Government Consultation on tax avoidance schemes

[CDJ]

I don't necessarily have a problem with this.. if there is sound legal principle that one scheme is materially the same as another, then sure..

But who judges that.. HMRC??

That doesn't seem fair to me.. where is the due process that all citizens have a right too? An independent judiciary that reviews a case and says yes this a follower.. fine.. but an arbitrary.. well it looks the same and we want the cash.. thats not due process.. that's tyranny..

Case in point - the Boyle case that HMRC is trumpeting - this is materially different to the typical EBT Scheme on many significant legal points - but in HMRC's view all EBTs are like Boyle.. (but not like the Rangers case - which they lost)..

This is dangerous stuff .. but who will speak on Contractor's behalf?? any industry bodies willing to consult with HMRC on this?

[DonkeyRhubarb]

It's not the "follower" measure that really troubles me. Yes, that's open to abuse but the proposed extensions on page 15 onwards are much more sinister.

"The application of accelerated payment to ‘follower notice’ cases, where the
underlying legal principle has been addressed by the court or tribunal, goes some
way towards rebalancing the economics of entering into avoidance schemes by
requiring some users to pay up front, but it does not go far enough. Therefore, as
announced at Autumn Statement, the Government wants to consult on widening
the criteria by which taxpayers are required to pay disputed tax earlier in the
process."

[AtW]

It's easier just to slap everyone with a payment notice then it doesn't matter how long cases take.

This is the direct result of some people using stalling strategies - HMRC got tired of it, which was an entirely predictable thing, the only suprising element is why it took them so long to do it.

[TykeMerc]

Bear in mind this is a proposal but yes I stand corrected it does look as though they will send payment notices to users of DOTAS provided that there is already an ongoing appeal or enquiry - there is a comment:

"most structures that are notified under DOTAS have characteristics or hall marks of avoidance"

Certainly would seem that we are heading towards a guilty till proven innocent scenario

I've never been a scheme user (always smacked of too good to be true and I'm a cynic), but that bit is not only alarming, it's plain not on. Admittedly HMRC have already shown they're a bit short on the natural justice front by employing Tardis type legislation, but I don't see how they can apply a punishment regime without evidence of acknowledged wrongdoing.

[Zero Liability]

They're a bunch of thugs in suits there to collect revenue for the government. To a degree, they have to abide by legal strictures, like the government itself does - to a degree. They have to or else there won't even be a semblance of the rule of law. I think there isn't much push-back against them when harassing contractors because we're a tiny minority of the population and we also don't have armies of lawyers to battle HMRC and ultimately humiliate them. They'll only bully people they can get away with.

I do wonder who actually sits there doing a cost-benefit analysis in terms of the impact on the economy for this sort of thing, though.

[AtW]

I do wonder who actually sits there doing a cost-benefit analysis in terms of the impact on the economy for this sort of thing, though.

Do you forsee a major negative impact on the economy resulting from enforcement of existing tax laws?

I mean other than tax "avoidance" industry taking a big hit.

[Zero Liability]

Not without looking into how widely they are used and why, no. It doesn't stop me from wondering what analysis to this effect HMRC and the government have to show, however.

[GB9]

Most of these schemes are evasion rather than avoidance so I can't see any problem with this. Anyone who uses some bizarrely concocted scheme to pay themselves deserves what they get.