The stuff you need to know about loan schemes......

[BlasterBates]

Well the thing is the UK legal system with regard to tax is complicated, not because UK tax is particularly complicated because a judge will countenance complicated legal arguments, which is fair enough but leads to all this uncertainty. In most countries the judge would slam his hammer down and say that's just a tax scam, and that's the end of it. It does simplify things because you know full well you won't get away with it.

Now a government has two options either simplify it in favour of the tax schemes in which everyone gets away with it and hence everyone starts paying no tax, or get judges to slam their hammers down in a no-nonsense fashion as they do in Germany for example. I think really they have no choice but to go that way otherwise the court system will just get clogged up with thousands of complicated disputes.

Tax schemes were all very well when a few very rich people tried it on and if they fail they lost a few hundred grand and so what; but we now have a load of wannabe'e betting the farm on something they don't understand.

[cojak]

Take the use of SEBTs for example, they issued a press release about a year ago stating that in their opinion they do not work. We are still patiently waiting for them to elaborate on why they think they don't work and I suspect we will wait some time.

But they've put a peg in the ground and can point to this and say 'But we said that this wouldn't work' and start the retrospective charade from that point - they don't need a solid legal argument on past history!

[LisaContractorUmbrella]

But they've put a peg in the ground and can point to this and say 'But we said that this wouldn't work' and start the retrospective charade from that point - they don't need a solid legal argument on past history!

Exactly! How many instances have we seen over the years where a whisper goes round that HMR&C are targeting something new, then we have their opinion published or a consultation started and the next thing you know half a dozen 'solutions' for contractors disappear overnight

[geoff from contracta IOM]

Exactly! How many instances have we seen over the years where a whisper goes round that HMR&C are targeting something new, then we have their opinion published or a consultation started and the next thing you know half a dozen 'solutions' for contractors disappear overnight

It is a very fluid industry, basically a never ending game of cat and mouse. Every time there is a relevant judgement the methodology is likely to evole to try and stay within the law. The reason companies like mine have flourished over the years and through different tax mittigation structures is as providers we have infintely more money to spend on legal advice than HMRC do and also tend to react much faster than them to developments.
But alas we may be in our twilight years .......... where is the violin playing smiley ?

[LisaContractorUmbrella]

It is a very fluid industry, basically a never ending game of cat and mouse. Every time there is a relevant judgement the methodology is likely to evole to try and stay within the law. The reason companies like mine have flourished over the years and through different tax mittigation structures is as providers we have infintely more money to spend on legal advice than HMRC do and also tend to react much faster than them to developments.
But alas we may be in our twilight years .......... where is the violin playing smiley ?

They're not the speediest are they but, unfortunately very dogmatic - bit like being stalked by an iceberg - might not reach you for years but will cause a lot of damage when it does

Have to ask the mods about that one but have one of these instead

[geoff from contracta IOM]

They're not the speediest are they but, unfortunately very dogmatic - bit like being stalked by an iceberg - might not reach you for years but will cause a lot of damage when it does

Have to ask the mods about that one but have one of these instead

And the same for you

[Bones]

Geoff - although I cannot profess to fully understand the details of the scheme, it seems that it potentially falls down on the definition of a ‘loan’ (ok maybe not the 'only' issue). Why cant the arrangement involve a ‘normal’ loan arrangement? The contractor joins and borrows say £20,000 - £25,000 up front. He then pay the loan off over 25 weeks (or similar) from his contract, plus suitable ‘interest’ and takes a nominal wage as usual over the 25 weeks, then repeat?

Maybe I should start a business, .

[geoff from contracta IOM]

Geoff - although I cannot profess to fully understand the details of the scheme, it seems that it potentially falls down on the definition of a ‘loan’ (ok maybe not the 'only' issue). Why cant the arrangement involve a ‘normal’ loan arrangement? The contractor joins and borrows say £20,000 - £25,000 up front. He then pay the loan off over 25 weeks (or similar) from his contract, plus suitable ‘interest’ and takes a nominal wage as usual over the 25 weeks, then repeat?

Maybe I should start a business, .

I'm afraid it's a bit more complicated than that , you can't actually be connected through employment to the funds being made available for the loan.

[Bones]

I'm afraid it's a bit more complicated than that , you can't actually be connected through employment to the funds being made available for the loan.

????? Thats slightly contradictory!, it would operate in exactly the same way as all the other schemes, only the amounts would be different....and the fact you pay the loan back (indirectly).

[Waldorf]

Geoff - although I cannot profess to fully understand the details of the scheme, it seems that it potentially falls down on the definition of a ‘loan’ (ok maybe not the 'only' issue). Why cant the arrangement involve a ‘normal’ loan arrangement? The contractor joins and borrows say £20,000 - £25,000 up front. He then pay the loan off over 25 weeks (or similar) from his contract, plus suitable ‘interest’ and takes a nominal wage as usual over the 25 weeks, then repeat?

Maybe I should start a business, .

How would you be better off with this?

You borrow £25K and then you pay it back? is this not just the same as you would do with HSBC, Barclays, NatWest etc?

Stick to the day job I think!