BN66 - Time to fight back!!!

[expat]

If you believe that contractors should pay the same tax as everyone else then you are obviously a better person than me. However, I haven't come across many contractors who share this view, and most people I know have taken one route or another to circumvert IR35.

You believe that contracyors should not pay the same tax as everyone else? This is rich.

[BrilloPad]

Not really, bit of schadenfreude perhaps.

But have you ever thought that is we didn't have all these interesting and innovative ways for people to avoid tax, we also wouldn't have IR35, S660, FBT, P35 Q6 and whatever they come up with next year?

Just a thought...

This post is unworthy of your usual quality. Those would have appeared anyway - HMRC think we are disguised employees.

And at the moment it is still uncertain whether MTM will win or lose. You might end up with the last laugh - but so might I.

[BrilloPad]

You believe that contracyors should not pay the same tax as everyone else? This is rich.

try this thread :-

http://forums.contractoruk.com/gener...y-pay-tax.html

[neilawuk]

malvolio.....its cat and mouse...every year HMRC change some element of tax legislation to close a loophole down and its not just limited to contractors as you probably know....just look at the budget to see all the other tax changes....there is not such thing as a perfect system. From a pure tax perspective I think it very wrong that we as the general public pay double if not triple tax sometimes. We get taxed on pay, then pay tax for goods and services on pay we have been taxed for..then we pay stamp duty and then we pay VAT using money we have been taxed for once already...nice....

and you call us immoral....jeez

[DonkeyRhubarb]

But have you ever thought that is we didn't have all these interesting and innovative ways for people to avoid tax, we also wouldn't have IR35, S660, FBT, P35 Q6 and whatever they come up with next year?

I am happy to respond to this because you raise a genuine point.

However, I think you've got it the wrong way round. If the government hadn't introduced ir35, then (a) people wouldn't have gone looking for more convoluted solutions and (b) the more aggressive tax planners wouldn't have stepped in to fill the gap.

I think the government are determined that everyone should pay the same level of tax, and I suspect it is only a matter of time before they try to bring in a general anti-avoidance rule (GAAR) like they already have in some other countries.

http://www.hmrc.gov.uk/consult/consult_1.htm

Let's hope Brown, Darling et al are not around long enough to implement this!

[Dow Jones]

Missed the point (again)

Not really, bit of schadenfreude perhaps.

But have you ever thought that is we didn't have all these interesting and innovative ways for people to avoid tax, we also wouldn't have IR35, S660, FBT, P35 Q6 and whatever they come up with next year?

Just a thought...

Marvolio is right - again.
You are missing the point - fighting for cases like this, where you are struggling for sympathy even from your fellow contractors - diminishes the efforts of the PCG and others to bring some sense to HMRC so that the MAJORITY - as opposed to a small minority of chancers - can comply with a set of fair rules.
Carry on fighting if you so wish - you are wrong, we are not 'bitter' of your 'success', why shouldn't we?

[neilawuk]

I run a property company and I have paid at least £150k into the system through taxes in the last year....about £75k in stamp duty (dont start me off), the remainder in VAT, my PAYE which runs into the thousands, VAT, corporation tax, council tax, car tax etc etc...

so I think Ive done my bit for the UK and the system seeing as I havent been to the doctors in years, have private health care and pay for dental treatment...

Tell me, all of you who are saying we deserve to be pursued, how much tax have you paid in the last year? I would guess its not as much as me (in most cases)....

[malvolio]

This post is unworthy of your usual quality. Those would have appeared anyway - HMRC think we are disguised employees.

Firstly, you're assuming I was being entirely serious, as opposed to being slightly mischevious

Secondly, the underlying reason for IR35 was entirely valid, to stop the loss of tax income by employees turning into contractors while doing the same job for the same employer - the so-called Friday to Monday brigade

However when HMRC actually looked at why IR35 didn't work, they somehow confused F2Ms with people who had to incorporate becuase of S134c.

Then they looked at some of the moe imaginative schemes being used in the City to protect bonus payment.

Then, becuase they had no idea of how the real world works, they muddled the whole thing into assuming that contractors use tax-efficient companies to save tax, whereas we know that without them we wouldn't get any work, and the tax efficiencies are more than offset by the greater overheads we have to cover that employees don't.

Plus, of course, contractors tend to be more skilled than average employees and command higher rates anyway.

Then they assumed that this whole sub-sector of workers was on the fiddle and are now determined to correct it.

If it wasn't actually true, you might think we were looking at the plot of something by Richard Heller...

[Bradley]

What is tax avoidance?

Quoting Richard Murphy in his pamphlet for the TUC at http://www.tuc.org.uk/touchstone/Mis...gbillions.pdf:

Denis Healey, Labour’s Chancellor of the Exchequer in the 1970s, said: “The difference between tax avoidance and tax evasion is the thickness of a prison wall”. His point was serious. Far from the difference between tax avoidance and tax evasion being easy to spot, he was making the point that it is often very difficult to tell on which side of the fine dividing line between tax evasion and tax avoidance a person is walking when undertaking what they claim is tax avoidance activity. Very often the only way of knowing is by being challenged, with the risk that illegality is proved. This makes clear how morally questionable is the pursuit of tax avoidance.

...tax planning happens when a taxpayer adjusts their real social, economic or organisational affairs to obtain the “best outcome” in response to the tax system. In contrast, tax avoidance happens when a taxpayer uses artificial or contrived methods of adjusting their social, economic or organisational affairs to reduce their tax liability in accordance with the law while not affecting the economic substance of the transactions. This definition makes clear that tax avoidance is artificial. The purpose of tax avoidance is to obtain tax relief no matter what the circumstances of the transaction that gave rise to the tax. Tax planning, on the other hand, is obtaining tax relief for something you would be doing anyway, or which the Government wishes to encourage. This puts tax planning firmly within the domain of tax compliance.

I think that that is a fair assessment of the differences.

MTM/Montpelier etc. are trying to

obtain tax relief no matter what the circumstances of the transaction that gave rise to the tax

that's the problem

[neilawuk]

bradley, sorry thats your opinion, in mine they are providing tax planning utilising existing legislation. each to their own....we are both to be proven