BN66/S58 update

[AtW]

You don't seem to understand that there is a higher principle at stake here.

Indeed.

This principle is - tax cheats should not get away with it.

[DonkeyRhubarb]

Indeed.

This principle is - tax cheats should not get away with it.

The ends justify the means. However, why stop at tax for ex post facto laws?

Ex post facto law - Wikipedia, the free encyclopedia

[Doggy Styles]

Indeed.

This principle is - tax cheats should not get away with it.

The fact is, they didn't cheat.

Sorry AtW but you are absolutely wrong, and insist on continuing to be wrong in the face of the facts.

[DonkeyRhubarb]

I joined the Montpelier scheme in May 2001, one month after IR35 came in. In hindsight, it was a kneejerk reaction.

I left in 2003 when the IR35 landscape became a lot clearer.

If I had my time again I would still do everything to mitigate tax. Either by just carrying on with my Ltd Co or joining an umbrella and stuffing as much as I could into a pension.

What surprises me is that BN66 seems to have had little deterrent effect. According to a recent NAO report, an estimated 20,000 contractors have used EBT/loan schemes in recent years. If anything they seem to have accelerated post-2008. There are a whole bunch of threads on CUK regarding these various schemes and ongoing enquiries:
HMRC Scheme Enquiries

In this age of austerity the attitude to tax avoidance is a lot different than when I joined the Montpelier scheme 12 years ago. I wouldn't touch a scheme with a bargepole now and it amazes me that tens of thousands of contractors are still prepared to risk using them.

[centurian]

I wouldn't touch a scheme with a bargepole now and it amazes me that tens of thousands of contractors are still prepared to risk using them.

Because they are "approved by QC"

However while yourself would steer clear of such schemes now, I recall a few of your fellow BN66-ers were discussing/lapping up the PR blurb from a new scheme - roughly 6-12 months back.

Being caught out by the PR guff of the schemes once is could be considered unlucky/unfortunate. Going headlong into another scheme after having been so badly burned... the words "fool", "money" and "parted" spring to mind.

[DonkeyRhubarb]

Because they are "approved by QC"

However while yourself would steer clear of such schemes now, I recall a few of your fellow BN66-ers were discussing/lapping up the PR blurb from a new scheme - roughly 6-12 months back.

Being caught out by the PR guff of the schemes once is could be considered unlucky/unfortunate. Going headlong into another scheme after having been so badly burned... the words "fool", "money" and "parted" spring to mind.

It is true a number of people transferred from the DTA/BN66 scheme to ebt loans in 2008. Many I've spoken to saw it as the only way they could put money aside to try and cover their BN66 liability. A few did it just to stick 2 fingers up at HMRC/New Labour for introducing retro.

I don't think you'll find many BN66-ers in schemes now. Most have gone back to Ltd to avoid tax.

[AtW]

The fact is, they didn't cheat. Sorry AtW but you are absolutely wrong, and insist on continuing to be wrong in the face of the facts.

Of course they did cheat - they paid 3.5% income tax when everybody else in same position (without offshore arrangement) was paying 40%+NICs! Read a fooking definition on what "cheating" is - Cheating - Wikipedia, the free encyclopedia -

"Cheating refers to an immoral way of achieving a goal. It is generally used for the breaking of rules to gain unfair advantage in a competitive situation. Cheating is the getting of reward for ability by dishonest means"

What BN66 crowd did was in my view totally immoral and totally dishonest - not the things they give a tulip about.

Now whether this was illegal tax evasion or legal tax avoidance or just incorrect interpretation of the law was another matter that got settled in courts.

This isn't even "accidental" cheat - it was very deliberate artificial scheme that people willfully entered into with the main objective to massively reduce their tax. Tax evasion laws should cover such cases and long jail sentences should be dished out not just to users of the schemes but also to those who create and market them.

Taxation levels are high in this country, however those who don't like it should fook off somewhere else and earn money there. But if they want to earn money here then they should be paying all taxes that vast majority of honest taxpayers pay.

What would have happenned to BN66 crowd if they tried this tulip in Germany??? Or USA??? I reckon they would not have enough money for a one way ticket back to UK after prosecution is done with them there.

[AtW]

The ends justify the means. However, why stop at tax for ex post facto laws?

I don't think it's necessary to use retro laws, even though I think it's good idea for the Govt to have such option - cheats should never be 100% certain that their "clever" scheme would work.

What should instead happen is that tax evasion is redefined to actually mean something and lead to criminal prosecutions of users and makers of artificial schemes whose sole purpose is to fook the taxpayer.

Companies and people should focus on increasing their earnings/revenues, that should be the only valid way of getting more money into pockets - not reduction of tax that everybody else pays.

[TestMangler]

Because they are "approved by QC"

However while yourself would steer clear of such schemes now, I recall a few of your fellow BN66-ers were discussing/lapping up the PR blurb from a new scheme - roughly 6-12 months back.

Being caught out by the PR guff of the schemes once is could be considered unlucky/unfortunate. Going headlong into another scheme after having been so badly burned... the words "fool", "money" and "parted" spring to mind.

^^ This, unfortunately. I'm currently working with an experienced contractor who is with Bedouin. On the long drives down to Halalifax, I've tried to talk him out of it, but, he's had his head filled with crap from the agent, like 'QC Approved' 'no risk' etc etc.

Look at the number of contractors still out there who don't know anything about IR35 etc and simply believe anything an agent tells them cause "They're professionals, innit ?". They also say things like, "I've been using them for 4 months and never had a problem".

Never underestimate the extend of someone's gullibility !!

[VectraMan]

Never underestimate the extend of someone's gullibility !!

It's not gullibility, it's selectively hearing what they want to hear. I don't believe anyone paying 3.5% tax via a wholly artificial tax-avoidance scheme wasn't fully aware how risky it was, they just constructed a justification in their heads that ignored the obvious truth. These people aren't victims.

The moral case doesn't matter much anyway. The High Court have said the retrospective measures are legal, the public would clearly be on the side of anti-avoidance, and with the state of the government finances it would be a big scandal if Osbourne were to let this go. Paying some unheard of MPs to support you isn't going to help. It might be better to just pay up and accept your gamble went south.