HMRC firing off some "warning shots"

[malvolio]

Tax law is based on precedents i.e. what has happened in the past as well as the law that is on the statute books; HMR&C have every right to examine any tax scheme out there including ours (before anyone moans) BUT what they should not do is change the law in the present and apply it to the past

And although the BN66 guys will argue otherwise until they get their case settled one way or the other*, that hasn't actually happened yet. What HMRC have been doing is saying "On this date we will bring in legislation to stop xxx and that legislation will be back-dated to today so you should stop doing xxx now". It's not really fair of them to do so, of course, but equally it is entirely legal (where have we heard that before...).


*Before anyone starts, I'm neutral on that subject and can see both sides, but I really hope the contractors win.

[captainham]

In isolation any statement could be misconstrued.

True, but this is hardly in "isolation" is it:

If I was going to do a one month contract no way would I use a limited.

Totally agree.

I'd use an offshore vehicle or go self employed.

Last on the list after signing away my soul to the devil is to use an Umbrella.

If that's not advocating an offshore scheme, then you're right, I need a dictionary.

Anyway, this is probably beyond the point of bickering, plus it's tedious, so my work here is done!

[prozak]

Yeah, but if it's always been known to everyone as a 'loophole' rather than 'the right thing to do', it's a predictable risk that people have knowingly taken on (and if know 'knowingly' then with a fair amount of deliberate ignorance). I somehow can't scrape together a whole lot of sympathy.

Law is grey.

So "perfectly acceptable and risk free" to one person might be "damn dodgy and putting your neck on the line" to others.

[prozak]

True, but this is hardly in "isolation" is it:




If that's not advocating an offshore scheme, then you're right, I need a dictionary.

Anyway, this is probably beyond the point of bickering, plus it's tedious, so my work here is done!

Context is also relevent no?

That post is in a thread I started as a little bit of fun against "Umbrella Providers" agenda.

[LisaContractorUmbrella]

Law is grey.

So "perfectly acceptable and risk free" to one person might be "damn dodgy and putting your neck on the line" to others.

Agree. The law is grey. However, in order to establish a propensity for risk one should have all the facts and this is what is often lacking on the websites advertising avoidance schemes

[prozak]

Agree. The law is grey. However, in order to establish a propensity for risk one should have all the facts and this is what is often lacking on the websites advertising avoidance schemes

Yes. Lacking from websites and often lacking from all the material they provide.

Not only that, I do not believe ANY of the current schemes I have heard of provide a good enough return for the risk. But I guess that is subjective to my risk profile.

If anyone reading this is thinking about going for an offshore scheme....

Due your due diligence!!
At the very least contact every party involved in the transaction and every party that has given advice to the provider. You also need to understand implicitly the structure and obligations of each involved party. Anything less than that and you are not well enough informed to make a risk based decision. IMHO.

[BrilloPad]

And although the BN66 guys will argue otherwise until they get their case settled one way or the other*, that hasn't actually happened yet. What HMRC have been doing is saying "On this date we will bring in legislation to stop xxx and that legislation will be back-dated to today so you should stop doing xxx now". It's not really fair of them to do so, of course, but equally it is entirely legal (where have we heard that before...).


*Before anyone starts, I'm neutral on that subject and can see both sides, but I really hope the contractors win.

I agree with that 100%. The retrospective legislation is entirely lawful. The fact that retrospective legislation is only lawful in a few countries in the world, and that the government condemned it when India did it, is also immoral but legal.

What I am concerned about is that HMRC misled parliament to get the legislation passed. They said they had not heard of the scheme before 2006 when they knew about it in 2001. They said only a handful of contractors would be affected but the number is 2000. They said no-one would be made bankrupt but a survey of 120 suggested it would be 10%.

Will that be enough to save us? Well if morality was a guide then it would be but here we are talking about legality.

[Vallah]

Agree. The law is grey. However, in order to establish a propensity for risk one should have all the facts and this is what is often lacking on the websites advertising avoidance schemes

Nobody would join up just having read the website info though. Some of our calls last well over an hour as everything is explained in great detail.

[LisaContractorUmbrella]

Nobody would join up just having read the website info though. Some of our calls last well over an hour as everything is explained in great detail.

I am surprised that you can explain the ins and outs of a complicated tax planning arrangement, all the benefits, risks, what would happen in the event of an investigation, current tax law, relevant case law etc etc in an hour

[Vallah]

Nobody would join up just having read the website info though. Some of our calls last well over an hour as everything is explained in great detail.

I imagine it would well take longer to explain it to you Lisa.