BN66 - Time to fight back (Chapter 3)

[BrilloPad]

Maybe they are trying to become the UK's top employer!

Love the new signature, btw

WHS

[poppy01]

Glad to see you are in better spirits Poppy!

After our small victory last week, if I was Mr YouKnowWho (TM) , I would be very, very worried!

Much better thanks. However, I would have been even happier if HMRc didnt have the 'one day late' argument available to them. Not wanting to burst the bubble and obviously apart from that MP did well, I still dont really understand why they risked it

[SantaClaus]

Much better thanks. However, I would have been even happier if HMRc didnt have the 'one day late' argument available to them. Not wanting to burst the bubble and obviously apart from that MP did well, I still dont really understand why they risked it

I dont understand either, but the facts are:

- the judge overlooked the one day late argument because he felt this case should be heard.

- if HMRC have to resort to a flimsy argument like that, we have won the case already.

[bollox]

I dont understand either, but the facts are:

- the judge overlooked the one day late argument because he felt this case should be heard.

- if HMRC have to resort to a flimsy argument like that, we have won the case already.

what relevance does the "one day late" argument have now ? that was HMRC's pedantic argument to have the JR application struck out

the application been granted now and the judge has agreed that there is a case to answer

[pastalista]

Penalties - my case is different

I have not been able to make contact with the person who supplied this but, from other details in their email, it is unlikely that they were in one of the mainstream schemes (Montp, degraaf, Steed). There is also a questionmark over whether everything was fully disclosed on their returns, hence the threat of penalties. They only stumbled on our forum by accident.

If I hear any more I will let you know.

Hi

Sorry it has taken me so long to sign up and reply. My case is a bit different to most (by the sound of it) of yours, although it does feature the offshore EBT / loan scheme structure.

My investigation began in 2006 when my 04/05 return was questioned because of the use of an offshore company. Subsequently, they widened the investigation to cover 20 years.

It has now been running for over 2 1/2 years (small beer to DR I know) and has been stressful and expensive (over £80k in fees so far). My advisor suggested that I request COP 9 protection from prosecution and HMRC granted this. My (recently hired) lawyer says that this should never have been applied for, which is great news! Needless to say my former "advisors" have been fired.

Most of my liabilities stem from the use of offshore EBT / loan schemes which, according to HMRC in meetings I had with them are illegal. We have had the face to face debate about them unilaterally declaring avoidance illegal and about the general harm that they have done to the contracting industry in the last 10 years (I did myself a lot of favours taking this line but smug doesn't cover their attitude at the meeting).

One of the things that they are insisting upon is that I "cease immediately and for all time to use any tax avoidance vehicle". I have refused on the basis that a) a limited company can be considered to be a "tax avoidance vehicle" and b) that avoidance is still NOT illegal.

Hopefully, thanks to the work of you good folks (and those at MP and the rest) at least the retrospective elements of the law will not stand. If that is the case then my liabilites are a fraction of the number suggested by my former advisors (who to all intent and purpose could have been working for HMRC).

I stumbled across the forum as a result of another search I was doing and waited to sign up because I am not from one of the schemes listed in the original post but my case is so similar that I feel an affinity.

I did offer £100k to settle my case but this was originally declined. However, one of the reasons that I waited to join the thread was that suddenly they wanted to revisit this proposal. Although they haven't accepted it as yet, they now seem keen to propose it to their board. I wonder why that is?

I will post again with further developments but the penalties that they want to apply do apply across the board (ie to my total "liability" including the fee income from EBT / loans). Your cases may be different because the schemes concerned have all been attacked - mine has not although the mechanism is similar.

Just for the record, my estimated liability according to my previous advisors would be in the region of £600k including interest and penalties. I have been a contractor for a long, long time!!

Happy days.

On the upside, I have a very supportive and understanding wife and a 2 1/4 year old (who was born 3 months after my investigation began!!) who doesn't know any better so loves his allegedly fraudster of a daddy. I'm luckier than some.

Good luck everyone and keep fighting the good fight.

DR - I'm not sure they give out knighthoods for services to kicking HMRC, but if they start to you'll be first in line!

Regards

[Huushawdadi]

Hi,

I'm newly registered here but have swept through the halls of CUK a few times each year. I'd like to ask a couple of questions and would appreciate your opinions if you're willing.

I've just engaged one of the companies/schemes mentioned within the scope of this s858 and BN66 topic - specifically Steed Solutions - and was considering moving to it in the next week. It was actually CUK's topics that stopped me moving to Steed..I think almost two years ago now... I noticed the discussion on this or similar topic way back. As a result, I'm still with Giant and was affected by the failure of their MSC migration and am on their poorly returning Umbrella scheme. Like most I want to improve my lot.

Upon recommendation from a friend I contacted Steed. When I started discussions with Steed last week, I asked if there were any current or expected issues from HMRC that may adversely affect their scheme and was told that there were not. Given the discussion in this topic - admittedly, I've not had time to read the whole 353 pages but have read the last 20 or so - I'm now not convinced the answer was true.

So, here are my questions.

1. My understanding of the current state in this topic is that the June 16 hearing was positive for the "contractor"'s cause. But this has not resulted in a dismissal of s58 (or s858) but the setting of the need for a JR as "our" case has merit. This means that it is still possible that the HMRC may get their way but they're going to have to fight for it. It's not plain sailing for anyone in one of the schemes though.
Is this correct?

2. Does this affect people considering joining a scheme - Steed, for example? Given that this is about retrospective legislation I presume that it would still affect anyone joining and apply from this point onwards. I believe the best outcome from the legal challenge in this topic is that the loophole if closed shall not be retrospectively applied or penalised.

3. Should I not continue setup and instead consider other options?

I'd appreciate any advice.

Regards

[poppy01]

what relevance does the "one day late" argument have now ? that was HMRC's pedantic argument to have the JR application struck out

the application been granted now and the judge has agreed that there is a case to answer

none, just thought it was mad to take the risk. we would all be feeling very differently towards MP today if the judge had agreed with the one day late claim, thats all I'm saying. Lets hope MP continue to raise their game from now until the JR, and give hmrc nothing to work with. No more own goals like this one...

[ContractIn]

Hi,

I'm newly registered here but have swept through the halls of CUK a few times each year. I'd like to ask a couple of questions and would appreciate your opinions if you're willing.

I've just engaged one of the companies/schemes mentioned within the scope of this s858 and BN66 topic - specifically Steed Solutions - and was considering moving to it in the next week. It was actually CUK's topics that stopped me moving to Steed..I think almost two years ago now... I noticed the discussion on this or similar topic way back. As a result, I'm still with Giant and was affected by the failure of their MSC migration and am on their poorly returning Umbrella scheme. Like most I want to improve my lot.

Upon recommendation from a friend I contacted Steed. When I started discussions with Steed last week, I asked if there were any current or expected issues from HMRC that may adversely affect their scheme and was told that there were not. Given the discussion in this topic - admittedly, I've not had time to read the whole 353 pages but have read the last 20 or so - I'm now not convinced the answer was true.

So, here are my questions.

1. My understanding of the current state in this topic is that the June 16 hearing was positive for the "contractor"'s cause. But this has not resulted in a dismissal of s58 (or s858) but the setting of the need for a JR as "our" case has merit. This means that it is still possible that the HMRC may get their way but they're going to have to fight for it. It's not plain sailing for anyone in one of the schemes though.
Is this correct?

2. Does this affect people considering joining a scheme - Steed, for example? Given that this is about retrospective legislation I presume that it would still affect anyone joining and apply from this point onwards. I believe the best outcome from the legal challenge in this topic is that the loophole if closed shall not be retrospectively applied or penalised.

3. Should I not continue setup and instead consider other options?

I'd appreciate any advice.

Regards

Just my opinion, and I am sure there are others who could give detailed responses of the pros/cons but I would never consider a scheme again. If you have read this thread from the beginning then I am sure you would come to your own conclusion.

Go ltd. Get a good accountant.

[DonkeyRhubarb]

Steed

Upon recommendation from a friend I contacted Steed. When I started discussions with Steed last week, I asked if there were any current or expected issues from HMRC that may adversely affect their scheme and was told that there were not. Given the discussion in this topic - admittedly, I've not had time to read the whole 353 pages but have read the last 20 or so - I'm now not convinced the answer was true.

To be clear, s58 only applies to the double taxation schemes. No-one, including Steed, is operating these anymore since they were closed in the 2008 budget.

The scheme that Steed are offering now is, I believe, based on loans. As far as I'm aware this is not currently under investigation by HMRC.

I do not think that Steed have misinformed you. From the dealings I've had with them, they seem like a decent reputable company.

Also, there can be no doubt about their commitment to defend their schemes, since they have employed KPMG and one of the best top barristers in the land to challenge s58. Unlike Montpelier, they are taking their case directly to the European Court of Human Rights.

However, you need to decide for yourself whether the benefits of using a tax avoidance scheme are sufficient to compensate for the risks.

[DonkeyRhubarb]

Hi

Sorry it has taken me so long to sign up and reply. My case is a bit different to most (by the sound of it) of yours, although it does feature the offshore EBT / loan scheme structure.

My investigation began in 2006 when my 04/05 return was questioned because of the use of an offshore company. Subsequently, they widened the investigation to cover 20 years.

I'm a bit confused. BN66 (s58 FA2008) only applies to schemes which use a partnership/trust structure and the UK - IoM double taxation treaty.

It does not apply to EBT loan schemes.

HMRC have also stated on record that they are not aware of anyone using a double tax scheme prior to 2001.

Are you sure they are using the retrospective legislation in Section 58 as a basis for challenging your returns?