The BN66 thread has broken a record!

[Incognito]

I recommend Minestrone/Malvio sock-puppet has a good read of the BN66 thread.

Whether or not you like what we have done, the point at issue is whether HMRC have been fair and proportionate in changing the law and applying it retrospectively for 7 years.

If they win the case, there is nothing to stop them applying any tax rule retrospectively. It will change the basis of our taxation system from certain to uncertain and drive business out of the UK.

I believe Minestrone has quite a good grasp of the subtleties. Whereas the BN66 thread is a very subjective view on BN66.

For example, your statement of the point at issue is entirely skewed. You say they've changed the law, HMRC say they're simply clarifying it. That's the argument at hand.

[Incognito]

Purely hypothetically how content would you be if HMG passed a retrospective law that taxed all UK football fans at 75% of their lifetime income simply for boring the rest of the planet to death? Would that be fair?

You're demonstrating Minestrone's argument for him and proving you don't understand the issue at hand.

This example has absolutely no reflection on the current HMRC action. A better example would have been if HMG passed a tax 10 years ago on Football fans at 75% and then today clarified that they also meant Rugby Football fans as well. No new tax could be created through a clarification.

The fact that people are stating that HMG should be passing clear and concise legislation at all times clearly have no understanding of the law or the law making process.

Mischief rule

We have a common law system, the Judiciary are meant to interpret Parliaments intention. It’s their role.

[d000hg]

I do take dividends out of my Ltd Company on the earnings I have made from the multiple clients I work for through the year and I also have paid tax on all my divs to the treasury.

But a standard contractor, working through his Ltd as many do, what about him? In some countries contractors are forced to work as 'self employed' more like our 'sole trader' option, if I have my facts straight - the whole 1-person-Ltd thing is really not the 'right way' to work as a contractor conceptually. What if the government say "you're all running companies to avoid paying tax, we're going to stop that being allowed and apply it for the last few years as well"?

[RichardCranium]

What if the government say "you're all running companies to avoid paying tax, we're going to stop that being allowed and apply it starting from April 2000 when we first mentioned the PSC idea, plus interest, plus penalties. And you cannot say you didn't know it was coming because you lot created PCG which withholds its membership from us specifically because you know full well you should have been paying this tax all along."?

FTFY

Link: http://www.hmrc.gov.uk/ir35/seprelease.htm

[d000hg]

I don't remember creating PCG. You're confusing me with someone else.

[RichardCranium]

I don't remember creating PCG. You're confusing me with someone else.

I was trying to reinforce what you were saying.

[NickFitz]

Wd000gh&RCS

Given that I was never involved in this scheme and long ago lost the will to fart around with IR35, but nonetheless take an interest in the potential problems faced by my fellow contractors, let me offer a further explanation, most of which I've tried to say before, and which obviously is based on my own understanding and does not constitute legal or financial advice blah blah disclaimblah:

The important point about this Judicial Review is that on the first day HMRC shifted their defence of retrospection from being "There was a rule that should have applied, and we fixed that with retrospective legislation" to "We accept that the scheme was legal, and that said rule never applied, even under the retrospective legislation; the judge accepts that the 'clarification' embodied in the retrospective legislation doesn't apply, but we don't care about that either; we've decided that it shouldn't have been legal even though it was; we fucked up, but we shouldn't be held accountable for the fact; our argument is that we can retrospectively impose whatever rules we damn well please, by claiming that whatever Parliament might have actually said, it really meant to say what we wanted it to say. Oh, and we want backdated interest and penalties as well. Fuck you."

So, outside IR35? Contracts reviewed, all in the clear, nothing to worry about?

In your dreams.

If HMRC win this, they can have legislation passed "clarifying" IR35, and stating that this was the way they intended it to apply all the way back to when it was first introduced. Furthermore, not only can they claim the tax you have avoided by being outside IR35, they can also charge you interest and penalties all the way back to...what was it, 2000? That's what they're claiming they can do over this scheme; and as they now assert that they don't even have to have new legislation to "clarify" something which they have already admitted was legal at the time, anybody who says that, being outside IR35, what they did was legal at the time, is missing the point.

You may have been squeaky clean under IR35. When HMRC get the right to say that "squeaky clean" is "tax evader" you'll be fucked big style. Yes, you.


Note to admin: I make no apology for circumventing the naughty words filter in this post as I did so for purely rhetorical reasons, but feel free to edit it if you see the need.

[Cosmo]

I believe Minestrone has quite a good grasp of the subtleties. Whereas the BN66 thread is a very subjective view on BN66.

For example, your statement of the point at issue is entirely skewed. You say they've changed the law, HMRC say they're simply clarifying it. That's the argument at hand.

Perhaps you should read the BN66 thread - yes HMRC say they are clarifying it but the fact is they have taken 7 years or so to clarify it - they knew all about the loophole way back when and they continued to faff around with different arguments before they finally decided that the only way to get people was to "clarify a law" - Are you aware that they opened up enquiries using a whole different argument to the one they are using now.

Yes it was tax avoidance which I might remind you is perfectly legal. A whopping great loophole that was there, was exploited and HMRC spent years thinking of ways to close it.

I very much doubt that most contractors with Ltd Co's paying Salary and Divs haven't pre IR35 anyway taken the piss with that method of extraction. I certainly know some who think a £5k salary is perfectly reasonable and the rest via Divs... are you telling me thats not avoidance?

[Incognito]

Nick, were you at the JR? I'm guessing you weren't and have picked up your interpretation from the BN66 thread. Hardly an objective viewpoint.

In my opinion Padmore is a bit of a red herring in this. Padmore was decided prior to the 1987 Finance Act. The Finance Act in 1987 was introduced to remove tax relief for partnerships controlled abroad previously available under the DT treaty. The MontP schemes etc thought they'd found a way that gets round this. HMRC say they haven't. That's the issue. And as Minestrone said, this is nothing but pure and simple money laundering. It's getting money earned in the UK out of the country and back in without paying tax. It's nothing likeIR35 at all and it pisses me off when people compare the two.

[Incognito]

Perhaps you should read the BN66 thread - yes HMRC say they are clarifying it but the fact is they have taken 7 years or so to clarify it - they knew all about the loophole way back when and they continued to faff around with different arguments before they finally decided that the only way to get people was to "clarify a law" - Are you aware that they opened up enquiries using a whole different argument to the one they are using now.

Yes it was tax avoidance which I might remind you is perfectly legal. A whopping great loophole that was there, was exploited and HMRC spent years thinking of ways to close it.

I very much doubt that most contractors with Ltd Co's paying Salary and Divs haven't pre IR35 anyway taken the piss with that method of extraction. I certainly know some who think a £5k salary is perfectly reasonable and the rest via Divs... are you telling me thats not avoidance?

It's not tax avoidance, it's evasion. And if you do a search on google for "bn66 jr" you see the similar phrase has been searched for 2000 times. that's why it took them so long, as AJ stated you were under the radar until someone got greedy and started signing up more contractors. However from my understanding people were still getting letters several years ago from HMRC advising them the scheme didn't work.