I always knew we were right....

[BrilloPad]

Mal is bang on with his assessment IMHO.

BP, ultimately your argument about the misery caused by these schemes falls flat. I totally sympathize with the people that were sucked into them. They're hardly blameless, but they are now in an impossible situation. However, those unwary or unwilling to do their own research will continue to be vulnerable to the nonsense spewed by scheme operators. It's important that HMRC counter this nonsense well in advance of specific schemes being prosecuted. I'm also not a fan of retrospection, but it's important that HMRC clarify their position on schemes and make it widely known to others that might be considering them.

Good post.

With these 2 posts you have just completely contradicted yourself.

And even your point about retrospection is very barbed. Are you in favour or not? A straight yes or no would be nice.

Just to make it clear, I am in favour of tax loopholes being changed at the earliest opportunity prospectively. But for HMRC to know about a scheme for 7 years and then close it retrospectively is very wrong.

[BrilloPad]

Tax avoidance is legal - you are right Brillo - but that means any scheme is open to legal challenge by HMRC. Tax legislation is spectacularly complicated, full of loopholes and open to interpretation in some cases but what HMRC seem to be targeting are those schemes which have been devised for no purpose other than to avoid tax. For instance, loan schemes - you raise an invoice for your work done - it's paid but you choose not to take this as income but pass it on to the scheme provider - they then put you in touch with a loan company who 'loan' you exactly the same amount that you decided you didn't need. The process complies with the tax laws that surround deferred income and loans but the reality is that there is no real deferment and there is no real loan - in reality you are just getting the money you earned less teeny tiny tax contributions and even teenier NI contributions based on a minimum wage paid to a sole trader. A good tax barrister may persuade a judge that the law as it is written is the only consideration and not the intentions of the parties concerned (as has happened in the past) but a good tax barrister working for HMRC could equally as well persuade the judge that the tax law in question has been exploited so that it gives advantages to the tax payer that HMRC never intended (which has also happened|).

This is the risk you take using tax avoidance schemes. However, retrospective tax legislation is another thing entirely - IMHO any retrospective legislation is wrong.

So we are in total aggreement then. Why start a thread to a post pointing out that tax avoidance is illegal then?

I am more than happy for HMRC to challenge Montpelier. In fact in 2006 Montpelier tried to force HMRC to the commissioners for our case to be heard. They refused and came up with retrospective legislation instead.

Amusingly HMRC believe they will win without retrospective legislation! So why introduce it then?

[LisaContractorUmbrella]

So we are in total aggreement then. Why start a thread to a post pointing out that tax avoidance is illegal then?

I am more than happy for HMRC to challenge Montpelier. In fact in 2006 Montpelier tried to force HMRC to the commissioners for our case to be heard. They refused and came up with retrospective legislation instead.

Amusingly HMRC believe they will win without retrospective legislation! So why introduce it then?

1. it doesn't say that tax avoidance is illegal it just says that it's open to legal challenge from HMRC
2. I posted it because it's one of the few things I have ever seen come out of HMRC that actually makes perfect sense and is written in straight forward language
3. Yes I do agree with you about the retrospective element of BN66

So don't be a grumpy bum

[AtW]

Nicely quoted out of context.

Here is what I said -

"What they mean by "tax avoidance" is essentially tax evasion that can't be easily or cheaply proven because HMRC was notified of the scheme on one hand and criminal prosecution requires much higher level of evidence."

[dezze]

Nicely quoted out of context.

Here is what I said -

"What they mean by "tax avoidance" is essentially tax evasion that can't be easily or cheaply proven because HMRC was notified of the scheme on one hand and criminal prosecution requires much higher level of evidence."

Really? I don't want to get in the middle of this slapfest, but that is a ridiculous statement. I don't have the full context, but is that what you are saying? (or HMRC)

[jamesbrown]

With these 2 posts you have just completely contradicted yourself.

And even your point about retrospection is very barbed. Are you in favour or not? A straight yes or no would be nice.

Just to make it clear, I am in favour of tax loopholes being changed at the earliest opportunity prospectively. But for HMRC to know about a scheme for 7 years and then close it retrospectively is very wrong.

Please explain the contradiction. Mal's argument is that these schemes serve no commercial purpose whatsoever and are engineered purely, and deliberately, to avoid tax, using whatever convoluted means may be necessary. Furthermore, as Lisa points out, they are entirely against the spirit of the law. It's absolutely right that HMRC should both clarify their position and take any steps necessary to determine whether specific schemes were legal at the time. No, I do not agree with retrospective changes to the law. But I think it's entirely reasonable that HMRC act against convoluted schemes that serve no commercial purpose and provide guidance to those that might otherwise, in listening to the biased opinions of scheme operators and their QCs, take an entirely different view on risk.

[BrilloPad]

1. it doesn't say that tax avoidance is illegal it just says that it's open to legal challenge from HMRC
2. I posted it because it's one of the few things I have ever seen come out of HMRC that actually makes perfect sense and is written in straight forward language
3. Yes I do agree with you about the retrospective element of BN66

So don't be a grumpy bum

It would be better if HMRC added "if we agree with the scheme then we will wait 7 years and introduce retrospective legislation then lie about it to parliament. unless you are a multinational when you can use any scheme you want"

Sorry if I appear "grumpy" - my wife is leaving me to go up to her family in North Wales taking our child. This is due to my mood since S58 was introduced. So I will end up in a bedsit hardly seeing any of my children. And then made bankrupt due to HMRc lying.

Presumably as per usual, anyone who arguers with HMRc in the professional forums will get banned so I look forward to cojak doing the necessary.

[LisaContractorUmbrella]

It would be better if HMRC added "if we agree with the scheme then we will wait 7 years and introduce retrospective legislation then lie about it to parliament. unless you are a multinational when you can use any scheme you want"

Sorry if I appear "grumpy" - my wife is leaving me to go up to her family in North Wales taking our child. This is due to my mood since S58 was introduced. So I will end up in a bedsit hardly seeing any of my children. And then made bankrupt due to HMRc lying.

Presumably as per usual, anyone who arguers with HMRc in the professional forums will get banned so I look forward to cojak doing the necessary.

Really, genuinely sorry to hear that Brillo - I know that many people have suffered because of BN66 - it must be like having the sword of Damocles hanging over you You know me and you know that I don't agree with tax avoidance or evasion come to that but retrospective legislation is just not right.

Hope that things get better for you soon

[AtW]

I don't have the full context, but is that what you are saying? (or HMRC)

That's what I think HMRC effectively trying to say.

[NotAllThere]

HMRC are entirely wrong to win (or try to win) the argument by retrospectively changing the law. I'm genuinely sorry for those who are in a financial pickle because of this. But I think you were a bit daft getting into the schemes in the first place.

There was always a risk that you could go bankrupt through HMRC using above board means to get what they believe you owe them.

If HMRC through this guidance prevent someone else getting into the same position, then I'm all in favour of it.