BN66/S58 update

[BolshieBastard]

I've just stated some facts. I would welcome a tax tribunal hearing and have no fear of one.
But given that you're not coming across as the sharpest tool in the box, in that you can't seem to distinguish the markers that differentiate a disguised employee from a legitimate business, I'm not surprised you made the judgement to join a dodgy tax avoidance scheme.
That lack of judgement is evident in some others of your not-so-merry band.
Anyway we should leave it there, this discussion is pointless for me and I've a business to grow.

LOL! So you've no come back about what a 'disguised employee' is. Your whole arguement seems to be nothing more than attempted (notice I said attempted) put downs, belittlement, arrogance and self importance.

Any employee is going to love working for you.

Good luck with your 'hopefully soon' to be advertising for work and an employee.

[AtW]

I don't recall how 75% is achieved through a Ltd Co. Maybe someone else here can explain how this is possible?

Those who could explain are still doing time in HMP Belmarsh

Income shifting to wife is probably the only way it can happen on large billings.

[AtW]

a)Well a contractor who puts himself inside IR35 is doing the same job as one who realises he is outside IR35. Maybe it's the fault of those paying 40%+NI for being so poorly educated on taxation laws?

If they are doing same job then one of them is likely to be wrong - either guy outside of IR35 or guy inside of IR35.

Getting legal advice to clarify where you stand IR35 wise is fine in my book.

Creating and using artificial structures (especially offshore) that defy economic sense purely to reduce tax isn't ok.

If you have to pay %-tage of money going through scheme then it's 99.99999% dodgy abuse of tax laws - it's a really good pointer in my view, as opposed to getting one off legal advice on taxation.

[sasguru]

LOL! So you've no come back about what a 'disguised employee' is. Your whole arguement seems to be nothing more than attempted (notice I said attempted) put downs, belittlement, arrogance and self importance.

Any employee is going to love working for you.

Good luck with your 'hopefully soon' to be advertising for work and an employee.

I put down some of my criteria for disguised employee in a previous post.
I won't have any problem finding an employee because unlike you I have some judgement, so while the person I may hire may be greedy, they won't be stupid AND greedy which is an exceedingly unfortunate combination.

[d000hg]

What the HMRC should really do for contractors who are disguised employees (and that criteria is fairly easy to define IMO: e.g. immediate payment terms, no advertising spend, more than 1 year contracts, single "client" at any time) is offer them a proportional to gross earnings, fixed rate tax free lump sum to compensate for not having sick pay, pension, training and other permie benefits.
And this should be a relatively generous tax-free sum.
All other earnings to be taxed as if you were on permanent salary.
But hey that would be too easy

To be honest, I would agree with you that many (most?) contractors aren't really businesses and that IR35 is a farce. Either you pay a fair bit less tax on the same income as a permie would, or you pay a hell of a lot more. If it weren't for having to pay employer's NI, making everyone pay regular tax+NI would be fairly reasonable IMO.

So how those contractors of yours dodging corporation tax of 20%?

1. Why do you need to dodge the 20% CT rate? You can still net £30k+ at only 20% CT without any personal tax.
2. CT applies only to profit, whereas permies are taxed on salary. You can swing a lot of nice hotels... Mich was on about this recently although that may specific to Holland.

[d000hg]

And just to keep AtW in the loop, from the other thread (which is not to be trolled, trust me):

Whitehouse have worked their magic and the amendment to the Finance Bill has been tabled.

http://www.publications.parliament.u...bc1542504m.pdf

Page 31, NC1 (New Clause 1) tabled by Steve Baker (Conservative).


Abolition of retrospective application of section 58(4) of the Finance Act 2008

NC1

To move the following Clause:—

‘(1) Section 58 of the Finance Act 2008 (UK residents and foreign partnerships) is amended as follows.
(2) In subsection (4), delete “always having had effect” and insert “having effect from 12 March 2008.”.’.

[AtW]

[*]Why do you need to dodge the 20% CT rate? You can still net £30k+ at only 20% CT without any personal tax.[*]CT applies only to profit, whereas permies are taxed on salary. You can swing a lot of nice hotels... Mich was on about this recently although that may specific to Holland.

How can you pay dividends if you don't have profit? The only way is to pay salary in which case PAYE applies.

I am talking here about high rate levels, say Ltd bills £100k, explain to me how exactly it can legally net £75k without income shifting to wife and without inflated expenses.

[normalbloke]

Just not true

"Here's a good summary from Freelance supermarket,,,

.................


The case against BN66 being retrospective
1.
The legislation is not retrospective as it simply ensures that existing legislation is being correctly applied and seeks to ensure that the spirit of the law is upheld"

Wrong. Read Hansard when the original legislation was being debated ('Padmore case'). Parliament closed only one of the three exemptions and explicitly allowed the other two, and suggested that HMRC kept the other two under scrutiny"

2.
Action didn't happen sooner because details of the scheme only came to light in 2004 when new disclosure laws came into force #
Wrong. See above, and it was in HMRC tax manuals and the subject of a technical document issued to Tax offices in 2003 saying there was difficulty challenging the scheme.

"3.
The "loophole" that was being used never actually existed. Therefore there is no need to close it and apply legislation prospectively (i.e. from the date it is passed). The legislation is there and is just being applied correctly."

Wrong on both counts. See above.

"Seems to me they owe from at least 2004"

Nope, should be from 2008 when they closed the loophole. But retrospective legislation currently puts pay to that. Whoever wrote the original article above needs to read Hansard and get all the subsequent facts. Still, never let facts get in the way of a good story eh?

[shaunbhoy]

I so while the person I may hire may be greedy, they won't be stupid AND greedy

I expect you dovetail nicely. They take care of the greed whilst you cover the stupid aspect. A match made in heaven!
But do you really need a wingman when selling the Big Issue?

[d000hg]

How can you pay dividends if you don't have profit? The only way is to pay salary in which case PAYE applies.

I meant you can easily get a few grand off the taxable total i.e. you 'earn' £100k but only get CT on £90k, which is not massive but is a gain.

I am talking here about high rate levels, say Ltd bills £100k, explain to me how exactly it can legally net £75k without income shifting to wife and without inflated expenses.

Not a problem I've had to solve yet. But you can put a big chunk into pension (can't you?) and of course keep it in the company - take your £40k every year then 'retire' at 50 but continue to take £40k salary the next 10-15 years.