Guilty until proved innocent

[DimPrawn]

HMRC uses new powers on contractors: 'I was told to pay '£30,000 within 90 days' - Telegraph

Thousands of contractors and freelancers have become ensnared in a £5.5bn tax grab – aimed initially at wealthy tax dodgers – that allows HM Revenue & Customs to demand backdated taxes to be paid, in full, within a three-month deadline.

Previously, HMRC was forced to pursue its missing billions in costly court battles, prompting the Government to approve the legislation in 2014.

Among them is freelance IT technician Mr Adams (not his real name), who since April has received three demands totalling £27,900 from a job he held seven years ago.

If it’s later found that he was innocent of using an “aggressive avoidance” scheme, he will get a refund. In the meantime he has to find the money within months.

“The latest deadline I’ve been given is the end of September,” said Mr Adams, who explained that the amount was around a third of his yearly salary. “If I don’t get the money, I’ll go bankrupt.”

Good old Tories, they found a cash cow to milk. Letters coming to a doorstep near you soon.

[xoggoth]

aimed initially at wealthy tax dodgers

It's these perpetual extensions of powers that were initially promoted as being for a specific purpose that should make any sane person wary of any government legislation, no matter how sensible it seems at the time.

[DimPrawn]

It's these perpetual extensions of powers that were initially promoted as being for a specific purpose that should make any sane person wary of any government legislation, no matter how sensible it seems at the time.

Indeed.

A tax system so complex no one understands, and a tax collection agency with almost unlimited powers, that can now bypass the legal system.

Osborne makes Bliar and Brown look like rank amateurs...

[PurpleGorilla]

So what happens if Mr Adams doesn't have the money to pay the £27k up front?

[DaveB]

So what happens if Mr Adams doesn't have the money to pay the £27k up front?

If you don't pay an APN within the 90 days they start adding penalties and interest (penalty is up to 15% of the amount "owed" I believe.) Even if you then prove that tax was not owed you remain liable for the penalty, as that sum was not part of the tax owed but incurred as a result of failure to pay the APN.

So if he can't pay the APN, but subsequently proves the tax was not owed, he will still be let with a bill for £4,050, plus whatever it cost him in accountants / advisors fees to argue the case.

[DimPrawn]

If you don't pay an APN within the 90 days they start adding penalties and interest (penalty is up to 15% of the amount "owed" I believe.) Even if you then prove that tax was not owed you remain liable for the penalty, as that sum was not part of the tax owed but incurred as a result of failure to pay the APN.

So if he can't pay the APN, but subsequently proves the tax was not owed, he will still be let with a bill for £4,050, plus whatever it cost him in accountants / advisors fees to argue the case.

Tax lawyers are cheap, don't worry. Most are paid min wage, so it's not sweat a give year legal battle in the high court. As long as you have £20m in the war chest to pay upfront legal costs, you'll be fine. Or you can just cave in a agree with the HMR&C tax grab if you don't.

[suityou01]

Bit sensationalist of you DP. This only affects contractors this invested in an offshore tax avoidance scheme. Those with PSCs, that shoot straight dice are not on the radar.

[DimPrawn]

Bit sensationalist of you DP. This only affects contractors this invested in an offshore tax avoidance scheme. Those with PSCs, that shoot straight dice are not on the radar.

[AtW]

"Between 2008 and 2010, Mr Adams freelanced at various banks in London. "

Worked for 3 years in a bank and does not have 27 grand cash saved, especially given not having to pay taxes everybody else does? When I had my first proper job in UK on £35k per YEAR I was saving at least £1k after tax every month. That money is the tax element that he should have expected to pay, how come he was so dumb not to put it into HMRC no-questions-asked deposit scheme which would have stopped all penalties and fines in the event of his "scheme" not working the way he was told?

Just how fooking dumb one needed to be to continue to use those schemes AFTER HMRC required those schemes to register and you had to put the number on your tax return? At that point surely it should have been obvious - if it requires a tax scheme number then it should not be touched with a bargepole because it's a fooking SCHEME.

[tomtomagain]

If only he hadn't signed up to that dodgy tax avoidance scheme and just played it nice and simple like most of the rest of us do.

Invoice his clients. Filled in his tax return. Paid his dues.

He wouldn't have all this stress.

He must be kicking himself now for being so greedy ..... oh no wait ... he's bleating on about it being HMRC's fault.