BN66 - Time to fight back!!!

[DonkeyRhubarb]

The discount will probably be minimal, a few percentage points off the total bill HMRC want you to pay. They give this in return for the admin costs saved by not having to deal with contractors individually.

If that was all that was on offer, then I can't see there would be any incentive to take it.

[DonkeyRhubarb]

Do you guy's know the actual date the final decision will be made for the retrospective portion of the law.

The Finance Bill will get royal ascent around mid-July but we'll know the outcome by the end of the Committee stage.

My best estimate is end of June.

[IR35 Avoider]

If that was all that was on offer, then I can't see there would be any incentive to take it.

Yes, you would only take the deal if you were certain that you were going to lose the argument anyway. Ultimately who prevails is not going to be resolved on a case be case basis, it will be decided in parliament or in court. Once it's resolved, if it goes against you, an arrangement like this will become a sensible option. Note that the people who are offering it now are doing so because of legal opinion from 2002 that the scheme doesn't work. (Montpelier don't agree with this.) So the current customer base for this arrangement is people who accept that the scheme already doesn't work, even without retrospective legislation.

I've swung from 67% confidence it doesn't work, to 67% confidence that (in the absence of retrospective legislation) it does. I think the retrospective legislation is an admission by the government that they aren't confident of winning in court.

As things stand, you are scheduled to lose. To win you either need the government to change its mind before the legislation goes through, or you need Montpelier to invalidate the law through the courts on human rights grounds. I do actually think the government are on dodgy ground with this, even though relying on human rights legislation is usually a fairly desparate last resort.

(I am not a lawyer. My opinions are worth what you paid for them.)

[malvolio]

Two slight problems:

It is not retrospective legisaltion (that doesn't work anyway), it is clarification of the intended application of the statute in place, and

It was shown in the original IR35 challenge that Human Rights legislation doesn't apply to what is essentially corporate law.


By all means keep fighting, but a healthy dose of realism wouldn't go amiss...

[IR35 Avoider]

It is not retrospective legisaltion (that doesn't work anyway), it is clarification of the intended application of the statute in place, and

If it's not retrospective legislation, it will have no effect on the tax bill of any contractor for years end April 2008 or earlier, and the wording in the legislation that says it does affect those years is a waste of space.

Alternatively, it is retrospective legislation.

If you don't think "clarification of the intended application of the statute in place" is the same thing as "retrospective legislation" please explain why.

As far as I'm concerned it's very simple. Are there words in a bill being passed in 2009 which will affect how much tax someone pays for a period before the contents of that bill were announced? If the answer is yes, then the bill contains retrospective tax legislation.

It was shown in the original IR35 challenge that Human Rights legislation doesn't apply to what is essentially corporate law.

There are no corporations involved in this scheme, in any way that's relevant with regard to the core feature.

[malvolio]

Don't have a go at me, I'm on the side of anyone who is being challenged by Gordon's Morons, even if I don't agree with them (which I don't, incidentally - a few less "clever" tax avoidance schemes and we probably wouldn't have HMRC all over our business dealings every time we turn around)

HMG will continue to say that people have wilfully misinterpreted the rules and as a result have not been paying the correct amount of tax for some period of time. They can go back 6 years anyway, and if they decide the mis-interpretation was fraudulent behaviour they can go back at least 20. The fact they haven't bothered before is not really much of a defence; they will simply argue they had bigger problems to solve and have only got round to this one when the level of "underpayment" became significant.

I hope you win, just to put one over on Hector, but you will have to come up with a damn sight stronger argument than I've seen so far.

[BrilloPad]

Two slight problems:

It is not retrospective legisaltion (that doesn't work anyway), it is clarification of the intended application of the statute in place, and

It was shown in the original IR35 challenge that Human Rights legislation doesn't apply to what is essentially corporate law.


By all means keep fighting, but a healthy dose of realism wouldn't go amiss...

If that is not retrospectve legislation I dont know what is. MTM want the cases to get to court - why are HMRC dragging their heels. They know they will probably lose.

healthy dose of realism - have you been talking to BB or Turion?

[BrilloPad]

Yes, you would only take the deal if you were certain that you were going to lose the argument anyway. Ultimately who prevails is not going to be resolved on a case be case basis, it will be decided in parliament or in court. Once it's resolved, if it goes against you, an arrangement like this will become a sensible option. Note that the people who are offering it now are doing so because of legal opinion from 2002 that the scheme doesn't work. (Montpelier don't agree with this.) So the current customer base for this arrangement is people who accept that the scheme already doesn't work, even without retrospective legislation.

I've swung from 67% confidence it doesn't work, to 67% confidence that (in the absence of retrospective legislation) it does. I think the retrospective legislation is an admission by the government that they aren't confident of winning in court.

As things stand, you are scheduled to lose. To win you either need the government to change its mind before the legislation goes through, or you need Montpelier to invalidate the law through the courts on human rights grounds. I do actually think the government are on dodgy ground with this, even though relying on human rights legislation is usually a fairly desparate last resort.

(I am not a lawyer. My opinions are worth what you paid for them.)

The people offering this now are rumour stirring and trying to profit from it. Who can blame them if people are stupid enough to fall for it?

[poppy01]

Their isnt actually anything on offer as far as responses I have received, latest is that the deal would involve an attack on the scheme provider to get back the lions share of the liability, and may work only if you will be bankrupted by the debt. Personally I have decided to wait and see what happens in the committee stage, if it gets passed I'll go straight to hector and try to negotiate payment terms... unless montpelier argue strongly that they have a chance of defeating it in ECHR, but as I havent heard a dicky bird from them in 3 weeks I'm not hopeful. In the meantime, I am starting an aggressive savings plan and buying CTD's... hows that for a dose of realism...

[cailin maith]

Don't have a go at me, I'm on the side of anyone who is being challenged by Gordon's Morons, even if I don't agree with them (which I don't, incidentally - a few less "clever" tax avoidance schemes and we probably wouldn't have HMRC all over our business dealings every time we turn around)

HMG will continue to say that people have wilfully misinterpreted the rules and as a result have not been paying the correct amount of tax for some period of time. They can go back 6 years anyway, and if they decide the mis-interpretation was fraudulent behaviour they can go back at least 20. The fact they haven't bothered before is not really much of a defence; they will simply argue they had bigger problems to solve and have only got round to this one when the level of "underpayment" became significant.

I hope you win, just to put one over on Hector, but you will have to come up with a damn sight stronger argument than I've seen so far.

But unless you are Montpelier how do you know what argument they have