasury Order.

convict
3rd February 2014, 09:35
I should have said, my point is although the doc is entitled "Tackling marketed tax avoidance" the actual legislation is clearly much wider in scope and boils down to getting the money 1st are arguing later.



1 (1) HMRC may give a notice (a “failure notice”) to a person (“P”) if Conditions
A to D are met.
(2) Condition A is that—

(a) a tax enquiry is in progress into a return or claim made by P in
relation to a relevant tax, or
(b) P has made a tax appeal but that appeal has not yet been determined
by the tribunal or court to which it is addressed, or abandoned or
otherwise disposed of.

(3) Condition B is that the return or claim or, as the case may be, appeal is made
on the basis that a particular tax advantage (“the asserted advantage”)
results from particular tax arrangements (“the applied arrangements”).

(4) Condition C is that HMRC is of the opinion that there is a judicial ruling
which is relevant to the applied arrangements.

(5) Condition D is that no previous failure notice has been given to the same
person (and not withdrawn) by reference to the same tax advantage, tax
arrangements and judicial ruling.


Nothing in there about it being limited to schemes.

cojak
3rd February 2014, 09:51
I should have said, my point is although the doc is entitled "Tackling marketed tax avoidance" the actual legislation is clearly much wider in scope and boils down to getting the money 1st are arguing later.



Nothing in there about it being limited to schemes.
Eek has replied in the other thread.
http://forums.contractoruk.com/accounting-legal/63073-loans-ebts-other-trusts-17.html#post1881864

But this is obviously getting ridiculous, so do you want me to let him reply in this thread or shall I move any Ltd questions to that thread?

Which is it to be?

And as a hint, not letting eek reply is NOT an answer I'll accept.

convict
3rd February 2014, 09:59
Eek has replied in the other thread.
http://forums.contractoruk.com/accounting-legal/63073-loans-ebts-other-trusts-17.html#post1881864

But this is obviously getting ridiculous, so do you want me to let him reply in this thread or shall I move any Ltd questions to that thread?

Which is it to be?

And as a hint, not letting eek reply is NOT an answer I'll accept.

I'm a big boy, let eek reply anywhere he likes.

convict
3rd February 2014, 10:10
On the basis that I can't reply in the correct thread :confused:



Yes but its irrelevant. each example mentioned there is purely designed to ensure that HMRC receive payment of the full amount of tax due regardless of type (be it corporation tax, inheritance tax, individual tax and capital gains tax) no matter what contrived means was used to avoiding paying that tax .

There is absolutely, totally, utterly nothing there which would impact your typical contractor taking dividends as part of their remuneration no matter how you describe it and no matter which part of that documentation / legislation you look at.

My point was that there could be a scenario where HMRC win a case at FTT 2vs1 and then apply this at their discretion using their opinion to all those they think are caught by it.

There might not be something obvious today but the implications are definitely there, and based on HMRCs previous, I think they'll try it on, like they did with Arctic. How will you then fight to UTT without any money (because HMRC has it all).

Let's not forget the retrospective application of this either.

Irrespective of one's opinion of schemes, this is an unfair power shift from the taxpayer to HMRC.

DonkeyRhubarb
3rd February 2014, 10:17
I should have said, my point is although the doc is entitled "Tackling marketed tax avoidance" the actual legislation is clearly much wider in scope and boils down to getting the money 1st are arguing later.

Nothing in there about it being limited to schemes.

Correct. It applies to any (final) decision of a court in a tax case. It also appears to apply to companies, not just individuals.


3(2)(c) an enquiry under paragraph 24 of Schedule 18 to FA 1998 (enquiry
into company tax return for corporation tax etc), including an
enquiry by virtue of notice being deemed to be given under that
paragraph by virtue of section 12AC(6) of TMA 1970

However, in reality, it is mostly only going to affect schemes, which are the intended target.

LisaContractorUmbrella
3rd February 2014, 10:21
Convict, I think you're seeing what you want to see. HMRC are most definitely referring to 'schemes' that are devised for the purpose of avoiding tax; Limited Companies are a perfectly legitimate trading vehicle and will not be affected by the legislation changes

convict
3rd February 2014, 10:31
Convict, I think you're seeing what you want to see. HMRC are most definitely referring to 'schemes' that are devised for the purpose of avoiding tax; Limited Companies are a perfectly legitimate trading vehicle and will not be affected by the legislation changes

I guess I'm seeing a sledgehammer being used to crack a nut. Maybe they should refine the draft legislation accordingly and remove the wide-ranging potential for mis-application.

oh, and we already have GAAR and that should be enough to stop schemes. I'm not trying to defend the use of schemes, merely point out that as it stands, the proposed legislation can be applied in ways way beyond that.

varunksingh
3rd February 2014, 10:42
All of this discussion around legal precedents and whether or not all EBT's work in the same way is pretty irrelevant as they were outlawed with the introduction of the Disguised Remuneration Legislation. The fact that people kept coming up with variations on a theme has probably contributed heavily to HMRC taking their current all encompassing approach

I will be very happy with HMRC if they agree with you. EBTs after 2010 Disguised Remuneration Legislation are very likely not to be successful. But this is unfair that without proving in court that EBT before Dec 2010 very legal they are finding a shortcut to get the tax they want. Quite a few legal precedents to support EBTs before Dec 2010. HMRC knows that otherwise why Disguised Remuneration Legislation!

LisaContractorUmbrella
3rd February 2014, 10:50
I will be very happy with HMRC if they agree with you. EBTs after 2010 Disguised Remuneration Legislation are very likely not to be successful. But this is unfair that without proving in court that EBT before Dec 2010 very legal they are finding a shortcut to get the tax they want. Quite a few legal precedents to support EBTs before Dec 2010. HMRC knows that otherwise why Disguised Remuneration Legislation!

It doesn't matter whether it's fair or not - it's the law

LisaContractorUmbrella
3rd February 2014, 10:55
I guess I'm seeing a sledgehammer being used to crack a nut. Maybe they should refine the draft legislation accordingly and remove the wide-ranging potential for mis-application.

oh, and we already have GAAR and that should be enough to stop schemes. I'm not trying to defend the use of schemes, merely point out that as it stands, the proposed legislation can be applied in ways way beyond that.

It is heavy handed, no doubt about that, but there are many different types of tax avoidance 'schemes' which use a variety of different types of taxation to give the tax advantage and any new legislation has to consider all sorts of possibilities. That doesn't mean that HMRC would attack existing, legitimate tax structures using new legislation just because there is a tiny possibility that they could - at the end of the day IR35 covers PSC's being used to avoid PAYE tax

DonkeyRhubarb
3rd February 2014, 11:15
When assessing the scope of the "follower" proposal it's important to refer to the actual draft legislation in Annex A of the consultation.

Don't just rely on HMRC's description in Section 3.

Remember, "assume" makes an ass out of u and me.

VictorValiant
3rd February 2014, 11:53
According to the text in Annex A they can issue a "failure notice" purely on the basis that a Tax Enquiry has been opened with no further justification than that. It gives them "carte blanche" to force payment on the slimmest of premise. If that doesn't overload Royal Mail then I hate to think what will.

DonkeyRhubarb
3rd February 2014, 12:39
According to the text in Annex A they can issue a "failure notice" purely on the basis that a Tax Enquiry has been opened with no further justification than that. It gives them "carte blanche" to force payment on the slimmest of premise. If that doesn't overload Royal Mail then I hate to think what will.

Not quite.

They would also have to cite a final ruling of a court in a related case and explain why it applies.

See "Content of failure notices" on page 5 of Annex A.

varunksingh
3rd February 2014, 12:58
Not quite.

They would also have to cite a final ruling of a court in a related case and explain why it applies.

See "Content of failure notices" on page 5 of Annex A.

Court can be a FTT even when FTT rulings are not Binding.
AND
HMRC word will be last and no appeal possible until Court proves HMRC wrong

VictorValiant
3rd February 2014, 13:11
I am happy to stand corrected.

LisaContractorUmbrella
3rd February 2014, 13:20
Court can be a FTT even when FTT rulings are not Binding.
AND
HMRC word will be last and no appeal possible until Court proves HMRC wrong

A 'final judicial ruling' as defined in the draft legislation:

a. a ruling of the Supreme Court
b. a ruling of any other court or tribunal in circumstances where:
i. no appeal may be made against the ruling
ii. if an appeal may be made against the ruling with permission the time limit for applications has expired and either no application has been made or permission has been refused
iii. if such permission to appeal against the ruling has been granted or is not required, no appeal has been made within the time limit for appeals
iv. if an appeal was made, it was abandoned or otherwise disposed of before it was determined by the court or tribunal to which it is addressed

varunksingh
7th February 2014, 14:13
http://www.accountancyage.com/aa/opinion/2327418/-pay-up-first-anti-tax-avoidance-rule-not-justified

Seems like it not just me but others also asking "Where would such an approach end" and wider implications of such powers with HMRC. People will shoot me down again but because one contract for eg of Linux Technical support Engg with a bank was found under IR35, HMRC CAN decide other Technical support Engg contracts are also under IR35.

And above all this being against the natural justice.

creativity
7th February 2014, 14:51
http://www.accountancyage.com/aa/opinion/2327418/-pay-up-first-anti-tax-avoidance-rule-not-justified

Seems like it not just me but others also asking "Where would such an approach end" and wider implications of such powers with HMRC. People will shoot me down again but because one contract for eg of Linux Technical support Engg with a bank was found under IR35, HMRC CAN decide other Technical support Engg contracts are also under IR35.

And above all this being against the natural justice.

I like the idea of users paying upfront when they join a DOTAS scheme - that will put an end to most schemes, which is what we all want. But the power to slap a 90 day payment on anyone without doing any due diligence other than DOTAS number or an HMRC view that its similar to another case is rediculous.

EveryMoveCalculated
7th February 2014, 14:57
For anyone following the thread this link puts things pretty succinctly:
http://www.accountancyage.com/aa/opinion/2327418/-pay-up-first-anti-tax-avoidance-rule-not-justified

EveryMoveCalculated
7th February 2014, 14:58
Obviously Varun beat me to it... ;)

varunksingh
7th February 2014, 15:18
I like the idea of users paying upfront when they join a DOTAS scheme - that will put an end to most schemes, which is what we all want. But the power to slap a 90 day payment on anyone without doing any due diligence other than DOTAS number or an HMRC view that its similar to another case is rediculous.

Agree with u 100% but this shouldn't be done retrospectively.

cojak
7th February 2014, 15:25
People will shoot me down again but because one contract for eg of Linux Technical support Engg with a bank was found under IR35, HMRC CAN decide other Technical support Engg contracts are also under IR35.

And above all this being against the natural justice.

If the unfavourable contracts and working practices (him being a disguised employee) were all the same without change then the outcome is no surprise. Also if he tried to defend the case himself he would be onto a loser.

That is IR35 legislation, it has nothing to do with marketed tax avoidance schemes - this thread refers to the consultative document referring to Section 9a (marketed tax avoidance schemes).

It does not affect Ltds because Section 9a relates to sole traders and Individuals see https://www.pcg.org.uk/tax-investigation-faq

ScottW
7th February 2014, 15:48
If the unfavourable contracts and working practices (him being a disguised employee) were all the same without change then the outcome is no surprise. Also if he tried to defend the case himself he would be onto a loser.

That is IR35 legislation, it has nothing to do with marketed tax avoidance schemes - this thread refers to the consultative document referring to Section 9a (marketed tax avoidance schemes).

It does not affect Ltds because Section 9a relates to sole traders and Individuals see https://www.pcg.org.uk/tax-investigation-faq

You have probably forgotten more on these subjects than I will ever know (or want to know).

However, the idea that Government agencies are given wide ranging powers that they then do NOT abuse is naive in the extreme.

All just my humble opinion of course.

cojak
7th February 2014, 16:29
You have probably forgotten more on these subjects than I will ever know (or want to know).

However, the idea that Government agencies are given wide ranging powers that they then do NOT abuse is naive in the extreme.

All just my humble opinion of course.

You are quite welcome to your opinion.

However do not confuse opinion and speculation with facts.

ScottW
7th February 2014, 18:00
You are quite welcome to your opinion.

However do not confuse opinion and speculation with facts.

It is a fact that Government departments can enter your house, put a bag over your head and lock you up for years without telling you what you are accused of or who your accuser is.

If 'they' can do that 'they' can easily drain your bank account of a few tens of thousands of pounds with not a single thought if given the power and inclination.

Boiling a frog...........

cojak
7th February 2014, 18:14
If you wish to speculate in such a manner I invite you to do it in General, otherwise stay on topic.

varunksingh
7th February 2014, 21:32
I request all who are potentially getting effected by these new draft laws to get involved and respond to consultation document

Consultation document is available here: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/275070/Tackling_marketed_tax_avoidance.pdf

DonkeyRhubarb
8th February 2014, 09:31
It does not affect Ltds because Section 9a relates to sole traders and Individuals see https://www.pcg.org.uk/tax-investigation-faq

Although the consultation is titled "marketed tax avoidance", the draft legislation appears to cover a wide range of enquiries including company tax returns (see Appendix A, page 3 "Tax enquiries, returns and tax appeals").

It is certainly not just Section 9a.

Now don't get me wrong, I am not suggesting for one minute that it will be used to attack Ltds.

But there is nothing in the legislation which says this only applies to "dodgy schemes".

costo
9th February 2014, 09:05
For all those who may be affected if what is proposed in this consultancy document becomes law.

Please please take the time to respond to the consultancy document and also write to your local MP to draw attention to this. My local MP was good enough to listen to my points and will be writing to the treasury on my behalf.

It should not be assumed that *other* people in a similar situation will be doing this and therefore you do not have to.

malvolio
9th February 2014, 09:48
You might also find that this makes for interesting reading (http://www.pcg.org.uk/news-events/blog/2014/02/04/onshore-employment-intermediaries-and-false-self-employment-progress)... :wink

varunksingh
9th February 2014, 20:06
You might also find that this makes for interesting reading (http://www.pcg.org.uk/news-events/blog/2014/02/04/onshore-employment-intermediaries-and-false-self-employment-progress)... :wink

Is this not about something completely different? I think it is.

varunksingh
10th February 2014, 09:54
http://www.tax.org.uk/Resources/CIOT/Documents/2013/10/131008%20Raising%20the%20stakes%20on%20avoidance%2 0-%20CIOT%20comments.pdf

How dare CIOT says this CAN apply to VAT, Corporate finance etc. CIOT is as crazy as I am thinking this has POTENTIAL wider implications.

LisaContractorUmbrella
10th February 2014, 10:33
http://www.tax.org.uk/Resources/CIOT/Documents/2013/10/131008%20Raising%20the%20stakes%20on%20avoidance%2 0-%20CIOT%20comments.pdf

How dare CIOT says this CAN apply to VAT, Corporate finance etc. CIOT is as crazy as I am thinking this has POTENTIAL wider implications.

What do you mean how dare they? I think that they are giving what's know as an 'expert opinion'

varunksingh
10th February 2014, 10:50
What do you mean how dare they? I think that they are giving what's know as an 'expert opinion'

I said that with a LOAD of sarcasm. Lots here has been shooting me down if I say this CAN apply to outside of EBTs

cojak
10th February 2014, 11:42
http://www.tax.org.uk/Resources/CIOT/Documents/2013/10/131008%20Raising%20the%20stakes%20on%20avoidance%2 0-%20CIOT%20comments.pdf

How dare CIOT says this CAN apply to VAT, Corporate finance etc. CIOT is as crazy as I am thinking this has POTENTIAL wider implications.

Where does it say that in the document? I can't find any reference to VAT in the context you described.

cojak
10th February 2014, 12:45
But I'm amused by this bit:

There is a deep concern that some HRPs would wear ‘naming and shaming’ as a badge of honour, or worse as approval by HMRC that they provide schemes that work, providing a valuable marketing tool for the unscrupulous.

Just as they do with 'QC Approved' currently. :happy

eek
10th February 2014, 15:51
Where does it say that in the document? I can't find any reference to VAT in the context you described.


5.7 We are aware that there are concerns that DOTAS in respect of VAT has not
worked as well as in areas of direct tax. That aside, there is an argument that
the proposals should cover VAT and other EU taxes (eg customs duty) but
only where it is compatible with the principles of EU law eg disclosing the
names of people who advised on a number of schemes held to be abuses.


Note CIOT are suggesting that VAT avoidance schemes should be covered within the rules, but the original draft law doesn't mention it....

And now I'll go back to laughing from the sidelines....

cojak
10th February 2014, 16:11
Note CIOT are suggesting that VAT avoidance schemes should be covered within the rules, but the original draft law doesn't mention it....

And now I'll go back to laughing from the sidelines....

Oh, ta. I stopped reading that line at the point I'd got to DOTAS..

DonkeyRhubarb
12th February 2014, 09:23
Black Friday Proposals (http://www.c3tax.com/blog/black-friday-proposals-a-call-to-arms)

DonkeyRhubarb
12th February 2014, 09:33
HMRC plans summer raid on pockets of tax scheme users | Let (http://blogs.mazars.com/letstalktax/2014/02/06/hmrc-plans-summer-raid-on-pockets-of-tax-scheme-users)

DonkeyRhubarb
12th February 2014, 10:03
WGEAdvisory | Just another WordPress site (http://www.wgeadvisory.com/blog)

"Should we care about the “morally repugnant” DOTAS and GAAR scheme providers and those who partake in such schemes? After all, these people are the same as benefit cheats, right?"

ScottW
12th February 2014, 12:30
Black Friday Proposals (http://www.c3tax.com/blog/black-friday-proposals-a-call-to-arms)

I've wrote to my MP (Conservative) as regards this Bill in late January.

I've yet to receive a reply.

I'd be surprised if most of these muppets knew or even cared what was in this Bill.

They may get a surprise when it's used against them I suppose.

LandRover
12th February 2014, 19:06
When you look at the Finance Act 2014 proposals and undersand their significance, then you begin to understand how Britain has lost its way concerning the basic human rights of its citizens.

To presume you have committed an offence, then demanded to pay up or else by using case law that is decided by HMRC...its a very sad state of affairs indeed.

Lets not forget that without IR35 then this whole debacle wouldnt have come about. Many were recommended into this arrangements by accountants who advised people it was the best alternative in avoiding the stress of IR35. Remember many 5-10yrs ago were seriously stressed about it.

Now jump forward, the government wants to take to task people who are easily identified, who thought they were in arrangements that were up front with HMRC, but now HMRC want to change the game, move the goal posts because they couldnt resolve these arrangements years ago, and let them run on...

It stinks, it really is a stitch up that they are trying to undertake. Let the big companies like Starbucks, Amazon etc go about their business as usual, they have huge legal teams and lots of money, but your average freelancer is easy pickings...its a case of target a section in society as scum bags, tax avoiders who are unworthy of any rights of appeal and justice, they are the filthy dirty tax dodgers and we aim to get them is the mantra of HMRC.

Dont HMRC understand the consequences of what they will do?

They will ruin families and break many up, push people to the very edge...

vern19
12th February 2014, 19:44
When you look at the Finance Act 2014 proposals and undersand their significance, then you begin to understand how Britain has lost its way concerning the basic human rights of its citizens.

To presume you have committed an offence, then demanded to pay up or else by using case law that is decided by HMRC...its a very sad state of affairs indeed.

Lets not forget that without IR35 then this whole debacle wouldnt have come about. Many were recommended into this arrangements by accountants who advised people it was the best alternative in avoiding the stress of IR35. Remember many 5-10yrs ago were seriously stressed about it.

Now jump forward, the government wants to take to task people who are easily identified, who thought they were in arrangements that were up front with HMRC, but now HMRC want to change the game, move the goal posts because they couldnt resolve these arrangements years ago, and let them run on...

It stinks, it really is a stitch up that they are trying to undertake. Let the big companies like Starbucks, Amazon etc go about their business as usual, they have huge legal teams and lots of money, but your average freelancer is easy pickings...its a case of target a section in society as scum bags, tax avoiders who are unworthy of any rights of appeal and justice, they are the filthy dirty tax dodgers and we aim to get them is the mantra of HMRC.

Dont HMRC understand the consequences of what they will do?

They will ruin families and break many up, push people to the very edge...

I couldn't agree more. I just hope that people on this forum write to their MPs via writetothem.com and let them know what some of their constituents think about this.

ads1980
13th February 2014, 10:08
I couldn't agree more. I just hope that people on this forum write to their MPs via writetothem.com and let them know what some of their constituents think about this.

My MP is useless (but most of them are!) but I would be more than happy to write to him. Without causing an issue for myself worse that it already is though, what is the best thing to say?

vern19
13th February 2014, 11:44
My MP is useless (but most of them are!) but I would be more than happy to write to him. Without causing an issue for myself worse that it already is though, what is the best thing to say?

Something along the lines of -

Dear xxxx,

I have been directed to a consultation document called 'Tackling marketed tax avoidance' (link below). In summary the proposals are for any tax payer in dispute with HMRC to pay the tax estimated by HMRC first and then fight his/her corner in a tribunal. Where as currently the tax payer can appeal and the case may go to court if a settlement cannot be found.

This may well force the tax payer into bankruptcy before they can attempt to justify their position with HMRC in Court. This will certainly destroy families and adversely affect the economy. Meanwhile foreign companies pay corporation tax in the single figures and HMRC do nothing.

I know that when dealing with HMRC the tax payer is assumed guilty and has to prove innocence but this proposal goes way too far.

I would be very interested in your thoughts

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/275070/Tackling_marketed_tax_avoidance.pdf


Yours sincerely,

DonkeyRhubarb
13th February 2014, 12:20
It is important to point out that this isn't just aimed at disputes that arise in future.

It would also apply to existing disputes going back to 2004 when DOTAS was introduced. According to HMRC, they have 65,000 of these open cases.

lfcynwa
13th February 2014, 12:41
Something along the lines of -

Dear xxxx,

I have been directed to a consultation document called 'Tackling marketed tax avoidance' (link below). In summary the proposals are for any tax payer in dispute with HMRC to pay the tax estimated by HMRC first and then fight his/her corner in a tribunal. Where as currently the tax payer can appeal and the case may go to court if a settlement cannot be found.

This may well force the tax payer into bankruptcy before they can attempt to justify their position with HMRC in Court. This will certainly destroy families and adversely affect the economy. Meanwhile foreign companies pay corporation tax in the single figures and HMRC do nothing.

I know that when dealing with HMRC the tax payer is assumed guilty and has to prove innocence but this proposal goes way too far.

I would be very interested in your thoughts

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/275070/Tackling_marketed_tax_avoidance.pdf


Yours sincerely,

thanks for this I shall get writing..

VictorValiant
13th February 2014, 15:15
I have already sent my local MP [Labour] an e-mail regarding our concerns and the lack of natural justice in the proposals. Emphasising yet again the retrospective aspect of them. He immediately responded using the phrase "hugely interesting" and has forwarded my comments and references on to his colleagues in the Shadow Treasury. I will be following up with a visit to see him this weekend. Keep pushing and make them aware of what is going on in the background.

creativity
14th February 2014, 00:02
I have already sent my local MP [Labour] an e-mail regarding our concerns and the lack of natural justice in the proposals. Emphasising yet again the retrospective aspect of them. He immediately responded using the phrase "hugely interesting" and has forwarded my comments and references on to his colleagues in the Shadow Treasury. I will be following up with a visit to see him this weekend. Keep pushing and make them aware of what is going on in the background.

Well done victor. I am going to compile my letter this weekend and get in touch with my MP.
We all should be doing this as the more MP's who understand the details the better. Clearly we want an end to these ambiguous schemes but HMRC are really going a step too far with these sweeping powers to be judge, jury and executioner all within 90 days!
If HMRC manage to get this finance bill through I will be leaving the country - not to save money but to live in a country where they don't take liberties.

vern19
14th February 2014, 13:13
thanks for this I shall get writing..
Ok but this is just a suggestion. It would look pretty lame if everyone just copy and pastes

malvolio
14th February 2014, 14:24
Ok but this is just a suggestion. It would look pretty lame if everyone just copy and pastes
Worse than that. It will be noticed by the secretariat and all of them will go in the bin. MPs only respond to individual letters.

vern19
14th February 2014, 14:38
Worse than that. It will be noticed by the secretariat and all of them will go in the bin. MPs only respond to individual letters.

Rubbish. My MP has responded to me already regarding retrospective taxation

malvolio
14th February 2014, 14:43
Rubbish. My MP has responded to me already regarding retrospective taxation
Responding to a form letter identical to a few hundred others?

Also, your MP responding means little or nothing. David Gauke (in this government) responding is the target (and yes, I have a couple of letters from the Minister in recent years on various tax-related matters)

lfcynwa
14th February 2014, 14:54
Ok but this is just a suggestion. It would look pretty lame if everyone just copy and pastes - Yep but a good starting point, I wasn't intending on copying word for word..

vern19
14th February 2014, 14:55
Responding to a form letter identical to a few hundred others?

Also, your MP responding means little or nothing. David Gauke (in this government) responding is the target (and yes, I have a couple of letters from the Minister in recent years on various tax-related matters)

My MP replied within 3 days to an email sent through writetothem.com and was extremely supportive

Get your facts straight before spouting your usual negative diatribe.

malvolio
14th February 2014, 15:15
My MP replied within 3 days to an email sent through writetothem.com and was extremely supportive
There's a difference between "supportive" and "doing something about it". All MPs are supportive, it's how they get re-elected. Ministers pull strings and make things happen, or their answers give you the ammunition you need to challenge their approach. I don't confuse motion with progress.


Get your facts straight before spouting your usual negative diatribe.
It's not me that's negative. I've been campaigning for fair treatment of contractors for around 12 years. If you don't want to understand what's effective and what isn't , that's your decision.

vern19
14th February 2014, 15:20
There's a difference between "supportive" and "doing something about it". All MPs are supportive, it's how they get re-elected. Ministers pull strings and make things happen, or their answers give you the ammunition you need to challenge their approach. I don't confuse motion with progress.


It's not me that's negative. I've been campaigning for fair treatment of contractors for around 12 years. If you don't want to understand what's effective and what isn't , that's your decision.

Then I suggest you do NOT write to YOUR MP.

You have obviously been campaigning for too long. Do something else with your life, you are no use to anybody here

malvolio
14th February 2014, 17:00
Then I suggest you do NOT write to YOUR MP.

You have obviously been campaigning for too long. Do something else with your life, you are no use to anybody here
Says Vern from the lofty heights of a whole 48 posts. :tumble:

This "debate" is not adding any value to anything. I suggest you leave it alone.

vern19
14th February 2014, 17:17
Says Vern from the lofty heights of a whole 48 posts. :tumble:

This "debate" is not adding any value to anything. I suggest you leave it alone.

I can assure you that I will not be acting on any of your suggestions. You comment as though you are an expert but you have just shown yourself to have little knowledge as you 'poor cold water' on anything remotely positive. I suspect this soothes your ego.

ads1980
17th February 2014, 12:20
Can we get back on topic please guys? Its stressful enough without people falling out....

DonkeyRhubarb
17th February 2014, 12:48
NTRT have prepared a template letter for people to respond to the consultation. Please alter it in your own words.

Latest News | No To Retrospective Taxation (http://notoretrotax.org.uk/latest-news)

Some people will say it won't count if everyone sends similar letters but HMRC will have to report to the Minister how many responses they got. So every letter does count.

cojak
17th February 2014, 12:59
Can we get back on topic please guys? Its stressful enough without people falling out....

Sorted.

costo
17th February 2014, 13:03
It's hard to know if the majority of people who are reading this thread are affected or not, regardless of if you are or are not affected your support in this matter is urgently needed.

What is being proposed in the consultancy document gives HMRC powers that allow them to judge people "guilty until proven innocent" and force money to be paid without any court hearing. Could you imagine if you suddenly got a bill for more money than you could possibly afford, that you would be forced to sell your family home or go bankrupt? If you have children can you imagine how this will affect them, when they have done nothing wrong?

If you can empathise, please please take just 5 mins to help us, we need as many people to object to what is being proposed as possible - the last document only 31 people responded (most of those professional bodies), we need many many more.

The letter NTRT guys have put together can be used a template (or even just sign it and send it in)

Latest News | No To Retrospective Taxation (http://notoretrotax.org.uk/latest-news)

If you were in the situation some of us were in, would you not want to ask everyone possible to help?

cojak
17th February 2014, 13:07
You're speaking to the converted here. You'd be better off making your plea in http://forums.contractoruk.com/accounting-legal/63073-loans-ebts-other-trusts.html

DonkeyRhubarb
17th February 2014, 13:29
This was the response to the previous consultation last year.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/275071/Raising_the_stakes_on_tax_avoidance.pdf

2.8 HMRC received 31 responses to the consultation including written
responses and also comments during meetings. A breakdown of the
capacities in which respondents made their comments is below:
* 10 from representative bodies
* 5 from consultants
* 7 from accountancy firms
* 4 from law firms
* 4 from individuals
* 1 from a trade union

I suspect there might be a few more this time !!!

lara400
17th February 2014, 14:38
considering I know next to nothing about how any bill is approved - I read somewhere that it needs to go to the House of Commons - so, am I right in saying that it first needs to be approved by MP's and then goes to House of Commons and finally is a passed bill....does this all take a couple of months?

....and then hmrc have to send out letters and then demand a furhter 90 days for the monies...so 6 months for the bill to be passed and then 3 months for the money.....9 months in total?...probably totally off the mark!

DonkeyRhubarb
17th February 2014, 14:48
considering I know next to nothing about how any bill is approved - I read somewhere that it needs to go to the House of Commons - so, am I right in saying that it first needs to be approved by MP's and then goes to House of Commons and finally is a passed bill....does this all take a couple of months?

....and then hmrc have to send out letters and then demand a furhter 90 days for the monies...so 6 months for the bill to be passed and then 3 months for the money.....9 months in total?...probably totally off the mark!

The consultation ends 24th Feb. The Government will then decide which proposals will go forward to Parliament in the Finance Bill. These will be announced in the budget next month.

The Bill will then be debated in the Finance Bill Committee in May. If the proposal gets passed then it will become law in July.

So, HMRC could start issuing notices from July onwards with 90 days to pay.

lara400
17th February 2014, 14:57
thanks for that

Guess this will be the most anticipated budget to watch then - forget about booze prices going up...

The Chancellor of the Exchequer will give his Budget to Parliament on 19 March 2014

zaphrus
17th February 2014, 21:26
Two snippets from me,

Firstly, if contacting non-tory MPs, does anyone think it is worth highlighting how this policy appears to be highly politically motivated, and aimed at securing a fighting fund the chancellor can use as a giveaway ahead of the next election? Add in that the burden of repaying the tax plus interest is going to fall on to a future government, rather than the current incumbent.

I also found this regarding a couple of other pieces of retrospective taxation that reduced the statute of limitation for the taxpayer to claim back overpaid tax.

Tax Analysts -- U.K.'s Retroactive Shortening of Tax Restitution Statute of Limitations Violates EU Law, Advocate General Says (http://www.taxanalysts.com/www/features.nsf/Articles/8185BBE89F025A5085257BE200431DEA?OpenDocument)

What's interesting is how both were ruled invalid due to the following ...

the advocate general took the position that the key issue is that because the legislation was introduced retroactively and without notice, and with no transitional arrangement offered, taxpayers were caught by surprise and left unable to pursue a claim they had already started.

I think it would make for an interesting discussion with your MP if you were able to highlight that retrospective legislation has been challenged, and ruled against in European courts, and the cost of reimbursing any taxpayers caught by this new proposed legislation will fall entirely on a future government.

lara400
18th February 2014, 10:01
all I know is I am not voting Tory's again...

costo
18th February 2014, 14:04
It's interesting that the consultation duration lasted just 4 weeks, according to

Code of Practice on Consultation (http://www.berr.gov.uk/files/file47158.pdf)


Criterion Duration of consultation exercises
Consultations should normally last for at least 12 weeks with consideration given
to longer timescales where feasible and sensible

And then


2.3 When timing is tight, for example when dealing with emergency measures, or international, legally-binding deadlines, or when the consultation needs to fit into fixed timetables such as the Budget cycle, consideration should be given to whether a formal, written, public consultation is the best way of seeking views. Where a formal consultation exercise is considered appropriate and there are good reasons for it to last for a shorter period (e.g. to seek views to inform the UK’s negotiating position on EU proposals soon to be discussed in the Council of Ministers), the consultation document should be clear as to the reasons for the shortened consultation period and ministerial clearance (or equivalent, e.g. in non- Ministerial departments) for the shorter timeframe should be sought. In such circumstances it is important to consider the provision of additional means through which people can express their views.

I'm guessing the provision will be "to get this ready in time for the budget", however I don't believe this was indicated in the consultancy document?

Then

Consultation Principles (https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/255180/Consultation-Principles-Oct-2013.pdf)




Timeframes for consultation should be proportionate and realistic to allow stakeholders
sufficient time to provide a considered response and where the consultation spans all or part
of a holiday period2
policy makers should consider what if any impact there may be and take
appropriate mitigating action. The amount of time required will depend on the nature and
impact of the proposal (for example, the diversity of interested parties or the complexity of
the issue, or even external events), and might typically vary between two and 12 weeks. The
timing and length of a consultation should be decided on a case-by-case basis; there is no
set formula for establishing the right length. In some cases there will be no requirement for
consultation, depending on the issue and whether interested groups have already been
engaged in the policy making process. For a new and contentious policy, 12 weeks or more
may still be appropriate. When deciding on the timescale for a given consultation the
capacity of the groups being consulted to respond should be taken into consideration.


The most important part being


For a new and contentious policy, 12 weeks or more
may still be appropriate. When deciding on the timescale for a given consultation the
capacity of the groups being consulted to respond should be taken into consideration.

Is it possible that this consultancy has not abided by their own framework?

DonkeyRhubarb
18th February 2014, 16:10
They may also have wanted to make the consultation as short as possible so very few of the 65,000 intended victims got wind of it in time.

jbryce
18th February 2014, 16:23
They may also have wanted to make the consultation as short as possible so very few of the 65,000 intended victims got wind of it in time.

...of these 65,000 - how many are likely to be forced into bankruptcy? Is there any provision for scheme users, who may be hit with several years worth of tax demands, to negotiate substantial 'time to pay' arrangements?
Or is it going to be a train-wreck?

DonkeyRhubarb
18th February 2014, 16:31
...of these 65,000 - how many are likely to be forced into bankruptcy? Is there any provision for scheme users, who may be hit with several years worth of tax demands, to negotiate substantial 'time to pay' arrangements?
Or is it going to be a train-wreck?

God knows. The consultation doesn't say anything about what happens if people can't cough up within the 90 days.

varunksingh
18th February 2014, 19:15
Two snippets from me,

Firstly, if contacting non-tory MPs, does anyone think it is worth highlighting how this policy appears to be highly politically motivated, and aimed at securing a fighting fund the chancellor can use as a giveaway ahead of the next election? Add in that the burden of repaying the tax plus interest is going to fall on to a future government, rather than the current incumbent.

I also found this regarding a couple of other pieces of retrospective taxation that reduced the statute of limitation for the taxpayer to claim back overpaid tax.

Tax Analysts -- U.K.'s Retroactive Shortening of Tax Restitution Statute of Limitations Violates EU Law, Advocate General Says (http://www.taxanalysts.com/www/features.nsf/Articles/8185BBE89F025A5085257BE200431DEA?OpenDocument)

What's interesting is how both were ruled invalid due to the following ...

the advocate general took the position that the key issue is that because the legislation was introduced retroactively and without notice, and with no transitional arrangement offered, taxpayers were caught by surprise and left unable to pursue a claim they had already started.

I think it would make for an interesting discussion with your MP if you were able to highlight that retrospective legislation has been challenged, and ruled against in European courts, and the cost of reimbursing any taxpayers caught by this new proposed legislation will fall entirely on a future government.

Many thanks zaphrus. A really good link.

DonkeyRhubarb
19th February 2014, 08:18
http://www.taxation.co.uk/taxation/Articles/2014/02/19/320751/elephant-room

"Late last year HMRC won the case of Philip Boyle v HMRC (TC 03103) at the FTT. In their Spotlight publication of December 2013, HMRC hinted that many other “contractor loan schemes” would come within the Boyle decision. And, in a press release of 9 December 2013, HMRC said that about 15,000 people used tax planning schemes which were similar to the one used by Philip Boyle."

"Therefore, while the Boyle case has a superficial and peripheral resemblance to some other tax planning arrangements, HMRC would convince themselves that this case, assuming it is final, was “relevant to the circumstances” of all the other 15,000 or 16,000 contractor cases and issue payment demands."

varunksingh
19th February 2014, 12:15
http://www.taxation.co.uk/taxation/Articles/2014/02/19/320751/elephant-room

"Late last year HMRC won the case of Philip Boyle v HMRC (TC 03103) at the FTT. In their Spotlight publication of December 2013, HMRC hinted that many other “contractor loan schemes” would come within the Boyle decision. And, in a press release of 9 December 2013, HMRC said that about 15,000 people used tax planning schemes which were similar to the one used by Philip Boyle."

"Therefore, while the Boyle case has a superficial and peripheral resemblance to some other tax planning arrangements, HMRC would convince themselves that this case, assuming it is final, was “relevant to the circumstances” of all the other 15,000 or 16,000 contractor cases and issue payment demands."

and from the same article "Who is next?" and "Risks and retrospection" are same as what I have been saying all along.

DonkeyRhubarb
19th February 2014, 12:21
But David Gauke has said that "follower cases" will only affect 4,000 taxpayers in the next 2 years.

Tax Avoidance: 3 Feb 2014: Hansard Written Answers - TheyWorkForYou (http://www.theyworkforyou.com/wrans/?id=2014-02-03a.181129.h)

Does anyone really believe that?

VictorValiant
19th February 2014, 13:03
Based on his previous U-turns on retrospection then you cannot believe his comments. Particularly as they have already stated a figure of some 65,000 targeted in their own documentation. What amazes me is that -unless you are a contributor to this or similar forums - there is a good chance that you will not be aware of the proposals until it is too late: no forewarning; no "heads up"; no official letter summarising the intent - it will be law and you won't have a leg to stand on.

DonkeyRhubarb
19th February 2014, 13:26
Based on his previous U-turns on retrospection then you cannot believe his comments. Particularly as they have already stated a figure of some 65,000 targeted in their own documentation. What amazes me is that -unless you are a contributor to this or similar forums - there is a good chance that you will not be aware of the proposals until it is too late: no forewarning; no "heads up"; no official letter summarising the intent - it will be law and you won't have a leg to stand on.

Yep, the first most people will be aware of this is when the brown envelope arrives saying pay up in 90 days.

Some consultation it is when they don't even inform the people who will be affected.

zaphrus
19th February 2014, 18:16
It's interesting that the consultation duration lasted just 4 weeks, according to

Code of Practice on Consultation (http://www.berr.gov.uk/files/file47158.pdf)



And then



I'm guessing the provision will be "to get this ready in time for the budget", however I don't believe this was indicated in the consultancy document?

Then

Consultation Principles (https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/255180/Consultation-Principles-Oct-2013.pdf)





The most important part being



Is it possible that this consultancy has not abided by their own framework?


That's really interesting ... if they have violated their own consultation framework, then can it be argued that the proposed law cannot stand? If that's the case, then it would be worth trying to delay the law passing, as I'm sure I read in the draft legislation that a follower notice can only be issued within 12 months of either a case being opened, or a similar case being final (Boyle), now if the law wasn't able to pass until 12 months after the Boyle ruling, then follower notices could not be issued in respect of Boyle.

zaphrus
19th February 2014, 18:16
But David Gauke has said that "follower cases" will only affect 4,000 taxpayers in the next 2 years.

Tax Avoidance: 3 Feb 2014: Hansard Written Answers - TheyWorkForYou (http://www.theyworkforyou.com/wrans/?id=2014-02-03a.181129.h)

Does anyone really believe that?

Probably worth mentioning the discrepancy in figures when writing to your MP.

SantaClaus
19th February 2014, 23:12
It's interesting that the consultation duration lasted just 4 weeks, according to

Code of Practice on Consultation (http://www.berr.gov.uk/files/file47158.pdf)



And then



I'm guessing the provision will be "to get this ready in time for the budget", however I don't believe this was indicated in the consultancy document?

Then

Consultation Principles (https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/255180/Consultation-Principles-Oct-2013.pdf)





The most important part being



Is it possible that this consultancy has not abided by their own framework?

Very interesting point. It does say in the document that they have no legal obligation to abide by their own code which makes me wonder why they even bother with a code of conduct. Ah yes, I remember now... some overpaid management consultancy gets a huge fee to come up with this stuff.

Considering the usual consultation period is 12 weeks and they have only given us 4 weeks, despite this proposed legislation affecting 65,000 people, it stinks to high heaven. This is typical of the underhand way that HMRC go about their business.

I've sent this to the NTRT Steering Group to see if anything can be done. I think it's also worth stating in any communications to the consultation/your MP that HMRC/govt have broken their code of conduct.

flamel
20th February 2014, 10:59
My response has been sent for what it's worth, I say, feeling like King Canute in a sea of pirates known as HMRC

DonkeyRhubarb
20th February 2014, 12:39
According to our lobbying company, the code of practice on consultations has been superceded and there is no longer a requirement for 12 weeks.

This is especially true where there has been a previous related consultation, as in this instance with the consultation on "follower cases" last year.

So the one month period is legitimate.

SantaClaus
21st February 2014, 22:39
Dear all

Just a reminder that this weekend is your last chance to respond to the proposed legislation on ‘Tackling marketed tax avoidance’.

As you probably know, the Government intends to introduce an accelerated payment measure which will give HMRC the power to link your tax affairs to another person's case and demand money up front, with no right of appeal.

If HMRC are granted these powers, it will allow them to demand almost immediate payment of disputed tax before you have had the chance to have your case heard at the tax tribunal (FTT).

If you do one thing this weekend, be sure to spend 10 minutes firing off an email to ask that these proposals are rejected. This is your last chance, so don't bury your heads in the sand!

See here for exact instructions... Latest News | No To Retrospective Taxation (http://notoretrotax.org.uk/latest-news/)

With apologies and many thanks to everyone who has already responded! :hug:

Regards

Santa

jimbojones
23rd February 2014, 19:44
I sent in my submission. What now? Do we write to our MPs? Who else should we write to apart from our local MPs?

DonkeyRhubarb
23rd February 2014, 19:53
I sent in my submission. What now? Do we write to our MPs? Who else should we write to apart from our local MPs?

We wait until the budget next month to see what's included in the finance bill.

And then we get ready to bombard MPs.

fielder
23rd February 2014, 21:40
Sent my response by using the template, modified it slightly for my quick say and removed all the 'we' to ensure it reflects my opinions.

creativity
23rd February 2014, 23:28
Sent my response by using the template, modified it slightly for my quick say and removed all the 'we' to ensure it reflects my opinions.

As did I. Again re-written to reflect my opinion.

costo
24th February 2014, 19:38
Response from the Institute of Financial Accountants... (http://www.ifa.org.uk/files/ifatacklingmarketedtaxavoidanceconsultationfinal-1.pdf)

DonkeyRhubarb
24th February 2014, 20:13
Response from the Institute of Financial Accountants... (http://www.ifa.org.uk/files/ifatacklingmarketedtaxavoidanceconsultationfinal-1.pdf)

They don't pull any punches.

flamel
24th February 2014, 20:19
http://www.taxation.co.uk/taxation/Articles/2014/02/19/320751/elephant-room

DonkeyRhubarb
26th February 2014, 19:25
http://www.tax.org.uk/Resources/CIOT/Documents/2014/02/140226%20Tackling%20Marketed%20Tax%20Avoidance%20-%20CIOT%20response.pdf

:yay:

varunksingh
26th February 2014, 20:28
http://www.tax.org.uk/Resources/CIOT/Documents/2014/02/140226%20Tackling%20Marketed%20Tax%20Avoidance%20-%20CIOT%20response.pdf

:yay:

Thanks DR. Now waiting for some posters to say CIOT does not understand taxation as they are also saying it is retrospective.:tongue

smalldog
3rd March 2014, 13:56
and my big issue with all of this is that when/if HMRC get the cash from the follower notice, what is their incentive to prove its not actually their entitlement? Cant see them chasing cases through the courts to conclusion!

flamel
3rd March 2014, 16:31
Another published response:

http://www.icaew.com/~/media/Files/Technical/Tax/Tax-faculty/TAXREPs/2014/taxrep-16-14-tackling-marketed-tax-avoidance.pdf

DonkeyRhubarb
12th March 2014, 12:24
Advisers lead rearguard fight against avoidance rules | AccountingWEB (http://www.accountingweb.co.uk/article/advisers-lead-rearguard-fight-against-avoidance-rules/555153)

DonkeyRhubarb
12th March 2014, 16:54
http://www.taxchambers.com/sites/default/files/Response%20to%20HMRC%20Consultations.pdf

richt5a
12th March 2014, 17:20
http://www.taxchambers.com/sites/default/files/Response%20to%20HMRC%20Consultations.pdf

'Had we never had the Glorious Revolution of 1688 which firmly established that the
Administration is not a law onto itself but that its actions can always be called into
account in the Courts, had we not defeated the absolutist Napoleon Bonaparte, had Hitler
won the Second World War and we were now a fascist society and if we did not have a
Human Rights Act, HMRC’s proposals would, perhaps, make some sense. As it is, they
are utterly repugnant to the values of the people of the United Kingdom society in 2014.
That these proposals could now even be mooted, shows that there is something very
rotten in the state of HMRC.'

lfcynwa
13th March 2014, 10:36
I forwarded my concerns to my local MP regarding the Consultative Document and he has responded that he was already aware and also attached HMRC's response to his letter to them. If anyone would like a copy pm me your email address and I can email out..
It would be good to get peoples thoughts on HMRC's response..

lfcynwa
14th March 2014, 13:11
This is link to the MP theories on Tax Avoidance

Tackling tax avoidance | David Gauke MP - Member of Parliament for South West Hertfordshire (http://www.davidgauke.com/content/tackling-tax-avoidance)

DonkeyRhubarb
17th March 2014, 08:32
HMRC to seize hundreds of millions in new tax avoidance crackdown | News | Money Marketing (http://www.moneymarketing.co.uk/news-and-analysis/regulation/hmrc-to-seize-hundreds-of-millions-in-new-tax-avoidance-crackdown/2007090.article)

DonkeyRhubarb
17th March 2014, 08:55
From yesterday's Mail on Sunday

Argue later but pay NOW says taxman: Shock order means big bills for thousands in avoidance schemes including top celebrities and major companies | This is Money (http://www.thisismoney.co.uk/money/news/article-2581814/Argue-later-pay-NOW-says-taxman-Shock-order-means-big-bills-thousands-avoidance-schemes-including-celebrities-major-companies.html)

LisaContractorUmbrella
17th March 2014, 10:14
http://www.taxchambers.com/sites/default/files/Response%20to%20HMRC%20Consultations.pdf

Wasn't he the QC who advised quite a few of the IOM scheme operators?

DonkeyRhubarb
17th March 2014, 11:17
Wasn't he the QC who advised quite a few of the IOM scheme operators?

Don't know about that but apparently he's a close friend of Dave Hartnett.

Dave Hartnett - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/Dave_Hartnett)

'Chairman and head of chambers Robert Venables QC, close friend of Hartnett who was at the dinner, first told the intruders to "depart immediately, before we set the dogs on you", before finally ejecting them with the final words "You are trespassing scum. Go".'

AtW
17th March 2014, 11:29
Wasn't he the QC who advised quite a few of the IOM scheme operators?

On page 2 he says his name is quoted by some scheme promoters who took his advice and say so, but don't give details that he had not in fact advised that scheme was fit for purpose. Puts all those scheme peddlers into new light of their claims that QCs endorsed scheme - perhaps that can qualify as fraud (obtaining money by deception)?

LisaContractorUmbrella
17th March 2014, 11:40
On page 2 he says his name is quoted by some scheme promoters who took his advice and say so, but don't give details that he had not in fact advised that scheme was fit for purpose. Puts all those scheme peddlers into new light of their claims that QCs endorsed scheme - perhaps that can qualify as fraud (obtaining money by deception)?

I think it would certainly be misrepresentation but, let's face it, if anyone goes after these scheme promoters for anything they tend to disappear (taking their money with them presumably) which is why HMRC are targeting the consumer rather than the provider.

As an aside - he's got a good argument - these proposals do flout the rule of law. Everyone knows my feelings about tax avoidance but this really seems to be a step too far

LisaContractorUmbrella
17th March 2014, 11:42
Don't know about that but apparently he's a close friend of Dave Hartnett.

Dave Hartnett - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/Dave_Hartnett)

'Chairman and head of chambers Robert Venables QC, close friend of Hartnett who was at the dinner, first told the intruders to "depart immediately, before we set the dogs on you", before finally ejecting them with the final words "You are trespassing scum. Go".'

Interesting! I did like this quote: "In September 2010 Hartnett was widely criticised for refusing to apologise for the HMRC "scandal" that saw millions of people being asked for back dated tax after it was alleged that his department had failed to collect PAYE underpayments correctly. He told BBC Radio Four "I'm not sure a need to apologise ...We didn't get it wrong."[5] He later did issue an unreserved apology. :eyes

costo
19th March 2014, 20:25
Shouldn't the result of the consultancy document be released today...

Given that all comments have been ignored it would be interested to see their feedback? is it even possible given the huge responses they could even analyse it?

DonkeyRhubarb
19th March 2014, 20:29
Shouldn't the result of the consultancy document be released today...

Given that all comments have been ignored it would be interested to see their feedback? is it even possible given the huge responses they could even analyse it?

It was meant to be published today.

Our lobbyists Whitehouse phoned one of the HMRC contacts named on today's note.

They said they are still working on it. They did not know when it would be available.

Presumably after the law has been passed. :rolleyes:

costo
19th March 2014, 20:33
Thats interesting, it would almost seem that perhaps they had not finished analysing the document before pushing the laws through? Is that legal??

I was going to say "does HMRC care" but I kind of get the feeling this is the government not HMRC who are doing this?

DonkeyRhubarb
19th March 2014, 20:37
Thats interesting, it would almost seem that perhaps they had not finished analysing the document before pushing the laws through? Is that legal??

I was going to say "does HMRC care" but I kind of get the feeling this is the government not HMRC who are doing this?

Your feeling is probably right.

The document says the 43,000 cases add up to £7Bn. Quite a nice windfall ahead of a general election.

Juninho
19th March 2014, 20:59
I hope i am posting this in the right forum? Sorry my first post on here but I have been reading this and the other thread.

Based on what I understand from the HMRC website pdf - its July this year when the finance bill comes into play? Does that mean that worst case they will start sending letters straight away with 90 days to pay?

I make it October when they will expect people to pay up?

Is there a back of the envelope way to calculate what they will demand ? Can we apply the same calcs that were in any discovery assessments? i.e. ballpark 40% * amount received? And then possibly multiply that by 4% (compounding) for each year?

I just want to know the worst case situation I guess just in case...