BN66 - charges and interest

[BrilloPad]

It also reinforces their whole idea that we are only in the game to cheat them out of tax income.

Maybe you mix in better circles than me but...

Although I wouldn't use the word "cheat", I have not met a single contractor over the past 10 years who is not out to pay as little tax as they can get away with. Everyone I have ever met is only in this game for one thing - money. A lot of people I know have steered clear of the Offshore Schemes, not because they think (or care) that they are wrong on moral grounds, but because they consider them too risky.

Maybe you are right that these schemes have drawn unwanted attention on the rest of the contractor community. However, it's equally possible that they have given the government an easier target and distracted them from revisiting IR35, S660.

I'm sure they are fully aware of how many billions they are still "losing" post-IR35, and it's only a matter of time before they take another swipe. But hopefully (and this is where I'm sure we will both agree) they will be kicked out of office before they get the chance.

WHS

Following a load of grief from Bradley(who eventually cleared off to troll elsewhere) I started this thread.

http://forums.contractoruk.com/gener...ighlight=moral

I think we can all guess the result....

[Likely]

mal, of course I have filled in the tax returns!! All income I received from the scheme or otherwise has always been listed in my SA forms under income from foreign trusts. HMRC have suggested they think it should be in a different section, i.e. under general taxable income....They have never insisted it is wrong.....and this is my point. IT HAS ALWAYS BEEN DECLARED, not declaring it would and quite rightly have been tax evasion which is a criminal offense!

Your comment just goes to show your ignorance of how this whole thing works which makes me even mader that you seem to deem yourself such an authority, why dont u get some facts first before trying to argue a point which just so happens to always be biased in one direction, the side of HMRC...DOH!

Smalldog. If you have listed trust income , you must have been taxed on it.

UK residents , which prisumambly you are , pay tax on trusts income no matter where the income is.I don't see why you would not have a bill for the trust income.

AFAIK.

[NotAllThere]

It does interest me, becuase it is the kind of thing that has got HMRC so interested in us contractors in the fiorst place

No. HMRC got interested because we seemed to be working just like permies and paying less tax. They got a new government in, who were much more attracted to the politics of greed, plus an MP with a vested interests in a larger IT consultancy.

I do care that you believe you can earn UK money in the UK and not pay tax on it, ...

I don't care that they believe that - but I'm amazed they believed it to be true.

And frankly your continuing protestations of hard or unfair treatment by HMRC are of no concern to me at all: I just happen to think you're in the wrong and you're deluding yourself if you think 90% of UK's contractors have any sympathy with your problems.

I've sympathy because of the making it retrospective. I've no sympathy with anyone whinging because the loophole was closed - but I don't detect that here. But I still think they're doomed. Not because of their case - but because of the government.

[BrilloPad]

I've no sympathy with anyone whinging because the loophole was closed - but I don't detect that here.

I am just amazed it was not closed earlier.

We are not rich enough to whine - unlike the non-dom tax thing where billionaires whined over 30k per year. Abba were right - its a rich mans world.

[smalldog]

Smalldog. If you have listed trust income , you must have been taxed on it.

UK residents , which prisumambly you are , pay tax on trusts income no matter where the income is.I don't see why you would not have a bill for the trust income.

AFAIK.

Well Im telling u its been listed as income from foreign trust every year on my SA and Ive never had a tax bill and its the same for everyone else who used the scheme.....

Pretty much the minute Hector decided he didnt like it by writing to me informing they were challenging it I left the scheme as it gave me some obvious concern, that was 2 years ago. I can argue that prior HMRC informing me that it was to challenge the scheme I felt I was operating inside legislation, which in my opinion I was. For me to potentially be held to account for something I havent used for 2 years which I disclosed every year and to then be charged interest is a bit rich...Its not just cos it affects me, I would feel that way if it was anyone else too...

[IR35 Avoider]

I havent had a tax bill, so on what basis should I pay interest?

It's called self-assessment because it's your job to decide how much tax you should pay, and to pay the right amount. By declaring your income from the trust in the way you have, you have told HMRC that no tax is due.

They meekly "suggest" you put it in a different section (where the calculation procedure will cause it to be taxed) because they are predicting that once any investigations, commisioner hearings etc. etc. are done and dusted, the income will be found to be taxable.

To repeat, when they send you a statement of account, the reason tax on the trust income doesn't appear on it is because you've told them it shouldn't, and (initially at least) it's your job, not theirs, to make that call.

It is in their power to reinterpret your tax return and demand the tax they think is due, as it appears they have done for some contractors. When they do that then the onus shifts to you to use the appeals process to prove them wrong. However there is no obligation on them to do this within any particular timeframe. The responsibility for getting your tax bill right resides with you until they decide to override you.

(I hope I don't sound tetchy, I'm not. As you will know from my posts in various threads I'm generally sympathetic to people in these schemes and disagree with retrospective legislation. I'm just trying to make a point about why you shouldn't complain about the interest.)

[smalldog]

avoider, I dont disagree with your points however my main issue with the HMRC is why didnt they override my decision to put it in that section sooner rather than later if their intention was always to eventually say it was taxable....they are the experts not me, so its not the responsibility of the general public to always get it right. They are after all the tax authority and so are auditers of SA's and should steer the tax payer in rules and guidance. For them not to have done in this case is surely a failing on their part? To give another example, my wife has had her return scrutinised and has taken HMRC guidance on alterations to her SA to make it right and proper, why didnt they offer me that courtesy upon submission of my first SA including the scheme income, rather than wait until I had filed 4 SA's with the scheme inclusions?

[DonkeyRhubarb]

avoider, I dont disagree with your points however my main issue with the HMRC is why didnt they override my decision to put it in that section sooner rather than later if their intention was always to eventually say it was taxable....they are the experts not me, so its not the responsibility of the general public to always get it right. They are after all the tax authority and so are auditers of SA's and should steer the tax payer in rules and guidance. For them not to have done in this case is surely a failing on their part? To give another example, my wife has had her return scrutinised and has taken HMRC guidance on alterations to her SA to make it right and proper, why didnt they offer me that courtesy upon submission of my first SA including the scheme income, rather than wait until I had filed 4 SA's with the scheme inclusions?

This is a minor point but just to be clear, the income is in the right place on the form. It is in the box for income from foreign trusts, and nothing in the legislation changes this. What does change is how much tax is due on it. Currently on our SA forms we have (by specific reference to the terms of the IoM DTA) calculated the tax as zero. This is clearly noted on the form and it is this which HMRC are contesting.

[smalldog]

donkey, I think the trouble is a lot of people think we have been concealing and hiding in the shadows but we havent, hence the anger towards such schemes. In some respects we have been a damn sight more upfront than some IR35 avoidance tactics. Just so happens time delays have created this mess.

[DonkeyRhubarb]

donkey, I think the trouble is a lot of people think we have been concealing and hiding in the shadows but we havent, hence the anger towards such schemes. In some respects we have been a damn sight more upfront than some IR35 avoidance tactics. Just so happens time delays have created this mess.

Stands to reason if you think about it, otherwise how would HMRC have picked it immediately ie. it was on the form clear for all to see.

I know some people in schemes involving foreign currency loans where nothing was declared on the tax return. HMRC have only become aware of these recently since the disclosure rules were introduced.