Sanzar Partnership? New IOM company

[malvolio]

And you are a tax barrister, yes?

No, which is why I said "some really subtle legal argument". The rest is experience and observation.

And to be brutally frank, I really couldn't care less either way if someone gets stiffed for £100k back tax legally owed as a result of playing games with the UK tax system and making things like IR35, S660 and FBT happen as a result. It will be a shame for their bank account but I will have no sympathy with them. That's probably not a view that will be readily understood, I accept, but there you go.

[BrilloPad]

Best post so far was the one from friendly accountant - probably only 50 people in country can tell.

Montpelier say they have been to one of those 50 people and I believe them. Now they could tell me what that person said - but that would harm Montpelier's case. Best way is to see it out in court.

For me it is a no brainer - I am sure others will say the same about limited.

[Ardesco]

I personally believe that all retrospective legislation is wrong. Sure you may make a mistake when you legislate that opens up a cunning tax dodge, but the way to deal with it is quickly stamp on anybody using the loophole by legislating a change quickly.

You do not let people do it for 20 years and then turn round and tell people that you are going to criminalise them and force them to pay back tax/fines for the past 20 years because "it is only fair".

The fact that they have known about this loophole for so long and done nothing about it should be held up as proof that it was accepted as a legal loophole and the people who have been using it should not be liable.

I personally will not use any of these "dodgy" off shore schemes because I am unconvinced of their legality, however if it turns out they were perfectly legal it is well within the right of the government to make them illegal from next year to stop people taking advantage of them. It is wrong to make them retrospectively illegal and turn a large proportion of law abiding citizens into criminals through no fault of their own.

It is cynical and wrong, and if they can do it in this instance what is to stop them doing it to all of us LTD Co owners in the future?

[BrilloPad]

No, which is why I said "some really subtle legal argument". The rest is experience and observation.

And to be brutally frank, I really couldn't care less either way if someone gets stiffed for £100k back tax legally owed as a result of playing games with the UK tax system and making things like IR35, S660 and FBT happen as a result. It will be a shame for their bank account but I will have no sympathy with them. That's probably not a view that will be readily understood, I accept, but there you go.

I really don't expect any sympathy from you. In this case the risks are known. and judgement open. unlike the family courts.

But on the "IR35, S660 and FBT" I think discussion should be switched to the moral duty to pay tax thread. There will always be someone trying something - "IR35, S660 and FBT" would have happened anyway.

[malvolio]

I really don't expect any sympathy from you. In this case the risks are known. and judgement open. unlike the family courts.

But on the "IR35, S660 and FBT" I think discussion should be switched to the moral duty to pay tax thread. There will always be someone trying something - "IR35, S660 and FBT" would have happened anyway.

OK, I was being extreme (hey, this is Malvolio speaking, remember!) but the point stands - this government reacts to small problems by enacting rules that affect large numbers of otherwise innocent people.

Actually I'm in an interesting dichotomy here. I don't agree with people going out of their way to avoid tax by any means (you should read some of my rants against Philip Green and friends), but I don't like the whole concept of retrospective legislation either. It will be interesting to see what comes of this whole issue, but I have a sneaky feeling that BN66 is somehow based on something other than a re-interpetation of existing laws.

[ChimpMaster]

http://www.hmrc.gov.uk/budget2008/bn66.pdf

Interesting comment under Operative Date - "The first measure will be treated as having always had effect. The second measure will have effect for income arising on or after 12 March 2008."

Maybe I'm missing something, but although the article implies that the law will have changed, it isn't explicitly deemed that back-taxation will be enforced. Collecting back taxes would be a very difficult task for the HMRC to go through for this measure.

[malvolio]

http://www.hmrc.gov.uk/budget2008/bn66.pdf

Interesting comment under Operative Date - "The first measure will be treated as having always had effect. The second measure will have effect for income arising on or after 12 March 2008."

Maybe I'm missing something, but although the article implies that the law will have changed, it isn't explicitly deemed that back-taxation will be enforced. Collecting back taxes would be a very difficult task for the HMRC to go through for this measure.

What they are saying is that they will redraft the rules to make the intended scope absolutely clear (i.e. there is no exemption), and they will enact a law to allow them to apply that revised rule from March 2008. Which to my mind doesn't mean back tax becomes claimable under these provisions.

But - whether or not they have another route to claim up to 6 years back tax because you have been under-declaring the tax you owe because you didn't understand the original rule is a whole other question...

[iansbud]

a quote from the letter from HMRC to me "The consequence of the announcement is that assuming the proposals become law, the share of income.....will be chargeable on you for every year in which such income arose or arises........ ..... interest is currently running at 8.5% per annum on tax paid late. Interest will be chargeable from the original due date(s) for each year and not from the date the proposals become law".

So their intentions seem clear - whether this is just threatening tactics or what i am not sure.

[DonkeyRhubarb]

Hi

Just thought I'd introduce myself. I stumbled on this thread in the last few days while searching for more info on the new legislation.

I joined the MTM scheme when it was first launched in 2001 and was in it for about 4 years until I stopped contracting. I have been under investigation now for almost 5 years. The lack of progress was frustrating at times, and in a way it's good to see matters finally coming to a head.

I still keep in contact with other contractors in the scheme. In the early days, I wouldn't have posted on a public forum but as everything is all out in the open now I don't see any need for discretion.

I don't expect much to happen now until the Finance Act receives royal ascent in July. Personally, I think HMRC are pushing their luck trying to apply legislation retrospectively over 20 years back but I have no doubt that MTM will challenge it if they do. HMRC have been aware of the scheme for at least 5 years, and perhaps if they had acted more quickly to close the loophole in the first place then they wouldn't have needed to contemplate such drastic measures.

I will update the thread if I come across anything interesting.

[BrilloPad]

Just thought I'd introduce myself. I stumbled on this thread in the last few days while searching for more info on the new legislation.

I joined the MTM scheme when it was first launched in 2001 and was in it for about 4 years until I stopped contracting. I have been under investigation now for almost 5 years. The lack of progress was frustrating at times, and in a way it's good to see matters finally coming to a head.

I still keep in contact with other contractors in the scheme. In the early days, I wouldn't have posted on a public forum but as everything is all out in the open now I don't see any need for discretion.

I don't expect much to happen now until the Finance Act receives royal ascent in July. Personally, I think HMRC are pushing their luck trying to apply legislation retrospectively over 20 years back but I have no doubt that MTM will challenge it if they do. HMRC have been aware of the scheme for at least 5 years, and perhaps if they had acted more quickly to close the loophole in the first place then they wouldn't have needed to contemplate such drastic measures.

I will update the thread if I come across anything interesting.

please keep us updated. one question - why do you say things are coming to a head? My understanding is that MTM trying to get HMRC to challenge them but HMRC just resort to usual bully boy tactics. HMRC know they will lose...