BN66 - Time to fight back!!!

[DaveB]

Some schemes use a 'soft currency loan', e.g. they loan you £10K worth of ZWD. You pay interest in ZWD at HMRC approved rate. A year later that £10K loan is magically only worth 1p because Zimbabwe currency is in freefall. You give them 1p plus some nominal interest. Loan is cleared.

They cracked down on this a few years back to stop city traders getting their bonuses in bullion, diamonds etc. and dodging the tax. IIRC You are now taxed on the £ value of the remitance recieved, at the time you receive it, regardless of the form it takes.

[poppy01]

Im curious that according to HMRC's own guidance (I am quoting someone else here so not sure how true this is) MontP would actually be responsible for our bills and not us as they operate the scheme. Im wondering if HMRC are actually going after Montp and not us. If we have paid fees for a service (which trust accounts prove) under advice that we arent liable for tax then can HMR come after the individual...Ultimately if they are only after us, then Montp live on to fight another day to create more new schemes, wonder if they are going for the throat to shut them down entirely......

just thinking out loud here

That, in a nutshell, is the Tim Warr 'scheme'

[Bagpuss]

Are people still playing with these dodgy schemes? I though Dignatio had put most people off?

[smalldog]

so the Tim warr scheme is basically a one man campaign in cahoots with the commissioners to shut down MontP? hahaha is he being bankrolled by HMRC then....jeez it all sounds very dodgy....

PS - Bagpuss I havent been in the scheme for 2 years....

[ASB]

I wonder if they are using them to prove they can apply IR35 rules somehow?

I think there is zero % chance of that. However this is based on a premise that with the Montpelier scheme you are self employed. If this is the case then IR35 cannot apply anywhere. It really is that simple.

There is a whole load of other crap that can apply either to you (if a status enquiry determines genuine self employment) or the actual employer (whoever it is decided to be).

[smalldog]

I think there is zero % chance of that. However this is based on a premise that with the Montpelier scheme you are self employed. If this is the case then IR35 cannot apply anywhere. It really is that simple.

There is a whole load of other crap that can apply either to you (if a status enquiry determines genuine self employment) or the actual employer (whoever it is decided to be).

I wonder if they are trying to prove it was employment and in which case it is the employers responsibility to pay your PAYE and not yours...in that case would HMRC be going after the employer for non-compliance (MontP) and not us humble employees??...hmmm, now there would be a twist curiouser and curiouser

[Lewis]

They cracked down on this a few years back to stop city traders getting their bonuses in bullion, diamonds etc. and dodging the tax. IIRC You are now taxed on the £ value of the remitance recieved, at the time you receive it, regardless of the form it takes.

There are still schemes operating in this way to the best of my knowledge.

[Lewis]

Yes, I know. But you have earned £something deemed income, as a sort of Benefit in Kind, because you have had the personal use of the money. And it might seem a bit unlikely but if your source currency goes down rather than up...? It can happen.

By all means take on such a scheme, but be very clear what the exit strategy is...

I think the point of the interest payments on the loan is specifically so it is not a BIK. They can get around ccy rates, if the ccy goes up then the loan is switched to a different ccy.

[poppy01]

I think there is zero % chance of that. However this is based on a premise that with the Montpelier scheme you are self employed. If this is the case then IR35 cannot apply anywhere. It really is that simple.

There is a whole load of other crap that can apply either to you (if a status enquiry determines genuine self employment) or the actual employer (whoever it is decided to be).

Does anyone know why we were able to operate as self-employed under MTM, but arent allowed to in a 'normal' fashion like a plumber or whatever. The big problem with ir35 has always been first we pay employers and employees nic's without (in hmrc's view) being an employer (nobody else has to do this) , and two we cant claim legitimate business expenses. wouldnt genuine self-empoyment be the most sensible option...removes dividends but just 'seems' fairer, more people would probably go along with it

[malvolio]

Does anyone know why we were able to operate as self-employed under MTM, but arent allowed to in a 'normal' fashion like a plumber or whatever. The big problem with ir35 has always been first we pay employers and employees nic's without (in hmrc's view) being an employer (nobody else has to do this) , and two we cant claim legitimate business expenses. wouldnt genuine self-empoyment be the most sensible option...removes dividends but just 'seems' fairer, more people would probably go along with it

Or just run a normal LtdCo and ensure you are outside IR35 perhaps?

The snag with your scenario is what used to be called S134c: the agency is liable if you don't pay your taxes, hence the need for the intermediary company. You can go SE if you don't need tio use an agency and if your client is willing to accept the risk of being stuck with your tax bill. So that'll be a no then...