BN66; what the hell is going on over there?

[Churchill]

I think the issue is much bigger than this - if HMRC just closes the loophole and thus allow a lot of people get away with paying just 3.5% of tax rather than 30-40%, then this would just encourage lots more people do the same - it's the piss take among tax avoidance (only 0% is lower than quoted number) and I am not suprised HMRC went as far as they could do make example of it.

If HMRC can't be arsed to check their current legislation and leave gaps in their policy then it would be remiss of anyone not to exploit this.

However, if they fix the gaps in their policy then by all means reject any attempts to exploit those gaps from that date onwards.

[chef]

it's hit the BBC news and doesn't focus on the retrospective part of the case which I think is key to many contractors financial well being but more on a Daily Mail slant of 'one more caught, how did he dare expect to get away with it'

[Mich the Tester]

This is partly because some "clever people" end up paying a lot less then others, so taxpayers have to pick the difference -

No it isn’t. It’s because governments spend money before they’ve received it. They make plans based on estimates of how much money they’re going to get next year, then spend a bit more than they think they’re going to get. The estimates are bound to be optimistic, because no government wants to tell people ‘we think next year’s going to be really crap’. A household run on those principles would end up destitute. A sensible government would look at how much money they have in the bank account from the revenues they’ve already received and spend that, and not one extra penny, just as a sensible household would do.

Oh dear I’m having a fit of the Margaret Thatchers here.

[Tarquin Farquhar]

I’ll tell you what’s a pisstake. Governments all over Europe who charge umpty % tax ... and then have the sheer incompetence to run a ‘deficit’.

As I saw it neatly put in one economics text, sovereign governments' debt is normally good because it is secured on their future power of taxation. A chilling phrase: they can spend/waste as much as they want, because they have the power to make us pay for it.

I tend to think that Thomas Jefferson was right when he said that the new USA should not have a national bank, because that would give one government the power to bind its successors. Ostensibly the British parliament can not bind its successor, but if it leaves its successor with a huge debt, the successor is hardly going to find it practicable to refute it.

Hence Brown's escapades, especially the bank bailouts, have saddled our children with relative poverty. I shall encourage them to leave.

Incidentally for all that the bankers have done wrong, ISTM (and I appreciate comments) that the current difference between virtually 0% savings interest and relatively much higher borrowing interest, is due not to some irrational greed on the part of banks, but to the fact that they now owe a lot of money to the government. You can bet that after we have paid through the nose in tax for bailing them out, and paid through the nose for borrowing and anything that depends on it (including most business), when the government is repaid it will not be given back to us, but will be added to the spending pile.

I shiver at the Tories wrong-headedness and incompetence, but (I never thought I would say this) they have got to be better than Labour. This Labour lot are nothing but a super-spending machine. And you are the fuel.

[Iron Condor]

Best close that ISA and stop your pension then.

I'm off to bury my duty free ciggies in the backgarden. If anyone asks the dog did it.

I think the difference between an ISA and a dodgy IOM scheme (or depreciating loans etc) is obvious to 90% of tax payers.


One is a widely practised and accepted form of avoidance.

The others are shady and verging on evasion.

[AtW]

If HMRC can't be arsed to check their current legislation and leave gaps in their policy then it would be remiss of anyone not to exploit this.

I believe it's a responsibility of each taxpayer to ensure they pay correct amount of tax - if you are not sure get an accountant. If he advises you to take some scheme that miraculously reduces tax from 40% to 3.5% then you accept fully the risk that the scheme can be too good to be true.

However, if they fix the gaps in their policy then by all means reject any attempts to exploit those gaps from that date onwards.

Yes, I am sure you'd like that to happen - from HMRC's point of view they are getting tired with this tulip, so the best strategy for them is to introduce element of risk - you use some shady scheme that appears legal now (judge says it wasn't actually), you pay less tax but you carry the risk of having to repay all that money back if your "clever" scheme turns out to be illegal.

I mean ffs, if this scheme really was decreasing taxes to 3.5% from 40%, then you can't expect to take the piss and keep the money at the same time.

In any case it is crazy to actually spend this money (difference between normal tax due) rather than putting them into account just in case scheme is challenged.

[AtW]

No it isn’t. It’s because governments spend money before they’ve received it.

That's common - most companies don't have full cash in hand for spending, they have to do that from cashflow, which is why a lot of them go bust if cashflow stops and there is no credit to cover for it.

In any case this is irrelevant though interesting conversation.

If the effective tax rate paid by users of this scheme was 3.5% (rather than say 35%) instead of expected 40%, then it's complete and total piss take from the very beginning.

[Mich the Tester]

That's common - most companies don't have full cash in hand for spending, they have to do that from cashflow, which is why a lot of them go bust if cashflow stops and there is no credit to cover for it.

In any case this is irrelevant though interesting conversation.

If the effective tax rate paid by users of this scheme was 3.5% (rather than say 35%) instead of expected 40%, then it's complete and total piss take from the very beginning.

A country is not a company. A company was set up for the specific purpose of taking calculated risks to attempt to gain a return on investors’ money. A country was not set up for this purpose and therefore it is absolutely wrong for governments to spend money they do not have.

[AtW]

A country is not a company. A company was set up for the specific purpose of taking calculated risks to attempt to gain a return on investors’ money. A country was not set up for this purpose and therefore it is absolutely wrong for governments to spend money they do not have.

What this has got to do with this BN66 issue?

As far as I am concerned the main question here is whether people in this scheme took the piss: 3.5% tax (if true) sure sounds like it.

There is tax avoidance, there is tax evasion and there is taking the piss - this one seems (on the basis of 3.5% tax figure) to fall into the latter category.

[Mich the Tester]

What this has got to do with this BN66 issue?

Nothing. It's to do with your metaphor for a government acting like a business in borrowing to keep cash flow going, which also had nothing to do with BN66.

A piss-take is a government that spends beyond it’s means.