Argentia, anyone heard of them?

[LisaContractorUmbrella]

Does it balls. They'd like to think it would maybe, but they'd have no chance with EBT's. They're just loans that have had the correct amount of UK tax paid on them.

Or a completely artificial structure designed specifically to avoid income tax and NIC's payable on the earnings of a UK resident working in the UK

[RockTheBoat]

Or a completely artificial structure designed specifically to avoid income tax and NIC's payable on the earnings of a UK resident working in the UK

can you please direct me to the relevant piece of legislation that prohibits this?

[cojak]

can you please direct me to the relevant piece of legislation that prohibits this?

From what I can see it isn't there yet but it probably will be in the future so needs monitoring

From the horses mouth...

Protecting tax revenues

Budget 2010 describes how the government will make sure people pay their fair share of tax. This includes large penalties for people who deliberately avoid paying tax on offshore investments. The government is working with other countries on this issue.

The government is also looking to regulate ‘tax avoidance schemes’ that help the highest tax payers find ways of paying less tax.

[LisaContractorUmbrella]

can you please direct me to the relevant piece of legislation that prohibits this?

There doesn't need to be legislation prohibiting it. Legislation was not laid down prohibiting offshore schemes i.e. stating quite clearly that users of such schemes would be guilty of tax evasion, 8 years ago but it hasn't stopped HMR&C imposing fines and penalties totalling £100,000's now. HMR&C came out quite clearly in the Huitson case and said that the UK tax payer and tax advisers should understand what they mean even if they have said it in such a way that they may create a possible loophole.

[cojak]

Said a representative of an EBT, earlier today.

...and his mate.

[Vallah]

Or a completely artificial structure designed specifically to avoid income tax and NIC's payable on the earnings of a UK resident working in the UK

Income tax and NI is paid on EBT schemes though. With an EBT, UK tax is paid on the outstanding loan amount at the year end. HMRC has stated clearly that loans from EBTs are NOT emoluments, so while they may legislate to stop EBT's being effective from next year, how would you suggest they're going to attack them retospectively, see as the correct amount of UK tax has been declared and paid in all cases?

[DaveB]

Income tax and NI is paid on EBT schemes though. With an EBT, UK tax is paid on the outstanding loan amount at the year end. HMRC has stated clearly that loans from EBTs are NOT emoluments, so while they may legislate to stop EBT's being effective from next year, how would you suggest they're going to attack them retospectively, see as the correct amount of UK tax has been declared and paid in all cases?

In the same way as they did with BN66. One line in a new piece of legislation and everything you have done up till then becomes evasion and not avoidance.

S58(4) " The amendments made by subsections (1) to (3) are treated as always having had effect"

If they do that it's irrelevant how much tax you have paid before, what you did was illegal and you can be prosecuted for it.

[RockTheBoat]

In the same way as they did with BN66. One line in a new piece of legislation and everything you have done up till then becomes evasion and not avoidance.

hah hah. umm not quite. there should be a script on logging into this site that asks you "do you know the difference between evasion and avoidance?", and then after that, "are you sure?".

[nfoote]

Harsh?!

If they do that it's irrelevant how much tax you have paid before, what you did was illegal and you can be prosecuted for it.

Seems rather harsh though punishing the potentially unknowing users of a service that appears (and at the time IS) legal.

Re-focusing on the Argentia bit, if someone simply googles for Umbrella Cos, sees Argentia pays up to 80% and goes with them without coming to forums such as this and asking potential flame-attracting questions like "who is a good Umbrella" then what have they done that was illegal? Agentia appears to have been operating legally for the past 3 years, people like the guy I mentioned in the OP have friends who have been using it for some time without the police turning up to drag them away. From all outward appearances Argentia simply offers a better rate than the likes of Parasol et al. Would you stick with HSBC if you saw Barclays was offering 10% better savings interest rates?

Remember not all contractors are in IT, I doubt the guy I was talking to from the OP even knows what a forum is.

I could understand someone coming along and saying Argentia is now illegal, you can't use it any more.
I could even understand someone saying Argentia has always been illegal, you must pay the tax you avoided through their naughty ways.
But someone coming and saying YOU have always being illegal cos you were using Argentia and now we're going to fine/prosecute you?????

[cojak]

Just in case anyone is confused

Tax avoidance vs Tax evasion

It's interesting that finding a definition for tax evasion from HMRC proves difficult (if not impossible) to find because they like to treat both the same way
(see this also).

There some who want this debated. As they say it's only fair that the taxpayer knows what's expected of them.

But, needless to say, HMRC think that it's to their advantage to keep taxpayer's in the dark.