BN66 - Round 2 (Court of Appeal)

[Boycie]

really dont think they have a retro angle at all here since there is no legislation that they can "change" to "clarify".

Thats also probably why they have said they will be introducing "legislation from 6 April 2011 onwards"... meaning that it needs to be new legislation that has been approved through the normal consultation process and it clearly isnt ready now\hasnt gone through the normal process.

Anyone spoken to Montpelier about it? Just wondered what their take was on things.

[Vallah]

This is the bit that doesn't add up to me.

By pre-announcing it a year in advance they are:

a) encouraging people to use it

b) giving the promoters oceans of time to devise replacement schemes

Exactly right on both counts.

Sometimes you just have to shake your head at the stupidity of people. But also thank them for the upturn in new business, and the higher bonus I'll get as a result!

[BarneyCool]

dont think they have a retro angle

really dont think they have a retro angle at all here since there is no legislation that they can "change" to "clarify".

Thats also probably why they have said they will be introducing "legislation from 6 April 2011 onwards"... meaning that it needs to be new legislation that has been approved through the normal consultation process and it clearly isnt ready now\hasnt gone through the normal process.

None of us thought there was a retro angle last time! And i'm sure there wasn't until they dreamed it up in 2008. As we all know to well it is very dangerous and foolish to try and 2nd guess what 5hite they will come up with next time.

[RockTheBoat]

Anyone spoken to Montpelier about it? Just wondered what their take was on things.

Yes. Spoke to John Cuddy on friday and he said that the budget details are too vague at this stage to assess the impact on the current arrangement. He said that they would wait until the normal consultation process begins in the summer to see what the fine print says

[moira under the stairs]

None of us thought there was a retro angle last time! And i'm sure there wasn't until they dreamed it up in 2008. As we all know to well it is very dangerous and foolish to try and 2nd guess what 5hite they will come up with next time.

Agree very dangerous & foolish... but hang on a minute isn't that what we was expeted to have done from the Judgement ??

[Morlock]

I may be running the risk of going off on a slight tangent here....

But I require a small piece of advice. As an ex-military chap and one that's

a) Not too bright
b)A 'newbie' in the 'uber' complicated world of contracting

Would anyone recommend me using an 'IOM offshore discretionary payment' company (i.e. Sanzar Solutions)?

I am aware of the current pitfulls regarding BN66 - does this fall into that catergory? Also, the company keeps contacting me, offering legal protection if it does goes T.U. - would this make any difference if the dreaded HRMC started to knock at my door??

Many thanks, and best of luck to you awaiting forthcoming decisions...

Up the revolution!

I wouldn't recommend any offshore solution at the moment. Not only are they on HMRC's radar, they are being laser-designated for a cruise missile strike. And the "legal protection" won't be worth the paper it's written on if the company that's offering it shuts up shop.

[SantaClaus]

I wouldn't recommend any offshore solution at the moment. Not only are they on HMRC's radar, they are being laser-designated for a cruise missile strike. And the "legal protection" won't be worth the paper it's written on if the company that's offering it shuts up shop.

I wouldnt credit HMRC with laser precision, more an out of control Russian tank.

[Emigre]

I may be running the risk of going off on a slight tangent here....

But I require a small piece of advice. As an ex-military chap and one that's

a) Not too bright
b)A 'newbie' in the 'uber' complicated world of contracting

Would anyone recommend me using an 'IOM offshore discretionary payment' company (i.e. Sanzar Solutions)?

I am aware of the current pitfulls regarding BN66 - does this fall into that catergory? Also, the company keeps contacting me, offering legal protection if it does goes T.U. - would this make any difference if the dreaded HRMC started to knock at my door??

Many thanks, and best of luck to you awaiting forthcoming decisions...

Up the revolution!

In addition to the other thoughts you may receive you should also take a long hard look at the solution provider. After all, you wouldn't accept a gig with a client or through an agency that were unlikely to pay you when expected. You should apply the same due diligence towards any intermediary in your financial food chain.

There are some providers that have genuine multi-national tax planning operations where contractor schemes are a small part of their business. Others offer contractor schemes only, often ripping off the IP of someone else, with no guarantee that documentation is properly executed particularly in the right jurisdiction.

If it is the sort of thing you feel you want to do, do your homework first. Some businesses have a genuine business presence on th web, others get more airtime in blogs and forums than through their own acumen - says it all.

[OnYourBikeGB]

really dont think they have a retro angle at all here since there is no legislation that they can "change" to "clarify".

Thats also probably why they have said they will be introducing "legislation from 6 April 2011 onwards"... meaning that it needs to be new legislation that has been approved through the normal consultation process and it clearly isnt ready now\hasnt gone through the normal process.

Don't forget that when it came to the crunch they gave up on the 'clarify' angle altogether. They just said that they wanted to do it, so they did, and the court had no right to stop them.

I agree with DR, there is something here that is very fishy. It may be that it is so widely used, and they are having a hard enough time with us, that it is a tacit admission that retro is just too problematic. After all, they may not see a penny from us for years (if ever), and they need it asap. How many challenges would they face from how many different companies if they went retro with this one? But I think proceed with caution has to be the way of the wise, and make sure that if you end up in a fight, that the company you are dealing is well established and has lots of financial and legal muscle. You wouldn't want to relying on a AJ type setup. After all, where would be without MP?

[Toocan]

http://www.contractoruk.com/news/004806.html



In a related move, and in line with BN66, the government says it will stop companies from claiming "excessive" tax relief for foreign taxes by "abuse" of the UK's double taxation treaties.

To do this, the government will deploy a package of new measures from April 1, 2010, that will include "principles-based approaches to protect Exchequer revenues."

The notice warns of "a measure countering avoidance involving the release of loans to participators by close companies [so]...close companies will be denied a corporation tax deduction for releases or write-offs of loans to participators."

Until now, where a loan was made to a participator and subsequently written off, a reduction against corporation tax could be claimed, explained ex-Revenue inspector Kate Cottrell.

"This [legislation] comes into force from today," warned McMahon, also a former tax inspector.

"[It will apply] where a director takes a loan from the company and then it is written off. Although there was a benefit and NICs to pay, it was considerably less than having to pay off the original loan."


Seems the budget will scupper Montpelier (and others') current offshore loans schemes...

This does not describe the Montpelier scheme. In addition I think (but I'm not sure) that offshore entities cannot be close participators.

The above text confuses two different pieces of informaiton:

1. The director getting a loan and writing it off (saves on corporation tax for the company) "loophole" which has now been closed and;

2. This: http://www.opsi.gov.uk/acts/acts2010...0100008_en.pdf
Which allows retrospection and comes into force on 1st April. Note that the treasury can change the law by order and therefore without debate in Parliament. How did that get through? Maybe because it was not in a finance act?

The loan schemes appear to be okay until 1st April 2011 when the government will then close them down. I doubt, somehow, it will be that simple though.

As it stands, the government have basically given the loan schemes the all clear until next year. I would not normally make such a statement, but that does appear to be what HM Treasury are saying.

Retrospection for the DTA scheme, and the all clear for loan schemes. Am I the only one who thinks that is somewhat perverse?