Judicial Review of APN has been requested ...

[Zero Liability]

Why not? HMRC have unfinished business with contractor Ltds - a means of avoiding NICs in their view - so new NIC legislation backed up with APNs?

Or something much subtler like, say... the FLC.

[Vegas]

Why not? HMRC have unfinished business with contractor Ltds - a means of avoiding NICs in their view - so new NIC legislation backed up with APNs?

That would be plain nasty.

I think there's something to be said for winding down your Ltd company every 2-3 years and forming a new one to reduce the risk of these sort of things.

[jbryce]

That would be plain nasty.

I think there's something to be said for winding down your Ltd company every 2-3 years and forming a new one to reduce the risk of these sort of things.

Nasty? HMRC? No!

In the mad and bad world of HMRC I'm not sure how closing your company would protect you from anything. The reason Ltds are safe, probably, for the moment is that HMRC haven't found a cost effective away of challenging us. Law isn't the problem, they can change that.
Face it, Ltd targeted-APNs would make the cost argument a look a lot better from where they are standing.....

[Zero Liability]

Their main problem is that the law is currently against them, and it will be a while before they can change that, if at all. I think they are moving in another direction, anyway, as mentioned above.

That would be plain nasty.

I think there's something to be said for winding down your Ltd company every 2-3 years and forming a new one to reduce the risk of these sort of things.

That can also lead to trouble, though.

[DonkeyRhubarb]

There is no reason, in theory, why APNs couldn't be extended to any dispute between HMRC and a taxpayer.

If HMRC queried your tax returns you'd have to pay upfront what they believe you'd underpaid, and you'd only get it back at the end of the dispute if it's decided in your favour. They could even apply it (retrospectively) to previous tax years.

Perhaps I should delete this post just in case they get any ideas.

[jamesbrown]

There is no reason, in theory, why APNs couldn't be extended to any dispute between HMRC and a taxpayer.

If HMRC queried your tax returns you'd have to pay upfront what they believe you'd underpaid, and you'd only get it back at the end of the dispute if it's decided in your favour. They could even apply it (retrospectively) to previous tax years.

Perhaps I should delete this post just in case they get any ideas.

The two fundamental problems I see with this "slippery slope" argument are: 1) there's a gulf between contrived tax-avoidance schemes and operating a Ltd company without tax planning as a primary objective; by definition these schemes had no commercial justification and were set-up purely to avoid tax; and 2) there's a very large number of small businesses in the UK (PSCs, FLCs, call them what you like), and this would not play well in terms of the anti-business rhetoric and, more simply (and perhaps more concretely), in terms of numbers of voters. Unfortunately (for scheme users), convoluted avoidance schemes are a fairly discrete and manageable "wrong" from the perspective of HMG and many voters.

[jbryce]

The two fundamental problems I see with this "slippery slope" argument are: 1) there's a gulf between contrived tax-avoidance schemes and operating a Ltd company without tax planning as a primary objective; by definition these schemes had no commercial justification and were set-up purely to avoid tax; and 2) there's a very large number of small businesses in the UK (PSCs, FLCs, call them what you like), and this would not play well in terms of the anti-business rhetoric and, more simply (and perhaps more concretely), in terms of numbers of voters. Unfortunately (for scheme users), convoluted avoidance schemes are a fairly discrete and manageable "wrong" from the perspective of HMG and many voters.

Well IR35 was a, failed, attempt to manage contractors away from a Ltd company. If you look at the furore surrounding consultants in the NHS and the BBC you can quite easily see HMRC and HMG campaigning against 'highly paid consultants who don't pay the correct amount of NICs, blah blah blah'. For example a daily mail rant here. Hodge the dodge has already suggested that PSCs should be banned from government work and consultants should pay full PAYE.

I hate to state the bleeding obvious, but in the main we have a Ltd company to minimise the liability for NICs and to reap the benefits of dividends. If you go through a legit Umbrella company you will pay more in tax and can still function as a contractor. Don't for a second think that HMRC are not aware that there is an opportunity here to gain more in tax and NICs - if they can find a way of forcing us into PAYE or into Umbrella companies they will.

[Zero Liability]

Hopefully they will suffer a defeat in this instance, as regardless of how easily they could transpose this principle to other instances of tax planning, it is still too much power for such an incompetent, deceitful body to wield. Plus, the element of retrospection in many of these cases simply makes it all the more unjust. However, I agree, they're going to have to resort to more underhanded means to "tackle" ltd co contractors, and I think this will be a combination of the agency reporting requirements and the FLC, if they get one of the political parties to do their dirty work. Thus they avoid all the complications of being dragged through courts in years of complex legal disputes and accomplish what they want. Of course, it all hinges on the FLC - i.e. the PSC - going anywhere, which it might not.

[Vegas]

Nasty? HMRC? No!

In the mad and bad world of HMRC I'm not sure how closing your company would protect you from anything. The reason Ltds are safe, probably, for the moment is that HMRC haven't found a cost effective away of challenging us. Law isn't the problem, they can change that.
Face it, Ltd targeted-APNs would make the cost argument a look a lot better from where they are standing.....

I just can't see this happening. It's too big a step.

[jbryce]

I just can't see this happening. It's too big a step.

What was IR35? Rubbish legislation - yes, but a statement of intent.
As soon as HMRC work out how to efficiently separate us contractors from the rest, they will go after us. It's an easy sell to the public and why not? It'll pay for a few more hospital beds.

Too big a step? mmmm well I'm taking the chance that it is. But really, most of us try to look like a small business to continue to receive the breaks (NICs Dividends) that it confers. To pretend otherwise is naive.

Those who wish to go to tax heaven will use an Umbrella and subject themselves to full PAYE.