No To Retro Tax – Campaign Against Section 58 Finance Act 2008

[smalldog]

The impact of paying tax that HMRC says is due on a DOTAS scheme would be much more severe on the taxpayer than the impact on the Treasury of not having the revenue.

If this is seriously proposed, then HMRC needs to face a penalty if they take tax that subsequently is found never to have been due.

To discourage HMRC from simply demanding tax from everyone who reports that they used a scheme, the cost should be asymetric, perhaps a penalty against HMRC of 10% above base rate paid by HMRC to the taxpayer if the taxpayer wins in court.

Also:

"More businesses challenge HMRC decisions as 'unlawful'":

Shout99 : More businesses challenge HMRC decisions as 'unlawful'

One big question for me is, if we eventually lose this why have HMRC calculated as if we were employed. IF I hadnt used the scheme this would have been Ltd company income, not PAYE so essentially their liability calculations are on the wrong basis. Can we argue this does anyone know, it would have been salary plus divs?

[StellaFan]

perhaps a penalty against HMRC of 10% above base rate paid by HMRC to the taxpayer if the taxpayer wins in court.

tax free?

[ASB]

One big question for me is, if we eventually lose this why have HMRC calculated as if we were employed. IF I hadnt used the scheme this would have been Ltd company income, not PAYE so essentially their liability calculations are on the wrong basis. Can we argue this does anyone know, it would have been salary plus divs?

You could have done anything, so I feel that is unfortunately an entirely invalid assertion.

Surely the actuality of what is being judged is quite simply "are the loans really income". If the answer to that is yes then it will be charged to tax based on what it actually is - employment income - not based on what you want it to be. What you would have done is entirely irrelevant if my view. It's what you did that matters (once all judgements have been obtained to decide what it really was of course).

[smalldog]

You could have done anything, so I feel that is unfortunately an entirely invalid assertion.

Surely the actuality of what is being judged is quite simply "are the loans really income". If the answer to that is yes then it will be charged to tax based on what it actually is - employment income - not based on what you want it to be. What you would have done is entirely irrelevant if my view. It's what you did that matters (once all judgements have been obtained to decide what it really was of course).

Sorry this is not a loan, you've missed the point. This is income that had it not gone via a partnership would absolutely have been via a ltd co had it not been for ir35. Got nothing to do with what "I wanted it to be"

[ASB]

Sorry this is not a loan, you've missed the point. This is income that had it not gone via a partnership would absolutely have been via a ltd co had it not been for ir35. Got nothing to do with what "I wanted it to be"

Sorry, though it was a loan.

So, in your case it was partnership income which you were claiming an exemption from under some DTA. HMRC are contesting the exemption.

However, my point still stands (though that doesn't make me necessarily right of course). HMRC have precisely no interest in what didn't happen.

Ultimately is is partnership income, nothing is going to change that. It's a piece of history.

[smalldog]

Sorry, though it was a loan.

So, in your case it was partnership income which you were claiming an exemption from under some DTA. HMRC are contesting the exemption.

However, my point still stands (though that doesn't make me necessarily right of course). HMRC have precisely no interest in what didn't happen.

Ultimately is is partnership income, nothing is going to change that. It's a piece of history.

Hi asb, of course hmrc don't give a hoot, they just want everyone paye, apart from the top brass who have their own arrangements. just wondered if it's a potential avenue to explore.

[BrilloPad]

I am seeing my mate from Montpelier this weekend. If anyone has any questions then please PM me.

The only one I got last time was "Is it true there are 10 types of programmer - those that understand binary and those that don't"

[DonkeyRhubarb]

Hi asb, of course hmrc don't give a hoot, they just want everyone paye, apart from the top brass who have their own arrangements. just wondered if it's a potential avenue to explore.

This has been explored and unfortunately it's a no-go.

[BettySwollocks]

Current liability

Hi all.

Given all the recent talk regarding the possibility of having to cough up our disputed tax liabilities later this year, I thought it might be a good idea to try to calculate just how much I'm currently in for (the last uplift rates I remember seeing on this forum were supplied by DR last March).

I downloaded the BOE base rate history and applied it to the amount of tax I owe as defined by HMRC with the following provisos:

1 Interest only starts to accrue on the 1st feb following the end of the tax year in question and is calculated per whole month
2 I've presumed some sort of penalty must have been applied so I've added a 5% penalty to the tax owed before calculating interest
3 Each month the BOE change the rate (anywhere between the 3rd and the 11th) the new rate is applied for the whole of that month
4 Interest calculated is simple, not compounded

As an example, using these assumptions I've determined an uplift rate of 1.32 for the tax year ending 04.2006 which is only fractionally higher that the rate DR published 11 months ago so I believe I've made a mistake somewhere.

If someone could enlighten me on how this calculation should be done it would be much appreciated as it's important to me to know just where I stand month on month.

I appreciate that for some people their liability has gone beyond an amount that makes any practical difference to the final outcome, however, it may be useful to some to be able to determine and monitor their liability...

[DonkeyRhubarb]

Hi all.

Given all the recent talk regarding the possibility of having to cough up our disputed tax liabilities later this year, I thought it might be a good idea to try to calculate just how much I'm currently in for (the last uplift rates I remember seeing on this forum were supplied by DR last March).

I downloaded the BOE base rate history and applied it to the amount of tax I owe as defined by HMRC with the following provisos:

1 Interest only starts to accrue on the 1st feb following the end of the tax year in question and is calculated per whole month [Interest accrues from when payments on account were due - this probably explains your underestimate]
2 I've presumed some sort of penalty must have been applied so I've added a 5% penalty to the tax owed before calculating interest [There are no penalties]
3 Each month the BOE change the rate (anywhere between the 3rd and the 11th) the new rate is applied for the whole of that month [see below for HMRC interest rates]
4 Interest calculated is simple, not compounded [Correct]

As an example, using these assumptions I've determined an uplift rate of 1.32 for the tax year ending 04.2006 which is only fractionally higher that the rate DR published 11 months ago so I believe I've made a mistake somewhere.

If someone could enlighten me on how this calculation should be done it would be much appreciated as it's important to me to know just where I stand month on month.

I appreciate that for some people their liability has gone beyond an amount that makes any practical difference to the final outcome, however, it may be useful to some to be able to determine and monitor their liability...

HMRC interest rates
HM Revenue & Customs: Interest rate on late payments pre 05/04/09
HM Revenue & Customs:Late payment and repayment interest rates

My current % figures
2001/2....60.1
2002/3....53.6
2003/4....47.5
2004/5....40.0
2005/6....33.5
2006/7....26.0
2007/8....18.1

Bear in mind, the new DOTAS proposal only applies to the tax. NIC and interest would be deferred until the final outcome of the case.