BN66 - Time to fight back: Continued

[ASB]

As far as I remember, I was told that HMRC approved the use of the scheme and even provided a reference number confirming its use and legality.

I think you somewhat misunderstand (or were missold) the use of scheme reference numbers. This only means that the scheme is disclosed to HMRC nothing more or less.

http://www.icaew.com/index.cfm/route...closure_regime

http://www.hmrc.gov.uk/budget2008/bn67.pdf

Of course this also happens to means that HMRC have a ready made list of schemes to look at and decide whether to challenge or propose legilation against. Also a nice handy list of everybody to potentially investigate as and whey the "close them down" should they do so.

[kiwinlondon]

Hi TAF4,

Actually we all use HMRC as the culprits when the real issue is the government (HMRC are merely their enforcers). I don't actually believe that this measure is about tax avoidance particularly but just another attack on contracting as a way of working. I heard a rumour that although BN66 originally went back to 1987 the current investiagtion is only going back to 2002 i.e. solely aimed at us, so those of you hoping MP get some support from other parties are probably (hopefully not) are out of luck.

Totally agree its the govt trying to extract as much money out of people any way possible to try and balance the books after all their spending!!

What i got told was that all the different parties will submit their JRs and if the courts think they are for the same thing they will probably pick one to go with....

[Douglas]

Quite... I think this was said to me by someone at an intermediary company that I dealt with. (I didn't deal directly with MP).

The scheme was registered with HMRC and received a registration number when registration of avoidance schemes became compulsory. This was certainly not approval and I have seen nothing from MP suggesting it was.

If we lose and you are facing a giant bill, I think you should go and see a solicitor with a view to suing the intermediary who told you this.

[SantaClaus]

Brillo Pad (or anybody else who has opinions??), interested to hear what you are planing to do now re. Ltd Co - insurance, etc. I may be in a similar position - still on the MP scheme and thinking about going Limited when my contract is renewed at the end of this month. Something's been holding me back though... I'm just not certain what the best thing to do is:
OPTIONS
1. Stay on current MP scheme - able to find more cash to [ potentially (still think it's unlikely) ] pay HMRC - save as much as I can as well in case this scheme goes the same way. After the JR ruling will have a much clearer idea of what will happen next (only a few months away probably)
2. Ltd - less cash also risky (less than 1) in terms of IR35 and expensive in terms of admin, hassle and prof fees. Also if the current MP scheme goes wonky - only 6 months exposure over the year

What do you think - what are the main arguments for going Limited??

SantaClaus - you know about evaluating risk in your new profession - what's your opinion?

If it was me personally, I would go the Ltd route with IR35 insurance to spread my risk.

[MuddyFunster]

This was certainly not approval and I have seen nothing from MP suggesting it was.

I came to the conclusion that they fed me a load of bulltulip quite some time ago...

[smalldog]

I came to the conclusion that they fed me a load of bulltulip quite some time ago...

Well I for one will be inclined to look at legal recourse against Montp if they lose. They sold me the idea in the first place, they cant now say well it was at your own risk when they were throwing around bits of paper to prove it was totally safe to get you to sign up..

[MuddyFunster]

Well I for one will be inclined to look at legal recourse against Montp if they lose. They sold me the idea in the first place, they cant now say well it was at your own risk when they were throwing around bits of paper to prove it was totally safe to get you to sign up..

Yes, I agree. When I got in the scheme in April 2002 there was never any mention that the scheme might not work or there was any risk with it. I was told it would probably last 12 months before HMRC closed it down and that would be that.

[BrilloPad]

Brillo Pad (or anybody else who has opinions??), interested to hear what you are planing to do now re. Ltd Co - insurance, etc. I may be in a similar position - still on the MP scheme and thinking about going Limited when my contract is renewed at the end of this month. Something's been holding me back though... I'm just not certain what the best thing to do is:
OPTIONS
1. Stay on current MP scheme - able to find more cash to [ potentially (still think it's unlikely) ] pay HMRC - save as much as I can as well in case this scheme goes the same way. After the JR ruling will have a much clearer idea of what will happen next (only a few months away probably)
2. Ltd - less cash also risky (less than 1) in terms of IR35 and expensive in terms of admin, hassle and prof fees. Also if the current MP scheme goes wonky - only 6 months exposure over the year

What do you think - what are the main arguments for going Limited??

SantaClaus - you know about evaluating risk in your new profession - what's your opinion?

Personally I am going limited - I have no setup company and got PI and joined PCG. Will do bank account tomorrow.

This is for 3 reasons :-
1. I have 2.5 years of possible liability. That is as much risk as I want.
2. my assessment of risk has changed. I used to be on the edge - a bit of risk did not worry me. These days I am more a family, cardigan and pipe chap. Why add stress when I dont need the money?
3. I dont like the new scheme. I liked the old one. I have read some other threads on loan scemes and I rate chances of success as 50%. I reckon soon HMRC will launch a major assault on all these schemes.

But thats all a personal view. We are all different and best of luck to these still with montp who are carrying on.

Ratican - what are your thoughts. PM me if you dont want them on public forum.

BP

[Emigre]

You might find the following very recent judgement interesting reading, in this case the loans from a family trust setup by the employer worked but payments into the trust were not deductable for corporation tax purposes so ultimately it didn't really work but it highlights the issues you need to consider yourself.

http://clients.squareeye.com/uploads...pra-080708.pdf

Thanks Lewis. This is a long hard read but well worth it. It says a lot about loan schemes, not to mention the obvious demise of EBT. One of the attendees was interesting - Ed Gittins of MP...

Bottom line here though is that the ability to apply retrospective legislation can change anything, this too. And it doesn't necessarily stop there. What stops them from changing tax rates retrospectively for particular categories of person? The point is the evil of retrospective legislation. The Govt gets away with what may be a fringe area this year, next year it becomes a mainstream attack with a precedent to support them.

This invasion of human rights and the uncertainty created needs to be halted here and now before all of corporate UK becomes corporate Irish and before all of the contractors (hi everyone ) take a permanent hike to the sun.

[Hawkwind]

Personally I am going limited - I have no setup company and got PI and joined PCG. Will do bank account tomorrow.
BP

It is also becoming increasingly difficult to find agencies that will deal with MP so the choice might be removed anyway. I've kept my old company going just in case but after the Dragonfly ruling escaping IR35 and the revised S6660 when it comes in just doesn't look possible.

I don't know about anyone else but I just can't bear the thought of handing over 50% of my income to this incompetant Government, so as long I can satisy myself that any new schemes won't be classed as evasion I think I'll stick it out.