BN66 - the road to Judicial Review

[PlaneSailing]

Double or Quits?

When it comes to "risk and reward", it's human nature to focus on the "reward" bit. That is why so many people get burned in other areas of speculation (property, stock market, tulips).

If you treat the schemes as high risk investments, and only risk what you can afford to lose then there's no problem. Unfortunately, that is not the way they are marketed and there is no equivalent of the FSA to regulate tax planning.

If you read some of the websites, there is never any mention of risk, and some of the claims made are truly shocking. I shan't mention the name of the scheme in question, but take a look at these quotes for example:

"We have employed some of the most notable tax accountants and lawyers in the business to ensure that HMRC will have no grounds to investigate any of our employees. As such, it is highly unlikely that they will ever come knocking but if they ever do you will have full backing from *****."

"With ***** you really can take home up to 88% of your gross contract value without any danger of owing HMRC anything. You might be thinking that this all sounds too good to be true, but it isn’t. Our unique solution is fully underpinned by some of the most well-respected legal and tax advisors in the business."

EDIT
Now I know what you are thinking. People should use their common sense but these are not out and out scams in the normal sense of the word. Many are well established tax planning firms, and virtually all of the schemes have been approved by leading Tax Counsel.

Most are totally above board. It's just the risk warning that is glaringly absent.

Initially, I thought that going into one of these schemes again
would be insanity, but given the way Timms and others seem to
believe in one rule for them, one rule for us, and their bully boy
tactics, I'm less inclined against tax planning now.

[DonkeyRhubarb]

I have a dream...

Initially, I thought that going into one of these schemes again
would be insanity, but given the way Timms and others seem to
believe in one rule for them, one rule for us, and their bully boy
tactics, I'm less inclined against tax planning now.

And that dream is that every contractor in the Country signs up to a tax avoidance scheme for one year.

Why?

To stick two fingers up at Hartnett, Timms and the rest of the flipping chumps.

There is enough of us that we could totally decimate tax receipts and it would serve the bastards right.

[Emigre]

When it comes to "risk and reward", it's human nature to focus on the "reward" bit. That is why so many people get burned in other areas of speculation (property, stock market, tulips).

If you treat the schemes as high risk investments, and only risk what you can afford to lose then there's no problem. Unfortunately, that is not the way they are marketed and there is no equivalent of the FSA to regulate tax planning.

If you read some of the websites, there is never any mention of risk, and some of the claims made are truly shocking. I shan't mention the name of the scheme in question, but take a look at these quotes for example:

"We have employed some of the most notable tax accountants and lawyers in the business to ensure that HMRC will have no grounds to investigate any of our employees. As such, it is highly unlikely that they will ever come knocking but if they ever do you will have full backing from *****."

"With ***** you really can take home up to 88% of your gross contract value without any danger of owing HMRC anything. You might be thinking that this all sounds too good to be true, but it isn’t. Our unique solution is fully underpinned by some of the most well-respected legal and tax advisors in the business."

EDIT
Now I know what you are thinking. People should use their common sense but these are not out and out scams in the normal sense of the word. Many are well established tax planning firms, and virtually all of the schemes have been approved by leading Tax Counsel.

Most are totally above board. It's just the risk warning that is glaringly absent.

Just to put DR's comments into context. The quotes above come from a promoter who registered their site on 26 June 2009. In other words they are not a well established tax planning firm and as such almost certainly do not in fact have the tax counsel opinion that they claim they have or the financial backing to fight if and when the time comes. There is a high probability that there are elements of their structures that fail because they have tried to copy someone else's scheme and failed to do it well enough.

PS Thanks DR for all your efforts. Your psychology would make a good trader.

[PlaneSailing]

And that dream is that every contractor in the Country signs up to a tax avoidance scheme for one year.

Why?

To stick two fingers up at Hartnett, Timms and the rest of the flipping chumps.

There is enough of us that we could totally decimate tax receipts and it would serve the bastards right.

I reckon they'd lose £200 million pounds.

[Fred Bloggs]

Thanks for the perspective DR. I'm inclined to agree with you about all contractors signing up to one of these schemes and giving nu-liebour a bloody nose. However, it is just a dream, sadly.

[DonkeyRhubarb]

I reckon they'd lose £200 million pounds.

100,000 contractors x £20,000 tax/nic = £2 billion.

Still just a drop in the ocean though compared to the hangover we're left with after 12 years of Labour.

However, it would give the chumps at HMRC one hell of a nightmare to deal with!

[DonkeyRhubarb]

Just to put DR's comments into context. The quotes above come from a promoter who registered their site on 26 June 2009. In other words they are not a well established tax planning firm and as such almost certainly do not in fact have the tax counsel opinion that they claim they have or the financial backing to fight if and when the time comes. There is a high probability that there are elements of their structures that fail because they have tried to copy someone else's scheme and failed to do it well enough.

PS Thanks DR for all your efforts. Your psychology would make a good trader.

Emigre,

There are loads of tax planning firms in IoM who have jumped on the contractor bandwagon in recent years, so it's possible that there is a well established company behind this and they've just set up the site to promote the scheme.

Nevertheless, whether they've got Tax Counsel opinion or not, the claims on the website are wildly optimistic.

These days, if you use a tax avoidance scheme, you should expect HMRC to come knocking, and it is disingenuous to suggest otherwise.

Anyone in any doubt should read HMRC's Litigation and Settlement Strategy.
http://www.hmrc.gov.uk/practitioners/lss.pdf

21. Litigating where our chances of success are less than 50% would need to be justified by the particular circumstances, such as a very large amount of tax at stake (in the case itself or from immediate precedent value) or a fundamental point of principle at issue.
22. We should also give priority to cases where taxpayers have set out to undermine the purpose of tax legislation, including the more aggressive avoidance schemes.

[Alba]

Revenue’s cash rewards and confiscation targets ‘skewing justice’

Check out the article in the link below as we are now being lumped into the the tax evasion camp.

A few choice paragraphs:

Revenue & Customs, which investigates tax and smuggling cases, said it paid £11.5 million in bonuses in 2008-09 to staff of all grades who were judged to be “top performers”.

I wonder what their definition is of a top performer?

http://www.timesonline.co.uk/tol/new...-have-your-say

[Tax_shouldnt_be_taxing]

Case dismissed

Anyone in any doubt should read HMRC's Litigation and Settlement Strategy.
http://www.hmrc.gov.uk/practitioners/lss.pdf

21. Litigating where our chances of success are less than 50% would need to be justified by the particular circumstances, such as a very large amount of tax at stake (in the case itself or from immediate precedent value) or a fundamental point of principle at issue.
22. We should also give priority to cases where taxpayers have set out to undermine the purpose of tax legislation, including the more aggressive avoidance schemes.

Cool DR,

So there it is. Scheme was not litigated against in over 7 years because HMRC knew they had less than a 50% chance of success and given they did nowt for 7 years then they did not give it a priority and therefore was not a "more aggressive scheme" trying to "undermine the purpose of tax legislation". So we can all go home, forget about the JR and then thank HMRC for explaining themselves in their own manual! Genuis

[Toocan]

...
Anyone in any doubt should read HMRC's Litigation and Settlement Strategy.
http://www.hmrc.gov.uk/practitioners/lss.pdf

21. Litigating where our chances of success are less than 50% would need to be justified by the particular circumstances, such as a very large amount of tax at stake (in the case itself or from immediate precedent value) or a fundamental point of principle at issue.
22. We should also give priority to cases where taxpayers have set out to undermine the purpose of tax legislation, including the more aggressive avoidance schemes.

The "immediate precedent value" is the reason HMRC are trying to make BN66/s.58 FA2008 work. This would be a very desireable tool for them.

They're going to lose.