APNs Imminent - your help needed

[DonkeyRhubarb]

What about HMRC's estimate of 65,000 for the total number of open cases involving marketed tax avoidance schemes (both DOTAS and non-DOTAS)?

Is this a fabrication too?

https://www.gov.uk/government/upload..._avoidance.pdf

"HMRC is currently investigating around 65,000 individuals and small businesses that have used marketed avoidance schemes."

[DotasScandal]

More lies decrypted...this time, the infamous "80% success rate":

80% of cases are won by HMRC? | C3Insight

[Rob79]

What about HMRC's estimate of 65,000 for the total number of open cases involving marketed tax avoidance schemes (both DOTAS and non-DOTAS)?

Is this a fabrication too?

https://www.gov.uk/government/upload..._avoidance.pdf

"HMRC is currently investigating around 65,000 individuals and small businesses that have used marketed avoidance schemes."

I would say that their estimate is on the low side. It depends on how you measure "marketed tax avoidance schemes".

As an example: many marketed tax avoidance schemes are structured as something called a UCIS (Unregulated Collective Investment Scheme). These are commonly used for high risk investments where the "return" is a tax relief. The FSA did a review on how these were sold and concluded that of the 140,000 investors put into these schemes, around 120,000 were the product of bad advice.

Now not all of those would be in HMRC's 65,000 but a good chunk are.

This type of scheme is just one example. Property schemes (EZ's, BPRA's) would probably be another 10,000 or so. Sole traders = 5,000 to 8,000. Share loss schemes perhaps 10,000.

Add in contractor schemes.

I just don't buy 65,000. I think the scale of the problem is much bigger.

[jemb]

I would say that their estimate is on the low side. It depends on how you measure "marketed tax avoidance schemes".

As an example: many marketed tax avoidance schemes are structured as something called a UCIS (Unregulated Collective Investment Scheme). These are commonly used for high risk investments where the "return" is a tax relief. The FSA did a review on how these were sold and concluded that of the 140,000 investors put into these schemes, around 120,000 were the product of bad advice.

Now not all of those would be in HMRC's 65,000 but a good chunk are.

This type of scheme is just one example. Property schemes (EZ's, BPRA's) would probably be another 10,000 or so. Sole traders = 5,000 to 8,000. Share loss schemes perhaps 10,000.

Add in contractor schemes.

I just don't buy 65,000. I think the scale of the problem is much bigger.

Is it not the case that the recent legislation will have driven all the contractor schemes to the wall? They can't still be going surely.

[Rob79]

Is it not the case that the recent legislation will have driven all the contractor schemes to the wall? They can't still be going surely.

Depends again on how you define a "scheme".

Most schemes that rely on a tax break work in one of three ways.

1. Generate a tax relief that is more than the economic cost
2. Generate a receipt that is not taxed
3. Convert income to gains (and then sometimes do a gains planning exercise)

Contractor schemes and all forms of EBT are in category 2. Most of those have been stopped and NOBODY in their right mind would contemplate them at the moment.

We are seeing variations on 3. Imagine, that you contract via a limited company and you take from that company a minimal salary. The company builds cash reserves (probably loaned to you in part but taxed as appropriate). At some point you want to cash in and move on. Liquidate the company and you pay CGT (28% or perhaps 10%) rather than income tax.

Perhaps even better you put the company into a partnership and sell the goodwill (getting a base cost uplift) and you are the other partner who gets a return of capital which is not taxed.

I have seen the latter scheme today.

Does it work? It might if executed properly (and the one I have on my desk was not) but will it survive HMRC enquiry and counteraction? Almost certainly not.

So I think that there are schemes out there still being done but they are becoming increasingly bespoke.

[regron]

So I think that there are schemes out there still being done but they are becoming increasingly bespoke.

I can confirm these schemes are going on in a different capacity, as there are contractors I know who are still working through them. Personally, I got out when all this kicked off, but still have the COP8 and APN c**p hanging over me for the years I was involved.

Even though I have shared with them all the information I've collated on this subject, they still seem to shrug it off and say they will deal with it when it happens, even though they have COP8's and the SO letter through their doors.

Pure b*lls or stupidity.....you decide !