Sanzar Partnership? New IOM company

[THEPUMA]

The schemes in question pre-dated the disclosure rule.

But as someone else has indicated. I don't see how the disclosure rule can be used as a defence to an offshore scheme. The dodgy deal is the moving of the money offshore in the first place, not what is done with it when it gets there.

tim

There may be some confusion here. I don't mean under the new tax avoidance scheme disclosure regime. I mean simply disclosing on your personal tax return full details of the transactions that have taken place.

Dodgy is quite a harsh word. In many ways, those on the IOM schemes are very similar to those who are avoiding IR35 when HMRC would have intended them to be caught by it. They are paying less tax than HMRC would want by taking advantage of some poorly written legislation (or double tax treaty in the IOM case).

[Bradley]

Legislation

The legislation says:

Regulation 11: Arrangements excepted from [hallmark] 5
(1) The arrangements specified in this regulation are—
(a) those described in paragraph (2); and
(b) those which are of the same, or substantially the same, description
as arrangements which were first made available for
implementation before 1st August 2006.

See http://www.hmrc.gov.uk/ria/disclosure-guidance.pdf at 6.6.1

One example would be a Padmore variant as this is mentioned in the HMRC manuals.

The schemes in question pre-dated the disclosure rule.

But as someone else has indicated. I don't see how the disclosure rule can be used as a defence to an offshore scheme. The dodgy deal is the moving of the money offshore in the first place, not what is done with it when it gets there.

tim

[tim123]

Bradley,

I don't see which point it is you are commenting upon?

tim

[Bradley]

Info

Hi Tim

For info only. I'd agree with you as the only motive can be tax avoidance hence my comment re s720 ITA 2007.

I've seen some schemes use the defence I quoted but its complete b*ll*cks as far as I'm concerned.

You'll also note from the guidance that even if you look at a scheme you're supposed to disclose as a potential user of the scheme and the penalties for not doing so are something like £500 per day. So beware if you sit down with promoters of these schemes and they don't give you a believable explanation of why they think it shouldn't be disclosed. If it is disclosable then HMRC could end up pursuing you to ask why you didn't tell them about the scheme you had details of.

Bradley,

I don't see which point it is you are commenting upon?

tim

[BrilloPad]

The schemes in question pre-dated the disclosure rule.

But as someone else has indicated. I don't see how the disclosure rule can be used as a defence to an offshore scheme. The dodgy deal is the moving of the money offshore in the first place, not what is done with it when it gets there.

tim

Any decent IOM company will have an onshore ltd company. This takes the risk away from client and agency.

Some agents wont deal with these onshore ltd companies. Usually when they are trying to promote their own scheme.

[tim123]

Any decent IOM company will have an onshore ltd company. This takes the risk away from client.

I don't see that it does.

Tax legislation makes the taxpayer liable for any scheme that he is using. If the taxpayer doesn't understand the scheme, that is no defence.

We have to be clear here. We are not discussing whether the scheme is legal or not, we are discussing the level of penalties that might be applicable if it isn't.

ISTM, that by using this scheme, a UK Resident & Domicile taxpayer has *deliberately* sought to make UK based earnings into offshore earnings in order to avoid tax. ISTM that any user of the scheme would be find denying that he knew the money was moving offshore, impossible.

I do not see how, if the scheme is declared ineffective, that the taxpayer has any defence to the imposition of penalties applicable for deliberate attempt at evasion.

tim

[Bradley]

"Professional" Help

I don't see that it does.
I do not see how, if the scheme is declared ineffective, that the taxpayer has any defence to the imposition of penalties applicable for deliberate attempt at evasion.

If you could show that you had relied on professional advice then you could mitigate the penalties to some extent but not entirely extinguish them.

[BrilloPad]

I don't see that it does.

Tax legislation makes the taxpayer liable for any scheme that he is using. If the taxpayer doesn't understand the scheme, that is no defence.

We have to be clear here. We are not discussing whether the scheme is legal or not, we are discussing the level of penalties that might be applicable if it isn't.

ISTM, that by using this scheme, a UK Resident & Domicile taxpayer has *deliberately* sought to make UK based earnings into offshore earnings in order to avoid tax. ISTM that any user of the scheme would be find denying that he knew the money was moving offshore, impossible.

I do not see how, if the scheme is declared ineffective, that the taxpayer has any defence to the imposition of penalties applicable for deliberate attempt at evasion.

tim

Of course the IR now has the right to apply legislation respectively - so it could increase basis rate tax going back to Aug 2004 (is that when the new rules came in?).

And now they want to be able to take your home - and to apply penalties without going to court.

Whatever you do you are stuffed anyway.

[IR35 Avoider]

I don't see that it does.

Tax legislation makes the taxpayer liable for any scheme that he is using. If the taxpayer doesn't understand the scheme, that is no defence.

I think "client" in the post you're responding to means the contractor's client, not the contractor.

Though how that relates to the rest of the conversation, I'm not quite sure.

[mailric]

heres an idea...

if your that desperate for a few extra quid then rob a bank, less risky as you'll do less time if your caught...

baseball bat = maybe 1 year

knife = 3 years perhaps

shotgun = 5 years +

as you'll note, its only if you actually shoot the bank clerk will you end up doing more time than if you try and dodge a few grand on the tax bill.

who's in?