BN66 - Time to fight back!!!

[BrilloPad]

At least you have discussed this with your partner before the big brown envelope arrives. Some people will be completely unaware that tax assessments will be winging our way in a few weeks time.

I can see this creating a lot of tension in many families. I have suggested to MontP that they should write to everyone warning them about the impending assessments, and at the same time also providing more details of their strategy eg. timetable for the JR.

Is there a timetable yet? Maybe they will write when there is a timetable? I would still like, say, montly updates from montp. I dont see it happening though.

[normalbloke]

Warr and Co

As part of my 'explore every avenue, no matter what' philosophy I read the bn66 site by Warr and Co. Has anybody actually contacted this lot and found out what scam they are trying to pull with HMRC? Reading their 'worked examples' it seems as though they are trying to deny one's 'self-employed' status and make out the 'consultant' is actually inside IR35 and therefore the intermediary UK company and/or agency should have deducted PAYE before letting go of the funds? Hence the examples of Joe and Ben, one sole trader and one working via a Ltd co before signing up and the fact large accountants won't help, as they deal with the agency as well? It also appears that as there is no actual contract between the 'consultant' and the UK company, this makes a difference as well as to whether Ben can be chased directly.

This would open a right can of worms if you have to admit you are inside IR35 before you stand any chance of success.... and an invite to Hector to have a closer look at all your other contracts prior and since the schemes.

I'm going nowhere near it after reading that. Of course I am just drawing one conclusion.... it would be good if someone could give us more info, but I'm sure there will be a NDA somewhere at some stage....

[ASB]

As part of my 'explore every avenue, no matter what' philosophy I read the bn66 site by Warr and Co. Has anybody actually contacted this lot and found out what scam they are trying to pull with HMRC? Reading their 'worked examples' it seems as though they are trying to deny one's 'self-employed' status and make out the 'consultant' is actually inside IR35 and therefore the intermediary UK company and/or agency should have deducted PAYE before letting go of the funds? Hence the examples of Joe and Ben, one sole trader and one working via a Ltd co before signing up and the fact large accountants won't help, as they deal with the agency as well? It also appears that as there is no actual contract between the 'consultant' and the UK company, this makes a difference as well as to whether Ben can be chased directly.

This would open a right can of worms if you have to admit you are inside IR35 before you stand any chance of success.... and an invite to Hector to have a closer look at all your other contracts prior and since the schemes.

I'm going nowhere near it after reading that. Of course I am just drawing one conclusion.... it would be good if someone could give us more info, but I'm sure there will be a NDA somewhere at some stage....

That wasn't my reading of it. Self employed and IR35 are mutually exclusive. If self employed and a status enquiry is done then there are only 2 results.

1) You are self employed.
2) You are not. In this case you are an *actual* employee of somebody else. This is where the liability falls.

[BrilloPad]

but I'm sure there will be a NDA somewhere at some stage....

well, technically, speaking to them is breaking the NDA with montp! The trick is not getting caught...

[Lewis]

That wasn't my reading of it. Self employed and IR35 are mutually exclusive. If self employed and a status enquiry is done then there are only 2 results.

1) You are self employed.
2) You are not. In this case you are an *actual* employee of somebody else. This is where the liability falls.

I've just read the examples on the BN66 site out of interest and I think normalBloke is absolutely correct. Reading between the lines it seems pretty clear to me the Warr escape route is to show you are IR35 caught. It says each case must be looked at individually (IR35?!). In their example, Ben who manages to escape BN66 "carried out his work at the offices of Barwest Bank and that Barwest Bank had exercised a certain amount of supervision and control over the work he did" (sounds like IR35 to me). The next crucial point seems to be that having been found IR35 caught it is not you that needs to pay up but the "scheme provider". Well I have heard anedotal evidence this is true. Other threads have discussed at length Managed Service Company contractors escaping IR35 bills because the tax and NI demand couldn't be passed from the MSC to the contractor. A recent thread discussed passing on IR35 bills to contractors and why it can be difficult for HMRC to do so ... see #118 here http://forums.contractoruk.com/accou...l-case-12.html)

So my guess is that yes as normalBloke says Warr will try to show you IR35 caught. Who'd have ever thought someone would want to be caught .
I'm glad I'm not in your boat guys, tough decisions to make. My question to Warr would be "why must I act now?". Presumably you could argue you are IR35 caught at any time in the future why does it say "If you want to use this alternative approach it is essential to act quickly. The window of opportunity currently open will probably close shortly after Royal Assent."?

Lastly, it seems clear from the BN66 site, they are claiming some people have already escaped BN66 and any tax bill (by being shown caught by IR35?) ... so who are these people? If you can find one by asking around maybe you have the proof you need that this really is a BN66 escape route.

I didn't understand the "Fred had an “off the record” chat with Giles and the penny dropped." bit or why Giles had a conflict of interest. I can only assume it is inferring something like Montpellier & Co are paly-paly with the big accountancy firms and so they won't give you advice that would hurt these scheme providers (but help you).

This is all my guessing!

[TheGadgetMan]

I actually had a 45 minute chat with Mr Warr a couple of weeks ago (just exercising my 'explore every avenue' philosophy...don't worry, I'm not going there!)...and my understanding was exactly the same as NormalBloke...

...it being that you claim IR35-caught...TW explained that according to the IR's own guidance notes they are then obliged to go after the agent that paid you...TW said that IR aren't always aware of the details of their own guidance notes and if you agreed to go with him, part of his defence on your behalf would be to point them to their own guidance notes...they would then have to follow them...

IR would then be OBLIGED to attack MTM and/or also the agency for the tax...he said that a lot of the big agencies are already actually aware that this possibility exists and they are quietly $h!tt!ng themselves hoping that none of the contractors realise this...never in a million years did the agencies realise that by accepting the MontP contracts years ago, would it rebound on them in such a way...

...anyway it gets better...TW went on to explain that IRs attack on MontP and the agencies would be a very formal procedure and involves invoking certain articles...and once they do this, according to its own rules and procedures they are not allowed to come back and attack the individual (you and me) if they fail in their attempt against MontP and the agencies to get the tax...

TWs argument was that if you were in Hectors shoes and you wanted the money, where would you go? where would you most likely have any chance of success?...would you go after 3000 individual contractors?...or would you go after MontP and 6 of the largest agencies?...in his view it was obvious...MontP and the agencies, of course...they have a greater ability to pay and the admin for Hector would be less...

it all sounded like a reasonable argument...but it all sounded far too risky..you would end up alienating MontP (not forgetting getting sued by them as well)...and if it did all go t!t$-up then where would you go? you really would then be up the proverbial creek...

anyway, I hope the above makes sense...I know its a bit of a ramble...but I type like I think! my thought process is a bit of a spiders web...

[smalldog]

I've just read the examples on the BN66 site out of interest and I think normalBloke is absolutely correct. Reading between the lines it seems pretty clear to me the Warr escape route is to show you are IR35 caught. It says each case must be looked at individually (IR35?!). In their example, Ben who manages to escape BN66 "carried out his work at the offices of Barwest Bank and that Barwest Bank had exercised a certain amount of supervision and control over the work he did" (sounds like IR35 to me). The next crucial point seems to be that having been found IR35 caught it is not you that needs to pay up but the "scheme provider". Well I have heard anedotal evidence this is true. Other threads have discussed at length Managed Service Company contractors escaping IR35 bills because the tax and NI demand couldn't be passed from the MSC to the contractor. A recent thread discussed passing on IR35 bills to contractors and why it can be difficult for HMRC to do so ... see #118 here http://forums.contractoruk.com/accou...l-case-12.html)

So my guess is that yes as normalBloke says Warr will try to show you IR35 caught. Who'd have ever thought someone would want to be caught .
I'm glad I'm not in your boat guys, tough decisions to make. My question to Warr would be "why must I act now?". Presumably you could argue you are IR35 caught at any time in the future why does it say "If you want to use this alternative approach it is essential to act quickly. The window of opportunity currently open will probably close shortly after Royal Assent."?

Lastly, it seems clear from the BN66 site, they are claiming some people have already escaped BN66 and any tax bill (by being shown caught by IR35?) ... so who are these people? If you can find one by asking around maybe you have the proof you need that this really is a BN66 escape route.

I didn't understand the "Fred had an “off the record” chat with Giles and the penny dropped." bit or why Giles had a conflict of interest. I can only assume it is inferring something like Montpellier & Co are paly-paly with the big accountancy firms and so they won't give you advice that would hurt these scheme providers (but help you).

This is all my guessing!

Ive spoken to them....to clear up a couple of points...

1 - you arent breaching an NDA with Montp. You dont have to say a word, they know all about the mechanics of the scheme. You just have to say you are in it...

2 - Its correct that its based on you as being employed rather than self employed. On the basis that you are employed, interestinlgy I for one never signed any contract with the end client, it was all handled by MontP. That suggests not being self employed. Not going to argue this one yet, its all up for debate

3 - Warr and co arent going to do anything for the time being until they have completed their research and have some idea of how successful this approach may or may not be. THEY HAVENT GOT ANYONE OFF ANYTHING YET!

4 - they will work on a commission basis, no win no fee apart from a small up front payment. So doesnt look like a big money making scam on first appearance

5 - In their opinion, its not possible to allow Montp to go thru all their arguments with HMRC and then if they fail to utilise Warr and co's arguments. That would be deemed to be a "try to squirm" in lots of different ways and wouldnt win favour. There is one opportunity to hit HMRC quickly and in the right way, they might bite they might not....they might decide we are softer targets, or they may deem us bad debt risks where agencies might be more able to stump up the cash. At the end of the day its a numbers game, HMRC want their money not souls

6 - Just to be clear how it hangs together....IN the same way an Umbrella company is legally bound to deduct PAYE from you before it hands over the money, Warr and co are arguing that Montp are too. Their UK based agency who paid all the monies is effectively an umbrella company.

but using HMRC's own policies against Montp to deem employment is in my view genius! do your own research and draw your own conclusions....in my view for a small fee its worth a punt (at the moment), anything to get me off this damned rollercoaster to hell!

[normalbloke]

That wasn't my reading of it. Self employed and IR35 are mutually exclusive. If self employed and a status enquiry is done then there are only 2 results.

1) You are self employed.
2) You are not. In this case you are an *actual* employee of somebody else. This is where the liability falls.

Exactly what I am saying - apologies if I didn't make it clear. 'Joe' is a sole-trader outside of IR35 and get stitched for the full tax whilst 'Ben' is inside IR35 and an employee of somebody else... and that somebody else is liable for the tax on Ben's income....

But I'm not sure who the 'somebody else' is. 'Ben' is legally contracted to the Partnership to provide services... 'Easypay Ltd' does not employ Ben.. I assume Warr and Co are arguing that it does....

Anyway, don't go there!

[Lewis]

TWs argument was that if you were in Hectors shoes and you wanted the money, where would you go? where would you most likely have any chance of success?...would you go after 3000 individual contractors?...or would you go after MontP and 6 of the largest agencies?...in his view it was obvious...MontP and the agencies, of course...they have a greater ability to pay and the admin for Hector would be less...

it all sounded like a reasonable argument...but it all sounded far too risky..you would end up alienating MontP (not forgetting getting sued by them as well)...and if it did all go t!t$-up then where would you go? you really would then be up the proverbial creek...

What would MontP sue you for? If you are IR35 caught, you are IR35 caught, nothing you can do about that surely?!

Not sure I follow all the thinking above ... how can HMRC go after MontP plus agencies in one big IR35 catch all case anyway. Each contract must be assessed invdividually. Althought I guess if no contractor disputes being caught that could be quite a quick process.

[zippo]

All in the same boat...????

Ive spoken to them....to clear up a couple of points...

1 - you arent breaching an NDA with Montp. You dont have to say a word, they know all about the mechanics of the scheme. You just have to say you are in it...

2 - Its correct that its based on you as being employed rather than self employed. On the basis that you are employed, interestinlgy I for one never signed any contract with the end client, it was all handled by MontP. That suggests not being self employed. Not going to argue this one yet, its all up for debate

3 - Warr and co arent going to do anything for the time being until they have completed their research and have some idea of how successful this approach may or may not be. THEY HAVENT GOT ANYONE OFF ANYTHING YET!

4 - they will work on a commission basis, no win no fee apart from a small up front payment. So doesnt look like a big money making scam on first appearance

5 - In their opinion, its not possible to allow Montp to go thru all their arguments with HMRC and then if they fail to utilise Warr and co's arguments. That would be deemed to be a "try to squirm" in lots of different ways and wouldnt win favour. There is one opportunity to hit HMRC quickly and in the right way, they might bite they might not....they might decide we are softer targets, or they may deem us bad debt risks where agencies might be more able to stump up the cash. At the end of the day its a numbers game, HMRC want their money not souls

6 - Just to be clear how it hangs together....IN the same way an Umbrella company is legally bound to deduct PAYE from you before it hands over the money, Warr and co are arguing that Montp are too. Their UK based agency who paid all the monies is effectively an umbrella company.

but using HMRC's own policies against Montp to deem employment is in my view genius! do your own research and draw your own conclusions....in my view for a small fee its worth a punt (at the moment), anything to get me off this damned rollercoaster to hell!

If someone actualy went through this route successfully, wouldnt the same rules applie to everyone as a blanket case ?