Argentia, anyone heard of them?

[LisaContractorUmbrella]

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?????

The 'I didn't know any better' or the 'no-one told me' defence will not work with HMR&C. You need to understand that this Government is desperate for money and HMR&C is, essentially, their way to collect more of it. When the BN66 crowd signed up to the scheme they used they probably used all the same arguments that the EBT guys are using now and they would have been right - at the time it was avoidance and not evasion. However, HMR&C have moved the goalposts and decided that actually it was evasion and that everyone should have known it was evasion and therefore everyone deserves huge penalties and fines. HMR&C have far greater powers now than they have ever had to financially penalise those that they perceive rightly or wrongly as not paying their 'fair' share of tax.

80% take home sounds fantastic now but will it seem so great when the contractor owes 200% of the tax owed, being the difference between the tax paid on the loan and the tax due for PAYE?

[RockTheBoat]

When the BN66 crowd signed up to the scheme they used they probably used all the same arguments that the EBT guys are using now and they would have been right - at the time it was avoidance and not evasion. However, HMR&C have moved the goalposts and decided that actually it was evasion and that everyone should have known it was evasion and therefore everyone deserves huge penalties and fines.

Can I ask you one simple favour. Please go and do a little research on how the the schemes behind BN66 actually worked. Please also note that they were all fully registered with HMRC, and all incomes were disclosed on tax returns etc. HMRC have never said that this was evasion (so I dont know where you are coming with this angle), all they are now saying is that "oh what you did doesnt work etc, so you need to pay the tax and ni (plus interest) on it.

[LisaContractorUmbrella]

Can I ask you one simple favour. Please go and do a little research on how the the schemes behind BN66 actually worked. Please also note that they were all fully registered with HMRC, and all incomes were disclosed on tax returns etc. HMRC have never said that this was evasion (so I dont know where you are coming with this angle), all they are now saying is that "oh what you did doesnt work etc, so you need to pay the tax and ni (plus interest) on it.

Oh that's OK then, I am sure that Donkey Rhubarb et al will be delighted that they just need to pay back some tax and NI.......oh sorry...and interest.

So what you're saying is that HMR&C were quite happy about these schemes? I wonder why they took action restrospectively then?

[RockTheBoat]

Oh that's OK then, I am sure that Donkey Rhubarb et al will be delighted that they just need to pay back some tax and NI.......oh sorry...and interest.

So what you're saying is that HMR&C were quite happy about these schemes? I wonder why they took action restrospectively then?

I never said they were happy about it, just that your assumption that they regarded it as evasion was wrong

secondly, bn66 fight is far from over, so dont assume that DR et al will be paying anything back just yet.

look here for the latest
http://forums.contractoruk.com/accou...rt-appeal.html

[Vallah]

Lisa, it's hard to take your point of view seriously when you clearly don't know the difference between tax avoidance and evasion. Evasion is the deliberate act of giving incorrect information to HMRC to reduce a person's tax bill. It's illegal, and anybody guilty of tax evasion would be looking at a criminal record rather than "just" extra tax and penalties. All offshore aoidance schemes that I know off fully disclose all income to the authorities.

Some avoidance schemes are more "aggressive than others" but in my view, EBTs are pretty rigorous. It's just a loan from a trust that is fully declared, and the correct amount of UK tax is paid at the year end, end of story.

[DonkeyRhubarb]

However, HMR&C have moved the goalposts and decided that actually it was evasion and that everyone should have known it was evasion and therefore everyone deserves huge penalties and fines.

Lisa, I only wish HMRC had been dumb enough to retrospectively treat it as evasion (ie. a criminal offence), because then they wouldn't have a leg to stand on.

It is only because it is a civil matter that we face an uphill struggle getting the courts to rule it unlawful.

[NotAllThere]

DonkeyRhubarb - before it all went pear shaped, were you of the opinion that all the income you'd received had had the correct amount of tax paid on it?

[Vallah]

Not wishing to answer for DR, but I'm sure it was "correct" at the time. Trouble is, some of the income had a notional IOM tax credit applied, so it wasn't all taxed at UK rates of tax, which I think is what the revenue took exception to.

Everything to do with EBTs is taxed at UK rates, there's no IOM tax applied whatsoever. Take anything that people like LCU above say with a huge pinch of salt. Of course there are risks to any tax planning scheme, but people with alternative methods of working have a vested interest in ensuring that their scaremongering puts as many people off as possible.

[DaveB]

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?".

Tax avoidance is the legal utilization of the tax regime to one's own advantage, to reduce the amount of tax that is payable by means that are within the law. By contrast, tax evasion is the general term for efforts to not pay taxes by illegal means.

Evasion is illegal, avoidance isn't. Up until S58 came in those schemes were treated as avoidance. post S58 they are no longer regarded as avoidance and as having never been avoidance. As DR has said, they haven't attempted to class it as evasion because they would never get it past the courts. What they are doing is bringing civil cases to recover what, IIUC, they are treating as civil debts rather than tax that has been purposely evaded.

[DonkeyRhubarb]

DonkeyRhubarb - before it all went pear shaped, were you of the opinion that all the income you'd received had had the correct amount of tax paid on it?

From a legal standpoint, yes.

However I'm sure many will be quick to retort that it wasn't a "fair" amount.

There is a curious anomoly here.

If someone was to submit a tax return now, claiming double tax relief as per the scheme, how would HMRC treat this? Would they just say the taxpayer was mistaken or would they impose penalties? My guess is the latter.

By virtue of the retrospective legislation all our tax returns are clearly in breach of the law, and yet they are only charging interest for late payment.

But as I said before, if they did impose penalties then the legislation would be defacto criminal in nature, which would be a big no-no.