AM Limited COP8 HMRC Investigation Letter..

[centurian]

I reckon that when Montpelier will drop the s58 lot if they stop trading.

Agreed. Their commitment to carry on fighting is because of the damage to their reputation if people see 100s of their customers getting bankrupted from joining their scheme, which would impact their bottom line of their continued business.

But there is always a limit - at some point a bean counter will calculate that the cost of fighting is more than the amount of lost revenue. For the big operators like Montpelier, this is a pretty high bar, but for a small outfit, the directors may conclude it's cheaper to close down and start up again, rather than spend a fortune fighting it.

[neo222]

While looking on the AM Limited website, I found this interesting paragraph on the FAQ section;

"How will I know my tax affairs are taken care of?

We will deduct the necessary tax on all payments to you, and calculate, complete and submit your tax return for you. We will also arrange for payment of your tax to HMRC on a basic rate tax basis."

Interesting that they state, they will pay the necessary tax on all payments to me. So, if HMRC tell me I owe more tax, I just give AML a call and ask them to pay it for me?

[BrilloPad]

Interesting that they state, they will pay the necessary tax on all payments to me. So, if HMRC tell me I owe more tax, I just give AML a call and ask them to pay it for me?

[wimpler]

You participated in a legal scheme to reduce your tax liability. There's nothing immoral or illegal in that. Anyone wanting to pay more tax is freely able to do so.

Firstly, don't ruin yourself by posting self-loathing, immolation material. These fora are read by the HMRC who will gladly recite admittances of guilt to help line their coffers.

Secondly, contact AML who will almost certainly reply on your behalf. And don't speak to HMRC without appropriate legal and tax representation.

Don't for a second think that all wealthy government officials haven't consulted tax lawyers to minimise their tax liability. They will pay what they have to and not a penny more. You're no different. In fact, George Osborne is himself the beneficary of a trust fund, very probably designed to reduce tax exposure. He even "flipped" his second home in order to pay less capital gains tax.

HMRC are sending out COP8 letters to all those who they think can pay more tax. It costs them the price of a stamp and many will immediately opt out of whatever scheme they're part of and revert to paying more tax. It's a no-brainer. If I was running the HMRC I'd have done this a long, long time ago.

[LandRover]

Wimpler is spot on imho.

Many in the government are directors and have various investments that take advantage of many arrangements to pay only what is necessary in tax.

The hypocrisy is incredible!!!

You should always deal with your previous employer in dealing with HMRC, I would strongly advise not having ANY correspondence directly with HMRC. Many of these arrangements were registered and known to HMRC, you paid appropriate amount of tax that was required. Get this straight YOU DID PAY TAX. The reason for the mailshot trying to scare many, is the Dec 9th 2010 ruling, and it is from this date until Apr 2011 that is being deemed to be deliberate avoidance, but i suspect many companies had forseen this and appropriate arrangements were made. So please dont get hugely stressed, the letters were sent to cause panic.

The tax system is a mess, its deliberately over compliated, and needs major overall.

[cojak]

Hmmm...

2 first time posters. Obviously without those brown envelopes shoved through their letterboxes...

..and i would advise people looking at these schemes to ask HOW MUCH TAX WILL I PAY? Because between your 85%+ take home and their fee you can bet your sweet patootie that it won't be as much as HMRC are expecting.

[centurian]

2 first time posters.

My thoughts exactly...

[LisaContractorUmbrella]

Wimpler is spot on imho.

Many in the government are directors and have various investments that take advantage of many arrangements to pay only what is necessary in tax.

The hypocrisy is incredible!!!

You should always deal with your previous employer in dealing with HMRC, I would strongly advise not having ANY correspondence directly with HMRC. Many of these arrangements were registered and known to HMRC, you paid appropriate amount of tax that was required. Get this straight YOU DID PAY TAX. The reason for the mailshot trying to scare many, is the Dec 9th 2010 ruling, and it is from this date until Apr 2011 that is being deemed to be deliberate avoidance, but i suspect many companies had forseen this and appropriate arrangements were made. So please dont get hugely stressed, the letters were sent to cause panic.

The tax system is a mess, its deliberately over compliated, and needs major overall.

The appropriate amount of tax was paid according to the company who set up the scheme not according to HMR&C and it won't be the tax QC who 'approved' the scheme that will be required to pay your tax bill when it arrives. If you do get a letter from HMR&C I would suggest that you don't panic but do get proper representation and certainly don't think that any amount of Government hypocrisy will prevent HMR&C from pursuing people that they have determined have avoided paying their 'fair share'

[LandRover]

Two first time posters?

So what...some of us are in similar situations, so dont jump to assumptions, tut tut.

As for the comments about legalities....well hypocrisy is indeed at play...LTD company imo is just another tax avoidance. Why pretend otherwise because people who use them are doing so for what reasons? lol
To think somehow one arrangement is deemed more appropriate than another is subjective...

Stones and Glasshouses comes to mind....otherwise everyone would be paying same tax as PAYE.

[DonkeyRhubarb]

Two first time posters?

So what...some of us are in similar situations, so dont jump to assumptions, tut tut.

As for the comments about legalities....well hypocrisy is indeed at play...LTD company imo is just another tax avoidance. Why pretend otherwise because people who use them are doing so for what reasons? lol
To think somehow one arrangement is deemed more appropriate than another is subjective...

Stones and Glasshouses comes to mind....otherwise everyone would be paying same tax as PAYE.

Most contractors have to operate through a Ltd company. Agencies/clients insist on it. (Of course it doesn't have to be their own company, it could be an umbrella.)

However, I totally agree with you that there is a degree of hypocrisy here. No-one forces anyone to choose option (1).

1. small salary/large dividend (LOW TAX)
2. large salary/no dividend (HIGH TAX)

You may call it tax planning, rather than tax avoidance, but YOU are still choosing to pay less tax.