BN66 - Time to fight back: Continued

[DonkeyRhubarb]

Oh they've been around quite a while (don't know about MP of course). Certainly back in 1983 there were a number of offshore based schemes targeting "service type" individuals. It is certainly possible that by '87 they were already exploiting DTA type schemes.

however at that time take up was no doubt very small. There were only estimated to be something in the order of 10,000 "service companies" anyway in '83.

I wasn't aware of that but I think you will agree that these schemes only took off after IR35. MP had been using the DTA loophole for quite a long time but not with freelancers. I remember talking to them about this when I joined, and they reckoned there wouldn't have been a market for the scheme prior to IR35 because it didn't pay enough of a premium over Ltd to compensate for the risk.

[Oakleyacc]

Hello

I have been reading the posts in this forum and the previous one for some time in order to keep up to date with events. I have found a lot of them very interesting and useful. I was with MP from 2003 to 2006.

For my part, I knew what I was doing when I entered the scheme and understood that there was a risk that it might not work out in the future. The presentation I was given included a scenario where it didn't work and we'd have to pay more tax. I was assured that the most highly qualified legal counsel had gone through the details of the scheme and it held up under the current legislation. Fine, I went ahead.

By 2006 I saw that the Special Investigations Unit had been set up and also by then the Inland Revenue had merged with Customs and Excise and they were going all out against the scheme. So I left it. I felt that staying in would be like waving a red flag at a bull.

I accept the change in legislation to "close the loophole" if that's the correct expression to prevent contractors from taking advantage of the double taxation agreement with the Isle of Man.

However, I disagree with it being retrospective. If HMRC were unable to win any test cases earlier, it is because the law would not allow them to win. To say now that the law was always meant to be that way and so the Finance Bill 2008 has retrospective action is not acceptable.

We will see what happens next. I have no idea what the outcome will be nor the details of how we will get there nor how long it will take. There is talk of a Judicial Review but I agree that there are probably very few people qualified to comment on how this really works. I will continue to watch and wait and of course when the time comes I will appeal.

It may upset some contributors to this forum when I say this, but I feel no moral obligation to pay any additional tax for previous years. This is regardless of the legal outcome. There was a window of opportunity for a while because of the way the law was and I took it. It doesn't exist now; that's fine. Retrospective action no.

For various reasons, I have no assets nor savings and have even been advised by an Insolvency Practitioner that bankrupcy would be the cheapest option for me. However I am not keen on the stigma and the possible problems it may cause in the future. If we come down to the wire and all possible avenues are closed, then I will try and negotiate an IVA or an arrangement directly with HMRC. If HMRC don't want to negotiate and wish to make "an example" of me along with others, then it is bankrupcy and they really do get nothing. I have no idea what their reaction will be so I will not pre-judge them.

HMRC must carry out what they believe to be correct under the law as they see it. They would be negligent if they didn't. But they have been using some scare tactics in the letters they have sent out and this is not acceptable. As a result they have set themselves up as a target for abuse. If they act completely correctly within the law, there can be no complaints about their behaviour.

So I will continue to monitor and wait to see what happens next.
Let's hope for the best.

[BolshieBastard]

Oh they've been around quite a while (don't know about MP of course). Certainly back in 1983 there were a number of offshore based schemes targeting "service type" individuals. It is certainly possible that by '87 they were already exploiting DTA type schemes.

however at that time take up was no doubt very small. There were only estimated to be something in the order of 10,000 "service companies" anyway in '83.

Ah. You mean 'the Sark Lark' type thing.

[SantaClaus]

Interesting, reading the old "moral" tax argument again, however it really is a sore point with me.

The reason I went with Montpelier was:

1. I wanted to stick two fingers up at the govt. after IR35.
2. I could see how the govt. were p#ss#ng our money down the drain and I didnt want to be a contributer.
3. I didnt think the govt. should get any of my money because of the way they were collaborating with the big consultancies to destroy our industry. I still remember when Dawn Primarolo went to meet business leaders in India. Now what was that all about?

The actual tax savings I gained from the scheme came 4th on my list.

By the way, my wife works for the public sector and she tells me every day how our money is being poured down the drain. The consultancy that has been losing data left, right and centre (you know the one!) employs many "business consultants" at her workplace who are billed at £2000+ a day. The govt. throws money at these consultants and managers to make "improvements" to working practices. Apparently one of the suggestions they came up with was to hold more meetings
And all the IT work is farmed out to India or Poland. Maybe thats why the last IT system had to be scrapped when they found the only way of extracting data was to print it out

Oh yes, and Whitehall recently placed a "troubleshooting" type person in her organisation on a salary of £350,000. He is now busy sacking staff who are on £15k salaries. I guess probably to pay for his own salary

Oh yes, and some government departments have bought thousands of plasma screens so they can be installed in every room. In one organisation they even employed screens in the lavs so men could watch adverts about prostate cancer while they were doing their business Shame they couldnt use the money to pay for more doctors

This is just the tip of the iceberg when it comes to wasting taxpayers money. Now tell me why I should feel guilty and pay more tax

[TykeMerc]

Most of us aren't happy (let's face it none of us are) about paying tax that we perceive as being wasted and representing poor value, to me that's not a moral issue. Morally we should contribute to the fabric and infrastructure of the country, but HMG should use the money wisely not wastefully.

I was never a MontP customer although I very nearly was, I changed my mind at the last minute, but as Oakleyacc said the scheme used to be legal and the idea that HMRC can take retrospective action is morally corrupt.

I hope the courts take a long hard look at this action, the more I think about it the worse it smells to me as it appears to spit in the face of natural justice.

[mossman]

Look, I have absolutely no problem with the schemes provided by Montpellier or any other provider, as long as they comply with the letter of the law. It is all of our rights to minimise the tax we pay under the law. But, c’mon. Admit it. The reason you are / were on this scheme is to take home more money. There is nothing wrong with that. I do all I can to maximise my take-home pay too. If I were in a position to use one of the loan based schemes, I’d do so in a second. There is nothing wrong with that.

But to try to cloak this fact with some argument that it is a protest against an unjust tax system or irresponsible government spending is a joke. People are driven to reduce their tax liabilities through greed. Nothing else.

And again – nothing wrong with that!

Greed is trying to get something for nothing.

When a man works hard to support his family, that's not greed, it's one of the noblest things a man can do.

When a government steals that man's hard-earned money to give away to scroungers, that's greed.

As Watkin Gittins, head of MontP explained at the presentation I attended in 2001, no-one minds paying 10% tax, even 20% most people will live with, but when a government starts taking half of a person's hard-earned money, they are going to look for ways to avoid having their money stolen.

He explained that IR35 had created a business opportunity for him as a tax avoidance specialist. Simple as that.

[DonkeyRhubarb]

Greed is trying to get something for nothing.

When a man works hard to support his family, that's not greed, it's one of the noblest things a man can do.

When a government steals that man's hard-earned money to give away to scroungers, that's greed.

As Watkin Gittins, head of MontP explained at the presentation I attended in 2001, no-one minds paying 10% tax, even 20% most people will live with, but when a government starts taking half of a person's hard-earned money, they are going to look for ways to avoid having their money stolen.

He explained that IR35 had created a business opportunity for him as a tax avoidance specialist. Simple as that.

Here f*ing here!!!

[ChimpMaster]

Greed is trying to get something for nothing.

When a man works hard to support his family, that's not greed, it's one of the noblest things a man can do.

When a government steals that man's hard-earned money to give away to scroungers, that's greed.

As Watkin Gittins, head of MontP explained at the presentation I attended in 2001, no-one minds paying 10% tax, even 20% most people will live with, but when a government starts taking half of a person's hard-earned money, they are going to look for ways to avoid having their money stolen.

He explained that IR35 had created a business opportunity for him as a tax avoidance specialist. Simple as that.

A very good post - well put.

So true that if the government took, say just 25% or 30% tax and used it wisely, the working population would be far happier and productive.

[BrilloPad]

I have been reading the posts in this forum and the previous one for some time in order to keep up to date with events. I have found a lot of them very interesting and useful. I was with MP from 2003 to 2006.

For my part, I knew what I was doing when I entered the scheme and understood that there was a risk that it might not work out in the future. The presentation I was given included a scenario where it didn't work and we'd have to pay more tax. I was assured that the most highly qualified legal counsel had gone through the details of the scheme and it held up under the current legislation. Fine, I went ahead.

By 2006 I saw that the Special Investigations Unit had been set up and also by then the Inland Revenue had merged with Customs and Excise and they were going all out against the scheme. So I left it. I felt that staying in would be like waving a red flag at a bull.

I accept the change in legislation to "close the loophole" if that's the correct expression to prevent contractors from taking advantage of the double taxation agreement with the Isle of Man.

However, I disagree with it being retrospective. If HMRC were unable to win any test cases earlier, it is because the law would not allow them to win. To say now that the law was always meant to be that way and so the Finance Bill 2008 has retrospective action is not acceptable.

We will see what happens next. I have no idea what the outcome will be nor the details of how we will get there nor how long it will take. There is talk of a Judicial Review but I agree that there are probably very few people qualified to comment on how this really works. I will continue to watch and wait and of course when the time comes I will appeal.

It may upset some contributors to this forum when I say this, but I feel no moral obligation to pay any additional tax for previous years. This is regardless of the legal outcome. There was a window of opportunity for a while because of the way the law was and I took it. It doesn't exist now; that's fine. Retrospective action no.

For various reasons, I have no assets nor savings and have even been advised by an Insolvency Practitioner that bankrupcy would be the cheapest option for me. However I am not keen on the stigma and the possible problems it may cause in the future. If we come down to the wire and all possible avenues are closed, then I will try and negotiate an IVA or an arrangement directly with HMRC. If HMRC don't want to negotiate and wish to make "an example" of me along with others, then it is bankrupcy and they really do get nothing. I have no idea what their reaction will be so I will not pre-judge them.

HMRC must carry out what they believe to be correct under the law as they see it. They would be negligent if they didn't. But they have been using some scare tactics in the letters they have sent out and this is not acceptable. As a result they have set themselves up as a target for abuse. If they act completely correctly within the law, there can be no complaints about their behaviour.

So I will continue to monitor and wait to see what happens next.
Let's hope for the best.

Welcome to the bn66 threads and its good you are finding them useful.

I understand you cannot afford to pay - but suprised you feel under no moral obligation to pay. Personally (shoot me down in flames anyone) if it goes all the way and montp lose then if I can pay up I will. I knew there was a risk - I took my chances. I still reckon we will win - but as you say I am not qualified to know (I doubt there is anyone on this thread who is).

I agree about the dirty tricks - but I have becomes used to TPTB(the powers that be) doing this sort of stuff.

I am hoping for the best - preparing for the worst and as soon as HMRC contact me(and if I have the money) I will get a CTD.

[AZZIK]

Here f*ing here!!!

where where?