Loans from EBTs and other Trusts

[DonkeyRhubarb]

Didn't HMRC's legal team come up with BN66/s58 though? For that, they will never be forgiven or have my sympathy.

It was a barrister from an external tax chamber. (Bloody lawyers!)

Of course HMRC jumped at the chance to dig themselves out of a massive hole and also stick one on Montpelier at the same time.

Most of the individuals involved have left HMRC.

[BrilloPad]

Mate, I know you get a bit twitchy at times but personal attacks on someone who does a hell of a lot to keep this place up and together is not acceptable. I don't expect you to apologise as it took over a year and 50 emails to squeeze one out of you last time - and even then I think you had your fingers crossed when you wrote the email

You may have little respect for the majority of the other inhabitants of this planet but have a bit of respect for the mods on here who suffer enough as it is.

Anyway, ignored your request to let stonecircle stay. I don't see the point in going over all of this again.

I apologize. This time without CPBWRN forcing me into it. And a cellar of salt over my shoulder.

However next time there are trolls on the BN66 thread, I think it would be better to delete their post or move to another thread - and a PM to them explaining why. I am happy to debate in any other thread. Thats just a personal opinion - your board, your rules. No need to reset my post count to 0....

[normalbloke]

It was a barrister from an external tax chamber. (Bloody lawyers!)

Of course HMRC jumped at the chance to dig themselves out of a massive hole and also stick one on Montpelier at the same time.

Most of the individuals involved have left HMRC.

I'm sure the barrister in question (I wish I knew who) didn't just come up with it out of the blue. He/she must have been primed by HMRC who were up tulip creek and needed the biggest paddle in the box to get them out of it.

[DonkeyRhubarb]

I'm sure the barrister in question (I wish I knew who) didn't just come up with it out of the blue. He/she must have been primed by HMRC who were up tulip creek and needed the biggest paddle in the box to get them out of it.

That's the assumption yes.

HMRC claim they could have won in court anyway but just went for retro to bring closure more quickly.

No-one believes that for a minute and, 7 years on, it didn't exactly speed up closure either.

[webberg]

That's the assumption yes.

HMRC claim they could have won in court anyway but just went for retro to bring closure more quickly.

No-one believes that for a minute and, 7 years on, it didn't exactly speed up closure either.

The debate and rather desperate defence put up at the time seems to indicate that the legislation was cobbled together by the normal draftsman in Parliament (who operate anonymously) rather than the result of a committee run by a QC who make recommendations and write the law?

Not that it helps much to be honest.

[jolly fellopian]

This will be my first and last response to the above comment and some others from this poster.

Retrospective taxation is a very dangerous weapon for politicians and every year the Treasury Committee report into the Budget makes it very clear that instances of its use have to be confined to the very worst excesses (loopholes if you like) as otherwise the uncertainty created in the tax system leads to nervousness amongst investors, particularly incoming investment from outside the UK. These days there is also a recognition that tax relief for certain areas can create a tilted playing field within the EU that is likely to be jumped upon with great glee and political embarrassment.

Thus retrospective taxation is generally considered a bad thing for political and economic reasons.

The fault lies with the politicians. Firstly, they have created a massively complicated tax system because their focus is upon short termism and getting elected rather than have a coherent and simple system. Secondly, they have failed to appreciate the medium and long term consequences of knee jerk policy making. IR 35 is a spectacular piece of misjudgement that forced changes in an industry that was settled. The same could be said of film schemes. Thirdly, they have largely failed to uphold their side of the tax covenant. People would pay a "fair" tax if they could trust that it would be spent in a "fair" way. Whilst we all have hobby horses about how money should be spent by the State, most would feel that people trusted to make decisions should be above expenses fiddling and writing law that protects themselves from retrospection. Instead we get a "do as we say" and not a "do as we do" situation. Any wonder they cannot be trusted.

So your point is that due to the expenses scandal, everyone else must be allowed to be corrupt too? The world will never be sufficiently ethical for you to accept that taking extreme measures to avoid paying tax is unacceptable. Nor will public spending ever be sufficiently to your liking for you to pay your fair dues. If everyone had this mindset, there'd be no public finances (and no roads, schools, hospitals, defense, etc). Who are you suggesting is above retrospection? That’s the whole point of ret tax: it doesn't matter if you can afford PwC to do your taxes any more. If there’s no explanation for your financial decision other than to avoid tax, then you have no place to hide.

Some fault lies with greedy people, that is undeniable.

Some fault lies with organisations with an agenda that requires headlines at the expense of accuracy. The $13 trillion number is I think from a UN think tank? There is no analysis of whether that figure is after tax has been paid or not. There is no indication that differences in tax and banking systems has been taken into account. There is no analysis of how much of that value is from regimes with mostly effective tax systems (western Europe and what might be called first world countries) and those whose systems are not fit for purpose. (I recall seeing reports that in some countries the taxpaying population is 3% of the total population and that some elected members of that country's parliament report income that is less than their official salary whilst owning vast assets).

Of course this is pre-tax! Tell me webberg, why would you store your wealth in secretive tax havens if you were willing to pay your fair share of tax? Are you a shamen? Do you believe your money is spiritually more at peace if it’s near a Cayman Island beach? Just because banana republics have 3% tax payers, doesn't mean we in the civilised world should give up collecting tax. That is a low-aspiration, BS argument quite frankly. Whether it’s higher or lower than £13tn, ret tax is an important tool in the fight against the burgeoning kleptocracy we consider our lawful democracy.

To move away from geo politics and the desire for certainty in the economy and make things more personal.

The UK Government made bad law with unintended consequences. It allows some of those consequences to remain (lower contractor rates) and attacks others (lower tax take). That is an inconsistency that is made worse by a dilatory and incompetent approach from the relevant tax authority which looks and feels like retrospection when in fact it's just a failure to do the job they're meant to do.

I don’t understand the point you are making. Tax loopholes exist in every sophisticated economy. The question is whether to continue as we did for decades feebly closing each loophole one-by-one, continue to play poker against the tax-avoidance industry’s loaded deck, or to, with a single stroke, say “enough is enough, just pay your fair share and do something productive with your lives.”

The position is made worse because the regulatory system allows "IFA's" with limited knowledge and oversight to hold themselves out as "experts" in tax and other areas. More intervention to remove the obvious ringers here would have been better and prevented a lot of today's problems. Only now is it recognized that these people were not fit for purpose. That's too late for many people and an attempt to recover costs and loss via a mis-selling claim is easily avoided by "phoenixing" into a new entity.

There will always be spivs. By the introduction of ret tax, we are shining a light on them. Their complicated schemes, that serve no public good and are only designed to reduce contribution to the public purse are now exposed for what they are – conniving dodges of your responsibility to society.

So contractors were faced with calls for lower rates by employers, that means lower overheads (tax is one), easier administration etc. Faced with a new system (IR35) and making guesses as to the future, why not go a poorly regulated "expert" who promised low cost, guaranteed results? Would it be reasonable to expect a Government agency, responsible for managing the system, to have acted with more haste and intervention? Instead by sitting on their hands and allowing a problem to grow, HMRC is at least complicit in the problems now being faced.

There’s a case for an amnesty period to allow wrong-doers to come clean, but ret tax must happen.

So retrospection is not and never has been a good idea.

When it comes to tax, is and always will be. If you’ve nothing to hide, you’ve nothing to fear.

Good and timely management of the rules both in making and applying them is needed and in that the politicians and machinery of Government has let down the contractor community.

You are living in utopia. Perhaps when we go back to a hunter-gathering & subsistence-farming economy, the tax system will be sufficiently simple for unintended tax loopholes to cease to exist. Until that day, we need ret tax.

I have a lot of sympathy for contractors (and others in similar situations) who can justifiably feel that they are victims here. True retrospection as seen in s58 is adding insult to injury.

I too have sympathy for those who weren’t given the chance to correct their mistakes, but arguing against ret tax in principle is not the answer, and will not help their cause.

[normalbloke]

Here we go again...

", ret tax is an important tool in the fight against the burgeoning kleptocracy we consider our lawful democracy."



I'm only saying this once more. We broke no laws yet are getting punished. Aye..it's a fine upstanding 'lawful democracy' we live in.

Anyway.... ......

[DonkeyRhubarb]

I'm sure jolly fellopian feels better getting that off his/her chest.

[slatt]

A lot of JF's arguments sound very similar to those posited by some recently banned posters....

It's probably just coincidence though

[webberg]

Some arguments are just not founded in logic and consequently rational and objective debate is pointless.

If retrospective tax is inevitable, why do we see it only in rare cases and why does Treasury Committee warn about the dangers every Budget?

I accept that the philosophy I propounded requires that the Executive, Judiciary and Administrative branches of Government work together in a way not seen to date. Is that Utopian or looking for improvement?

The law recognises that this is unlikely and imposes upon these institutions time limits and procedures to ensure that their faults do not result in those governed paying for them, morally or financially.

Retrospection is a breaking of that covenant (and arguably denies the Separation of Powers position that is the very core of democracy).

Anyway I'm sure JF is somehow another iteration of an already banned person who just wants to rub salt into a wound. No more posts on this.