BN66 - Time to fight back (Chapter 3)

[theoctopus]

retrospection and loan schemes

does anyone think it possible that our friends at HMRC have a bigger plan than just retrospectively attacking the DTA schemes? Is it possible they will also 'clarify' rules around the writing off / forgiving of loans? I havent seen any talk about this and colleagues who use the loan schemes are vey confident about their position, but I dont have the risk appetite any longer to go down that route.
If MP lose our appeals process (which i sincerely hope they dont), it wouldnt surprise me if this was HMRC's next approach to getting funding to recapitalise the banks.
fwiw I no longer use MP but have gone Ltd and am awaiting my CN. it wont bankrupt me but the rainy day fund will be gone.

[DonkeyRhubarb]

does anyone think it possible that our friends at HMRC have a bigger plan than just retrospectively attacking the DTA schemes? Is it possible they will also 'clarify' rules around the writing off / forgiving of loans? I havent seen any talk about this and colleagues who use the loan schemes are vey confident about their position, but I dont have the risk appetite any longer to go down that route.
If MP lose our appeals process (which i sincerely hope they dont), it wouldnt surprise me if this was HMRC's next approach to getting funding to recapitalise the banks.
fwiw I no longer use MP but have gone Ltd and am awaiting my CN. it wont bankrupt me but the rainy day fund will be gone.

I think they have already achieved one of their main goals, namely putting people like you and me off using avoidance schemes. Even if MP win, our experience over the past 5 years will be enough to deter most people.

If retrospection becomes an acceptable practice, then any scheme which attracts enough punters will become an easy target.

[BrilloPad]

does anyone think it possible that our friends at HMRC have a bigger plan than just retrospectively attacking the DTA schemes? Is it possible they will also 'clarify' rules around the writing off / forgiving of loans? I havent seen any talk about this and colleagues who use the loan schemes are vey confident about their position, but I dont have the risk appetite any longer to go down that route.
If MP lose our appeals process (which i sincerely hope they dont), it wouldnt surprise me if this was HMRC's next approach to getting funding to recapitalise the banks.
fwiw I no longer use MP but have gone Ltd and am awaiting my CN. it wont bankrupt me but the rainy day fund will be gone.

Sounds almost identical to my reasoning/position.

Loans will be closed somehow - it will be the next HMRC attack. I only have a 6 month exposure to that though - almost worth just paying up now!

[Boycie]

I'm de-lurking. Thanks to everyone on this forum for keeping the flow of information going - I'm sure with out it, we'd all be going mad!

A bit about me: I have 2.5 years exposure with MontP, have not yet purchased a CTD and have not received any CN. Oh and I know BrilloPad and a few others on here so I'm not 'you-know-who'

[BrilloPad]

I think they have already achieved one of their main goals, namely putting people like you and me off using avoidance schemes. Even if MP win, our experience over the past 5 years will be enough to deter most people.

If retrospection becomes an acceptable practice, then any scheme which attracts enough punters will become an easy target.

Is bn666(sic) the first time ever that retrospection has been tried? I hope we are leading the way here - nice to be involved in a part of history being made!

[DonkeyRhubarb]

Is bn666(sic) the first time ever that retrospection has been tried? I hope we are leading the way here - nice to be involved in a part of history being made!

I don't think it's the first time but it may be unique in two respects:

1. the shear timescales involved - 21 years
2. the use of retrospective legislation to actually collect back tax & interest

The 2nd point sets a very dangerous precedent whatever the justification.

[Sailorman]

I have just come out of the woodwork. I was in the scheme for the 2004/05 and 2005/06 years. While I always understood there was a risk I considered the following as additional protection over and above the scheme itself:
- I would actually need to be selected for investigation - now done
- the scheme / loophole would eventually be closed down (meaning tax periods until it was closed would effectively be ok) - this is now shafted by the retrospective change
- in the event it did all go bottoms up I would have returned overseas making recovery more difficult - now shafted by changes to DTA (see below)

I have received notice of investigation but to be honest the rest is a bit of a blur. I moved 'home' from the UK two years ago. Unfortunately I was a little too honest and gave the HRMC a new overseas address to forward mail. I haven't lived there at all (but am now aware of them sending me mail - tempted to get it returned as 'unknown at address') so I haven't received any direct corrospondance. HRMC have recently entered a new DTA allowing them to request the local tax authorities to collect tax on their behalf. Just trying to work out how hard I should try to just 'disappear'???

Not wanting anyone to feel like I dont want to pay my share but feeling mighty miffed morally that this change could be made retrospective. My wife is ironically a corporate tax director of a 'big 4' and can't believe the have got away with it and is getting her pals in the UK to do some more digging!

[Toocan]

Hi All,

I beginning to suspect that some of Mr B's minions are exercising their common sense and choosing not to waste their time until the likely outcome of the JR is a little clearer. I suspect that the "News Letter" is a way of telling us to stop phoning local offices to chase CNs that they have no intention of sending until after the JR, without actually saying so explicitly.

If local offices are not doing what their told then that is an interesting situation.

The letters that I have received from my local office are of a completely different tone to those from Mr B’s office. Let me put it this way, I have no complaint against my local office.

[DonkeyRhubarb]

Confusion over "retrospective" legislation

Most legislation which is labelled "retrospective" is quite different to BN66. The term is usually coined where the Government introduces a measure which (unintentionally) affects the decision a taxpayer made in the past.

For example, in this year's budget the Government penalised owners of large cars with higher road tax. Although it was "prospective" in the sense that owners of large cars could exchange them for smaller ones to avoid the extra duty, it also had an unintended "retrospective" consequence in that the resale value of large cars became depressed. There was no way for the taxpayer to change their choice of car in the past to avoid the additional depreciation once the budget proposals were announced.

However, BN66 is a different beast altogether. This would be like as if the Government not only introduced new road tax but also backdated it several years. Owners of large cars would then have had to cough up extra tax because they would have been deemed to have underpaid in the past. Of course, BN66 is even worse than this, since we are also being asked to pay interest on top!!!

It is not uncommon for measures to have a "retrospective" consequence but BN66 may be the first time a law has been introduced to directly levy tax on income earned in the past.

[DonkeyRhubarb]

My wife is ironically a corporate tax director of a 'big 4' and can't believe the have got away with it and is getting her pals in the UK to do some more digging!

Hi ab74, and thanks for de-lurking.

If your wife is doing some digging, it's worth noting that at least two of the Big 4, KPMG & PwC, are rumoured to have sold the same scheme to large property developers. It would be interesting to know what's happening with them.

Cheers
DR