BN66 - JR Judgement Day

[johnnyguitar]

Do a search - mentioned loads of times - CTD = Certificate of Tax Deposit.

Basically for every £1 worth of CTD you hold you neutralise the interest the taxman charges on £1 of tax owed from the point you buy the CTD. Main problem with the CTD is the paltry rate of interest it acrues - averaged less than 1% a year over the time I held them....

The problem I have with CTDs is they get the benefit of my money for the term.
So, they're charging me 3.0% now (correct ?)
I can get 2.5% in cash ISAs and various savings accounts come fairly close.
So, I'm not quite covering their interest and there will be a difference to make up if I have to pay up.
But, if we eventually win, at least I've made some interest on this money as some sort of recompense for this charade.

Actually, for peace of mind, I'm actually thinking of borrowing a lump sum on my mortgage (currently paying 1.25%), sticking it in ISAs etc which will outstrip the borrowing cost and go some way to meeting the revenue's interest charges.
This way, I can sleep at night, knowing I have the money to hand and that I'm already paying it off (over my remaining 19 year mortgage).

So, if hell freezes over, I'll have the money (most of it) in a pot.

If we win, I have a nice lump sum that I
can either put back against my mortgage or spend on champers!

It makes sense for those who can borrow extra against their mortgage - borrow at the low rate and pay it back it at the higher rate.

Anyone spot any flaws in my master plan ?

[kittykatty]

Long time lurker... but the way I understand, the interest accruing on any tax liability starts from the year it was incurred. This can mean a snowball effect where suddenly you find you're paying 30-40% interest on a liability from years ago.

The CTD offsets that interest accruing even more.

Donkey Rubarb posted a useful guide some time ago with the estimated accrual rates at the start of one of the BN66 threads.

[swede]

Annual National Contractor Day

What we need is a protest march on Parliament.

Now I have to work out how we can get 2000 contractors to take a day off work

Could be onto something there ...how about starting an "Annual National Contractor Day"?

Everyone could down-tools (fingers) for the day and remember the week when thousands of their predecessors left the country in droves. The week when it because compulsory for you to send a spare set of keys to your house and a map of how to find your kids piggy-banks, to HMRC.

[TheBarCapBoyz]

There is something that really doesn't smell right about the Judge's ruling.

It is so completely at odds with the approach to retrospection set out by Parliament's own human rights committee (point 1.7).

http://www.publications.parliament.u...3/13304.htm#a2

One of the members of this committee is a former High Court judge, and was one of the leading architects of the UK HRA (Google "Lord Lester of Herne Hill").

The Judge talked about not wishing to intervene in policy and social issues but that is exactly what he has done. He has put an interpretation on what satisifies Article 1 Protocol 1 which goes way beyond any previous understandings of proportionality.

Basically, if I read his verdict correctly, he is saying that in the case of tax avoidance, retrospective legislation is acceptable, irrespective of the degree of retrospection or the impact on the individuals affected.

I am starting to wonder if Brillopad was right...

That's exactly what I've been thinking.

Parker has made a subjective judgement on the artificiality or otherwise of a particular tax planning mechanism, when arguably all tax planning is articifical, and decided that that "artificiality" trumps any consideration of proportionality.

Which must certainly constitute sticking his sticky beak in to issues of public policy.



What would a "non-artificial" scheme look like? A "natural, organically grown, free-range" tax scheme?

A scheme that "contributes to the common good"? to paraphrase our BBC friend, captain Bollock.

Then there's that condescending crap about "Every tax payers dream"? Makes it sound like we were living in some eutopian fantasy world merely by arranging our tax affairs according to the laws of the land. What's that all about?

As for that garbage about restricting competition. That just beggars belief.

No, there's much more to come on this one, my friends.

[johnnyguitar]

Has anyone heard of a case Willoughby brought up around 1987? I have canvassed the opinions of some of my people who are now on various other "loan" schemes and one of their parent companies sent out an email update today basically stating "do not worry, the resuly of Huitson v HMRC has no impact on our system" In their opinion, the MP scheme never worked and this was based on a case brought up in 1987...Willoughby?????

Perhaps they mistook this for Padmore and indeed it may well be corporate waffle to reassure their current client base.

Personally, I'm thinking getting out of all this DTA / Loans etc and doing the extreme of limited company but taking it all as salary and taking the full tax hit on the lot...this really appears to be the only safe way not to get attacked in the future.

I to, am considering a move back to the LTD company route. But I just can't bring myself to hand it all over (employers AND employees NI ???!!) by default.
My thinking at the time, when I got into al of 'this' was to take the advantage and put it aside in case they ever come after it.
My mistake was not listening to my own advice: believing 100% that the scheme was safe and, bearing in mind that everything was transparent and HRMC hadn't said a thing to me about my returns, I spent it. bugger.

If I go back to LTD, I'll trade as before. I firmly believe, the nature of my work puts me outside IR35. But I can't rely on that. We can't rely on anything anymore. So, I'll just put the difference to one side.

For how long ? I have no idea. But my children might benefit one day.
Oh - they'll tax it then I suppose

[RockTheBoat]

Q- People are asking why don't MP give us more information?
A- Because it may end up on public bulletin boards for HMRC to view and be forewarned.

I was hopeful but never expected the JR to be the end of the matter. HMRC were always going to appeal if we won in any case and for a decision so huge to be made by the High Court was unprecidented. If MP had said as much before the court case HMRC would have been rubbing their hands with glee and may have held back other arguements. As it was they have now come up with their best arguments in a lower court and exposed some of their inconsistancies and weak points (in a forn that cannot later be said to have been done by a junior member of staff!).
We have tested the water, prodded and poked and now know how they are arguing their side and will be able to better target and argue/expose those weaknesses in a court better able to make a judgement.

Dont forget winning small battles along the way doesnt win the war.

hear hear

although I didnt get a lot of sleep last night over all this ... (even the bottle and a half of fine red didnt help), I am feeling a lot better today than I did yesterday ... the feelings of shock, panic, confused thoughts of "what happened to certainty in law, in fact what happened to the rule of law?) have now gone and I have now returned to my normal state of anger and p1ssed-offness. My resolve to fight this has returned to the levels pre-yesterday ... i.e back to 100%

[smalldog]

what really sticks in my throat isn't so much the retrospection to be honest, its being charged interest for all the years HMRC did nothing and the money WAS NOT PAYABLE, I never got a demand??!

I just find that totally offensive and unfair....As the judge said about us, it was potentially in our interest to not press matters and to get closure, well guess what it was in HMRC's too judgey boy....did u think of that side of the equation, its a money making scheme for them? IF we had got demands immediately after submission of our SA's we wouldnt have accumulated interest so HMRC would have got less....

[elpinar]

Do a search - mentioned loads of times - CTD = Certificate of Tax Deposit.

Basically for every £1 worth of CTD you hold you neutralise the interest the taxman charges on £1 of tax owed from the point you buy the CTD. Main problem with the CTD is the paltry rate of interest it acrues - averaged less than 1% a year over the time I held them....

Provided you still hold it at the point you pay the tax bill

[Slobbo]

How disgusting is this

I received this email today from SJD. I find it predatory and disgusting. They haven't even got the facts right. I will not be acquiring SJD if this is the attitude they have.

Hi,

If you have once used or are thinking of using an offshore tax scheme as a way of avoiding UK tax please read the note below.

Yesterday at 9:30am the Royal Court of Justice ruled the retrospective effect of BN66 is not unlawful.

Which in plain English means that HM Revenue and Customs can now go back in time and retrospectively apply a piece of tax legislation which will affect thousands of contractors who either once used or are still using an offshore scheme/company as a way to avoid paying UK taxes.

HMRC can now go back as far as 1987 (which is when BN66 was imposed), so even if a contractor used a scheme in 1987 for one day or one year, they may now have to pay both fines and backdated taxes.

This news further supports the fact that contractors should think very carefully before using offshore schemes as a way of avoiding paying UK taxes.

If you have any questions about working through your own legitimate UK limited company, as many hundreds of thousands of contractors already do and many millions of other UK limited companies do, please don’t hesitate to either call or drop me an email.

Kind regards

Michelle

PS basically if you live in the UK, work in the UK, get paid for work you do in the UK, there is no way and has never been any way of avoiding UK taxes. Working through your own UK limited company is and has always been the most tax efficient way of working legally.

_____________________________________
Michelle Turbutt
SJD Accountancy
Client Liaison Manager
High Trees, Hillfield Road, Hemel Hempstead, Herts, HP2 4AY
Tel - 0500 152 500 / 01442 232700
Fax - 01442 257679

michelle.turbutt@sjdaccountancy.com
www.sjdaccountancy.com

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[sjw]

Time for a straight answer...

Okay - here we go again - I've tried to post this three times now...

Montpelier signed us up individually not as a collective and they need to start taking reponsibility on that basis. Carry on the fight by all means - but in the meanwhile they need to assess each person affected and advise accordingly. That is only fair and proper.