2019 tax charge - consultation preparation

[DonkeyRhubarb]

Not for sellers of the loan schemes, but for the buyers situation is very different, the end result is terrible for a lot of people and it makes little difference if technically "loan" schemes "worked".

Specifically HMRC will get loan users with new tax and lets not forget APNs and years of anxiety, divirces, bankrupcies - how can you say loan schemes did not fail for the buyers???

And not just loan schemes. The overwhelming majority of schemes have turned out to be an unmitigated disaster. Only for the users of course. Some sellers, I know of, have made a fortune out of it.

And there are still unscrupulous firms flogging them now. And idiots buying them.

Arguably, HMRC should have done more, years ago, to crack down on the sellers.

[squirrel]

I struggle to see how paying someone via a trust and loan (as opposed to paying them with normal a normal salary/bonus) has any business or commercial purpose.

What would be your definition and purpose of an EBT?

Not in terms of contractor umbrellas, but why were they created in the first place?

[flamel]

Arguably, HMRC should have done more, years ago, to crack down on the sellers.

Why would they bother?
They know that they will get the money in the end plus a better than market rate of interest (3%) plus a bonus penalties.

Add to that, I've never seen HMRC doing anything proactively in my life, then you have perfect conditions for a mass of advisers, who in reality, have no idea what HMRC will do next as they can always get a retrospective law change put through to change the landscape. Now they can even open up a closed year! So there's never any certainty.

[DonkeyRhubarb]

They know that they will get the money in the end plus a better than market rate of interest (3%) plus a bonus penalties.

Assuming people still have the money "in the end".

I wonder how many £billions have been made selling schemes over the past 15 years? That's probably something HMRC would not want to talk about.

[DonkeyRhubarb]

Actually, it's quite easy to work out.

Take £100k gross.

Most promoters took a 10% fee (£10k).
Users received typically £20k as salary.

That leaves £70k as loans. Assume HMRC assessed this at 40% (28k). Round it up to £30k unpaid tax.

So, for every £3billion that HMRC now says is due from scheme users, the promoters would have earned £1billion.

And HMRC stood by and let this happen.

[flamel]

Actually, it's quite easy to work out.

Take £100k gross.

Most promoters took a 10% fee (£10k).
Users received typically £20k as salary.

That leaves £70k as loans. Assume HMRC assessed this at 40%. Round it up to £30k unpaid tax.

So, for every £3billion that HMRC now says is due from scheme users, the promoters would have earned £1billion.

And HMRC stood by and let this happen.

They probably stashed the money in Panama.

Remember the original expression "Big Society", i.e. the wealthy and the big corporations win out at the expense of individuals, who remain powerless. David Mitchell called it "Corpocracy"

One of their agents of misery is HMRC, who have become all powerful, even to the extent of changing the laws of the land. They want to create fear uncertainty and distress, it's their job. They want you to work for a big corporation (preferably at the minimum wage) so you are owned and can be controlled.

It's not just a question of collecting the tax, they want to go after individuals so the message can go out that HMRC are in charge.

Obviously, they could save a lot of time and effort by going after big corporations and the wealthy, but then their powerful empire would have to shrink in size and influence.

[StrengthInNumbers]

I guess all would have settled if HMRC offered a sensible opportunity. Equate all contractors to PAYE and without interest or IHT and subtract what we paid to scheme providers and it will be huge success.
But instead HMRC is try to be like Mafia by telling politicians that let's destroy 10000s of families and claim balanced budget. We were not like looking for ways to avoid tax but we were sold schemes as more compliant way of working. It seems like HMRC is hell bent on punishing buyers of wrong product instead of sellers and creators of products. All because collection from sellers is difficult. And thus making regulation after regulation to get poor buyers punished.
Iliketax I would request put yourself in contractor shoes and I am sure u will realise how this is what government is doing.

[DonkeyRhubarb]

All because collection from sellers is difficult.

Yes, the only way they can recover the lost tax now is from the buyers.

But perhaps they should have done more, to stop the tax being lost in the first place, by stopping the sellers.

Even now, as far as I can tell, they are doing nothing to stop the sellers continuing to sell.

[neil99]

And not just loan schemes. The overwhelming majority of schemes have turned out to be an unmitigated disaster. Only for the users of course. Some sellers, I know of, have made a fortune out of it.

And there are still unscrupulous firms flogging them now. And idiots buying them.

Arguably, HMRC should have done more, years ago, to crack down on the sellers.

Amazingly these people : Retain up to 90% contract value with Contractor Pay 'You can be assured that our market-leading planning strategies are fully supported by the written Opinion of Senior Tax Counsel and comply with all UK Taxes Acts legislation (this can be verified by your independent professional advisers) and are specially designed to avoid IR35. Our ethos is to ensure full legal compliance.

I hope nobody is daft enough to even consider this kind of thing.

[flamel]

I guess all would have settled if HMRC offered a sensible opportunity. Equate all contractors to PAYE and without interest or IHT and subtract what we paid to scheme providers and it will be huge success.
But instead HMRC is try to be like Mafia by telling politicians that let's destroy 10000s of families and claim balanced budget. We were not like looking for ways to avoid tax but we were sold schemes as more compliant way of working. It seems like HMRC is hell bent on punishing buyers of wrong product instead of sellers and creators of products. All because collection from sellers is difficult. And thus making regulation after regulation to get poor buyers punished.
Iliketax I would request put yourself in contractor shoes and I am sure u will realise how this is what government is doing.

Everyone would settle if HMRC offered something sensible!

Given it's HMRC, I'm not holding my breath though.