BN66/S58 update

[AtW]

Given other stuff/cases that have gone on, not sure it needs this case to set that precedent.

It would set a massive bad precendent for the Govt - having "plebs" spend very little on lobbysts to actually REVERSE Govt decisions?

Before you know everybody would be doing it, to hell with the manifestos and this voting malarkey

9 out of 10 this amendment will be declined by the committee (sp?) - decisions from court cases will be used.

[centurian]

But I'm starting to believe this tulip goes on all the time.

Whitehouse aint flying by the seat of their pants here - this has the makings of a well-oiled machine doing something they have done many times before.

[AtW]

Whitehouse aint flying by the seat of their pants here - this has the makings of a well-oiled machine doing something they have done many times before.

Yes, it's very well oiled to bring it up to vote. That's where they wash their hands.

I can't see it happening because:

1) court cases were conclusive - there is no legal need for Govt to change anything

2) tax burden increased, benefits got cut - letting off tax cheats who paid 3.5% income tax is not politically sound, the fact that they'd go bankrupt is irrelevant since Govt is making lots of people bankrupt/lose homes with spending cuts

3) from what I understand amount of money spent on lobbying isn't that massive to buy decision (if that's possible at all)

4) there is no real PUBLIC pressure from LARGE firms on this particular case

There is still a chance it would go through - it's pretty clever drafting in that such change would only apply from the date it was announced.

[AtW]

In fact I think the odds are 9 to 1 for BN66 crowd.

They will almost certainly win on that hearing.

Why?

Because tax cheating is evil and evil will always triumph because good is dumb.

This makes me glum.

[VectraMan]

You might be feeling smug at the moment. But wait until the govt. tighten the IR35 screws even tighter and every single contractor is "caught". They will probably decide to apply the rules retrospectively too, because our case has set a very important precedent. Then you might not be feeling so clever.

Outside IR35 still means you've paid roughly the same amount of tax as the average person thinks they pay in income tax. And there's nothing artificial about operating as a Ltd. company and paying dividends. It's a completely different scenario.

But you might be right.

[DonkeyRhubarb]

AtW,

There are tons of other avoidance schemes out there, so why does our case bug you so much?

There were 2,000 users of the bn66 scheme but, according to NAO, an estimated 20,000 contractors have used ebt/loans. Just look at all the threads that have sprung up here recently:
HMRC Scheme Enquiries

The ebt/loans are just as "aggressive and artificial" - the tax rate is also less than 5%. The NAO estimate the tax loss from ebt/loans as £2.3Bn vs our £200M.

There has been no retro law for ebt/loans. HMRC are litigating against the schemes, which is all we are asking for. (The Huitson case did not consider the legality of the scheme, only the validity of the retrospective legislation.)

We would be quite happy for the scheme to be tested in court under the law as it stood prior to bn66. If HMRC are right, and the scheme never worked, then they don't need bn66 to clobber us.

Regards
DR

[Old Hack]

I don't see why there's an issue against people who have done this, to be honest, for we are all, well most of us, continually trying to reduce our tax burden. If people have done it better than me, then I doff my cap. At stake here is the ability to retrospectively change the laws. If something is legal, it's legal. All of the people stating it's your own fault, well, be careful what comes home to roost, as I think it's a bit thin edge of the wedgey.

I have made no allowance that I have sat outside of IR35 other than get my accountant to check what I am doing and advise me every year. What happens if (some might say when), the government decide all one man IT bands are inside IR35 and have always been? What happens when you are made to pay tax on 95% of all your earnings for the past 6 years? That's a shed load of money, I mean £250k-£500k that suddenly someone will take from you. If you look at Public sector roles now, they have a caveat that you have to sign and state that you are paying the correct amount of NI and income tax. Well, how is that defined? Will they come after us now for the past 6 years saying it's obvious we haven't.

I am bloody happy they're making a stand.

[DonkeyRhubarb]

Just to be clear what NTRT are asking for.

1) We are not asking to be let off.
2) We are asking for the retrospective element to be removed.
3) HMRC can then take us to court under the law as it stood prior to BN66.
4) If the scheme is found to be unlawful under the original law then so be it. Those who will be bankrupted will have to take it on the chin.

[BolshieBastard]

Not sure if you are saying those not affected are relishing the schadenfreude, but you sailed close to the wind and got caught out - I recall looking into those schemes when they were being touted but (fortunately) declining as they did appear a step too far

Er sorry no that's not correct.

People are confusing the here and now with the position back in 2001 when I joined the scheme. The scheme was legal in 2001. In fact, it was 'legal' until 2008 when a piece of legislation was introduced, backdated to 1987 (IIRC) changing the interpretation of the law.

Then, what we 'did' became illegal. Please tell me how are you supposed to make informed decisions on something legal which is then made illegal 7 or 8 years later?

Twats like atw can harp on all he wants about the 'morality' of these schemes. (I want to know what someone who isnt a contractor is doing on this site). The fact of the matte is, whatever he's doing legally now, could, under a future Government be determined to be tax 'evasion' or 'aggressive tax avoidance' and changed retrospectively.

Let's say a far left Government is formed and decides the intention of company taxation was that SME companies with 10 employees and directors drawing dividends should really have paid a 90% tax rate instead of the 40% they did pay.

The then Government then backdate their new stance on tax to 8 years prior making what our legal director did now illegal. Yeah, nothing wrong there, is there?

Coming back to the present and BN66, the Government didnt prove the scheme didnt work. It never has. its agent, hmrc, never tested the scheme in the courts until it had had the legislation changed.

[moira under the stairs]

Er sorry no that's not correct.

People are confusing the here and now with the position back in 2001 when I joined the scheme. The scheme was legal in 2001. In fact, it was 'legal' until 2008 when a piece of legislation was introduced, backdated to 1987 (IIRC) changing the interpretation of the law.

Then, what we 'did' became illegal. Please tell me how are you supposed to make informed decisions on something legal which is then made illegal 7 or 8 years later?

Twats like atw can harp on all he wants about the 'morality' of these schemes. (I want to know what someone who isnt a contractor is doing on this site). The fact of the matte is, whatever he's doing legally now, could, under a future Government be determined to be tax 'evasion' or 'aggressive tax avoidance' and changed retrospectively.

Let's say a far left Government is formed and decides the intention of company taxation was that SME companies with 10 employees and directors drawing dividends should really have paid a 90% tax rate instead of the 40% they did pay.

The then Government then backdate their new stance on tax to 8 years prior making what our legal director did now illegal. Yeah, nothing wrong there, is there?

Coming back to the present and BN66, the Government didnt prove the scheme didnt work. It never has. its agent, hmrc, never tested the scheme in the courts until it had had the legislation changed.

Agree BB... Putting the green eyed monster aside for a second...I find it astonishing that people take time out to write such dribble without first looking at all the 'FACTS'.... Government don't make mistakes !!!! No ? Just look at IR35 something close to all true Contractors, the evil legislation that led/forced the non-sheep like into various Tax Planning arrangements.

Back in the conception stage of IR35 the Government were warned by the CBI that it would not work but heyho look where we are today... a piece of legislation that doesn't work...

Then the Government ‘Cheat’ by using retrospective legislation to change something that was deemed to be legal…. Was it legal? Then why change the law? If this is allowed to be passed then we will never know… exactly what HMRC are relying on.

Now tell me who the real cheats are?

Lets use another simple TAX Avoidance scheme... ISA's... how many people are using this scheme ? what if the government now decided to use retrospective legislation to make you pay Tax on the interest earned from when your ISA started and you have to pay interest on the Tax that is now deemed owed?