BN66 - Time to fight back!!!

[Shirley]

Bik???

Benefit In Kind.

Many businesses provide non-monetary benefits to employees and directors, either as part of their financial package, or for the employee or director to complete their job. Such benefits are often caught under P11D rules, and are classed as Benefits in Kind.

Benefits in Kind are goods, services or provisions that are subject to tax as if the recipient was earning extra salary. The actual value of the benefit is calculated using Inland Revenue guidelines, and can be quite complex.

Living in a house owned by your co. on which you pay no rent or mortgage payments is definately a BIK, as is use of any other co. assets that you dont pay for.

[DaveB]

Bik???

Benefits In Kind.

Many businesses provide non-monetary benefits to employees and directors, either as part of their financial package, or for the employee or director to complete their job. Such benefits are often caught under P11D rules, and are classed as Benefits in Kind.

Benefits in Kind are goods, services or provisions that are subject to tax as if the recipient was earning extra salary. The actual value of the benefit is calculated using Inland Revenue guidelines, and can be quite complex.

Living in a house owned by your co. on which you pay no rent or mortgage payments is definately a BIK, as is use of any other co. assets that you dont pay for.

[neilawuk]

arrgghhh benefits in kind...stop using acronyms .... I pay all appropriate taxes thanks...

[IR35 Avoider]

Correct me if I'm wrong but new legislation ( the response to S660 ), as opposed to clarification of exisiting legislation ( Finance (No2) Act 1987), cannot be restrospective.

You're wrong.

Okay, that's just my opinion, based on common sense and my understanding of English rather than law. "Clarifying" is just a weasel word which is supposed to mean "changing" and "not changing" simultaneously. The reason they use this weasel word is that they know they are on a thin ice. Montpelier may well defeat them on human rights grounds.

There is no difference in principal between attacking this scheme this way and re-intepreting S660A and IR35 so that all contractors income for say the last 20 years is caught. So IR35 was only introduced 8 years ago? So what. Just pass a law saying it applies from 1970 and tell everyone to cough up. I don't believe they will make retrospective changes to S660a or IR35. They are only using such an extreme measure because this is such an extreme avoidance scheme that they think people will be blinded to the point of principal being breached in shutting it down retrospectively.

[neilawuk]

as per the treasuries own statement retrospection jeopardises the entire fabric of the tax system...If HMRC could apply restrospection where would it end, make 30% basic rate from 2000 onwards and make people pay the difference? OF course you couldnt do that and this is the whole reason why its not allowed full stop or you are then in the realms of having to establish what should and what shouldnt allowed retrospection which opens up yet another can of worms....

[IR35 Avoider]

oh yes and sorry, all my assets (including my home) are entirely owned by my ltd company which of course is a commercial entity and not touchable by HMRC...ohhhhhhh what a shame!!

and just to take the P*ss a little bit more I might actually unemploy myself from my Ltd company and start claiming dole money.....hmmmm I can smell the pleasure now...

I'm confused. Are you saying HMRC will not be able to extract money you owe, because you don't have any? Then presumably you don't own "your" limited company?

[neilawuk]

in the same way that I cant just help myself to money in the companies bank account, I cant just help myself to assets to settle a personal debt...

[oracleslave]

I'm confused. Are you saying HMRC will not be able to extract money you owe, because you don't have any? Then presumably you don't own "your" limited company?

Hence my earlier comment

IANAL but is the term 'piercing the corporate veil' not appropriate in that instance?

[neilawuk]

oracle, a company cannot be held to account for the personal debts of a director full stop. There is no duty of care on behalf of the director...The company is acting in business on its own account, that is fundamental..

[IR35 Avoider]

Don't care. Paying 15% of your income to some dodgy offshore companies was never going to be wise. HMRC aren't going to give you a credit for that agains your tax bill.

Presumably the people who joined the scheme believed they would have been IR35-caught otherwise. For IR35-caught contractors the 10% Montpelier fee roughly equates to what they would have paid in employers NI anyway. Since HMRC cannot come after the contractors for the employers NI, it follows that they are no worse off.