Government to ban avoidance scheme users

[BolshieBastard]

I believe this is aimed at the large professional bodies such as Price Waterhouse Coopers, KPMG etc rather than small operators, so I am confident it will not apply to most contractors.

The operators of offshore schemes are also unlikely to be affected as they are probably not trying to obtain government contracts!

I do think that it is evidence of the government's attack on aggressive tax avoidance schemes, I am sure we will see more in the Budget next month!

Its says companies and individuals so I dont think small opertors will be exempt.

[LisaContractorUmbrella]

I put a link in the public sector thread about this.

It applies (or will do) to companies and individuals.

Should imagine they'd have great difficulty getting anyone eligible to work for them unless they give some sort of amnesty!

Thanks BB

Yep does make you wonder doesn't it - can't see there being a Starbucks franchise in Government buildings any time soon

[Acme Thunderer]

The HMRC draft guidance does mention

"This new policy will apply to all central government above-threshold contracts advertised from 1 April 2013."

What the above threshold contract value is I don't know, but I seem to remember reading something somewhere about it being 2 million pounds.

Of course I won't stop some jobsworth issuing all contracts under the guidance

[LisaContractorUmbrella]

The HMRC draft guidance does mention

"This new policy will apply to all central government above-threshold contracts advertised from 1 April 2013."

What the above threshold contract value is I don't know, but I seem to remember reading something somewhere about it being 2 million pounds.

Of course I won't stop some jobsworth issuing all contracts under the guidance

£130k for supplies and services

[Nixon Williams]

Remember that this is a consultation document.

The target is suppliers who are deemed to have used aggressive tax avoidance schemes, the target of GAAR etc. So clearly, if a contractor has used one of these offshore schemes, they are likely to be a target, subject to minimum values.

Contractors who legitimately trade through a limited company in the normal manner, ie, basically paying a salary, usual expenses and dividends etc, will not have an issue with regards to this legislation.

[BolshieBastard]

Remember that this is a consultation document.

The target is suppliers who are deemed to have used aggressive tax avoidance schemes, the target of GAAR etc. So clearly, if a contractor has used one of these offshore schemes, they are likely to be a target, subject to minimum values.

Contractors who legitimately trade through a limited company in the normal manner, ie, basically paying a salary, usual expenses and dividends etc, will not have an issue with regards to this legislation.

I admire your optimism.

The next question then becomes what is an acceptable salary in these anti avoidance enlightened times!

[ready_to_leave]

So where are all the HMRC staff going to sit from now on?
They lease most their buildings from the Mapley trust based in Bermuda.
HMRC explains offshore property 'mess': ePolitix.com

Maybe they will have to exempt themselves temporarily so they have an an office to sit in to then make an example of themselves.

The HMRC draft guidance does mention

"This new policy will apply to all central government above-threshold contracts advertised from 1 April 2013."

What the above threshold contract value is I don't know, but I seem to remember reading something somewhere about it being 2 million pounds.

Of course I won't stop some jobsworth issuing all contracts under the guidance

[escapeUK]

I start to read the link

"New rules that will allow government departments to ban companies and individuals which take part in failed tax avoidance schemes from being awarded Government contracts"

And thought doesnt apply. Providing services via a ltd company and paying yourself via dividends is not a failed tax avoidance scheme.

[malvolio]

If the GAAR makes it to Budget 2013, it will be labelled General Anti-Abuse Regulations. The target is the misuse or abuse of schemes meant for one purpose (EBTs, film investments and the like) by an articial construct aimed at avoiding tax. Most of Paerliament, except, perhaps the Shadow Economics Secretary*, have worked out that avoidance per se is not illegal, so rather than try and redraft several thousand regualtions and laws to limit it, they will create a seaparate mechanism to declare a given practice is unacceptable and you'll get done for using it.

The point is OurCo's conventional arrangements are demonstrably not artificial so won't be in scope.



*who is a poor deluded bint who asked in the House recently how many cases HMRC had taken to court over tax avoidance, only to be told that since avoidance is not illegal the total is precisely zero.