Using a scheme (Non DOTAS) in the last 1-2 years - Help needed to rectify

[DonkeyRhubarb]

With no incentive to reach a settlement this is the only sensible course of action.

I can fully understand why some people choose to settle. Around 500 of the 2,500 in our scheme have done so.

Closure/finality/moving on with your life. Everyone wants that.

However, settling and paying up in full is a high price to pay merely on the basis that HMRC say a scheme doesn't work. (As if they would ever say anything else!)

At the end of the day it comes down to individual choice, and we should respect whatever people decide.

[MrO666]

[QUOTE=MercladUK;2078694]

oh dear me.....

Why are you posting in these forums if A, you have settled and B, you post crap like this?

Appreciate you have paid and are settled, now please do the honourable thing and post in general

With all due respect, I'd suggest that you go and read my previous 200+ posts over the past couple of years before declaring that i'm talking 'crap'.

I was very anti paying anything to anybody for a long time, insisting that I was going to fight it all the way. Since the start i've probably sought out more professional tax and legal advice than many people on this forum (obviously not all), and the overwhelming stance of more or less all of these people was that yes, you probably do have a case, yes you may potentially beat HMRC at a FTT, but then don't expect HMRC to just accept it, back down and say fair enough, you win. HMRC have far too much to loose by accepting that ANY tax avoidance case was legitimate, hence they will do everything within their power (including going to the high court) to stop that happening. At the very end of it there is always the chance that HMRC will fail against your/any scheme, but by then you will more than likely be bankrupt anyway, so who wins then......certainly not the individual.

This is why I decided to sit down with HMRC and sort it out. By my own experience a tax specialist is circa £100 per hour, and a Barrister is a between £2 - £3k per day. HMRC are experts are dragging things out, so it won't take long before you've spent an absolute fortune on legal fees, and still probably only a 1 in 10 chance of winning (if that).

I'm not a rich man and it was fairly painful to have to pay up, but two more years of contracting will make things OK again, and I don't have to worry anymore.

I do still standby what I said though, whether somebody agrees or not it's fact, the individuals involved all took home between 80 and 85% of contract value. Anyone (including me) who thought that was 100% untouchable was (or in some cases still is) naive. If it were that easy and watertight, why wouldn't every UK employee be doing it. I was sucked in like the rest of us, but i'm realistic enough to accept that I always knew there was a bit of a risk to it.

So to the original point, I'd appreciate it if you would take the time to actually read through the history of peoples posts before jumping in and having a go at people when you've been a member for a week. Believe it or not, some people on here clearly do know far more than you about the situation at hand, so perhaps take advantage of that knowledge instead of throwing insults around and telling people where they should post.

[webberg]

I partially agree with webberg but no we CANNOT be punished for legal avoidance.

We will know in due course but it is definitely not a slam dunk for HMRC and thus giving it a go is definitely worth it against settlement.

My final public statement on this particular issue.

There is no such thing as LEGAL avoidance. If there is avoidance of tax (hard enough to define) a judge will decide if the way it was done fits the tax rules or not. If he prefers the HMRC interpretation, you will have to pay the tax. No suggestion that what you did was illegal, just ineffective.

Define "punish"?

Does that mean pay the tax you avoided?

Does it mean pay interest on that tax?

Does it mean pay a penalty for your behaviour that led to avoiding tax?

Does it mean any combination or all of these?

It's subjective, personal and relative.

Mixing objective actions (effective/ineffective) with subjective reactions is never going to produce a logic result.

Settling v resisting - again subjective. So many factors in play here and only individuals can decide. "Experts" can give their opinion but it's not their decision.

I've said before that groups in this situation tend to split as to around a third who settle in some form, 10% who fight regardless, often beyond a reasonable line and the balance who put their head in the sand. It's that 60% or so who hold the key.

Mobile them one way or the other and you have a better chance of achieving a "good" settlement or a "win" at Court.

One thing is certain - this is a personal choice and you must make it for reasons that make sense to you, not somebody else.

[Andre64]

Question

[QUOTE=MrO666;2078998]

With all due respect, I'd suggest that you go and read my previous 200+ posts over the past couple of years before declaring that i'm talking 'crap'.

I was very anti paying anything to anybody for a long time, insisting that I was going to fight it all the way. Since the start i've probably sought out more professional tax and legal advice than many people on this forum (obviously not all), and the overwhelming stance of more or less all of these people was that yes, you probably do have a case, yes you may potentially beat HMRC at a FTT, but then don't expect HMRC to just accept it, back down and say fair enough, you win. HMRC have far too much to loose by accepting that ANY tax avoidance case was legitimate, hence they will do everything within their power (including going to the high court) to stop that happening. At the very end of it there is always the chance that HMRC will fail against your/any scheme, but by then you will more than likely be bankrupt anyway, so who wins then......certainly not the individual.

This is why I decided to sit down with HMRC and sort it out. By my own experience a tax specialist is circa £100 per hour, and a Barrister is a between £2 - £3k per day. HMRC are experts are dragging things out, so it won't take long before you've spent an absolute fortune on legal fees, and still probably only a 1 in 10 chance of winning (if that).

I'm not a rich man and it was fairly painful to have to pay up, but two more years of contracting will make things OK again, and I don't have to worry anymore.

I do still standby what I said though, whether somebody agrees or not it's fact, the individuals involved all took home between 80 and 85% of contract value. Anyone (including me) who thought that was 100% untouchable was (or in some cases still is) naive. If it were that easy and watertight, why wouldn't every UK employee be doing it. I was sucked in like the rest of us, but i'm realistic enough to accept that I always knew there was a bit of a risk to it.

So to the original point, I'd appreciate it if you would take the time to actually read through the history of peoples posts before jumping in and having a go at people when you've been a member for a week. Believe it or not, some people on here clearly do know far more than you about the situation at hand, so perhaps take advantage of that knowledge instead of throwing insults around and telling people where they should post.

A quick question, when you settled with HMRC did they add any additional penalties besides penalty interest? Cheers

[StrengthInNumbers]

For all including Mr0666
1) what is take home percentage with a limited company

2) a couple fought all the way to House of Lords in 2006/7 against HMRC. Even when HMRC won in lower courts. And because of their fight today many couples run limited companies. What would the world be if no one stood against what is wrong because opponent has deep pockets?

[webberg]

For all including Mr0666
1) what is take home percentage with a limited company

2) a couple fought all the way to House of Lords in 2006/7 against HMRC. Even when HMRC won in lower courts. And because of their fight today many couples run limited companies. What would the world be if no one stood against what is wrong because opponent has deep pockets?

Jones v Garnett (Arctic Systems) did indeed win and HMRC promised to reverse it in legislation and have not done so. For now at least the use of a limited company to reduce effective rate of tax (and NIC) is fine.

There are a lot of rules about how money left in the company should be taxed when extracted, but space is too short here to even summarise those.

The Jones' were supported in their case by the PCG (and others). Without that support, going to the House of Lords would perhaps have been beyond them.

So they had deep pockets to draw upon.

Look at the forum here. Divided by provider. That is for some good reasons but to form a fund and bring together the 100's needed to fund a fight, needs everybody to work together. That has been tried on things like JR for APN and there is NO INTEREST.

Unless that happens HMRC will pick off the weakest and once they have a win and a precedent, goodnight.

It needs an NTRT type campaign.

Volunteers?

[StrengthInNumbers]

Have already been done. Get in touch with Saleos and you will know. I don't know what to say and how much to say and thus am staying quite on details. Together we will have deep pockets as well

[webberg]

Have already been done. Get in touch with Saleos and you will know. I don't know what to say and how much to say and thus am staying quite on details. Together we will have deep pockets as well

I wish you luck.

I suggest that if the plan is to have a Court hearing on general principles then a bit of advertising might get you more members?

[Iliketax]

Jones v Garnett (Arctic Systems) did indeed win and HMRC promised to reverse it in legislation and have not done so. For now at least the use of a limited company to reduce effective rate of tax (and NIC) is fine.

There are a lot of rules about how money left in the company should be taxed when extracted, but space is too short here to even summarise those.

The Jones' were supported in their case by the PCG (and others). Without that support, going to the House of Lords would perhaps have been beyond them.

So they had deep pockets to draw upon.

Look at the forum here. Divided by provider. That is for some good reasons but to form a fund and bring together the 100's needed to fund a fight, needs everybody to work together. That has been tried on things like JR for APN and there is NO INTEREST.

Unless that happens HMRC will pick off the weakest and once they have a win and a precedent, goodnight.

It needs an NTRT type campaign.

Volunteers?

I see things as a bit like the prisoners' dilemma:

- Settle with HMRC quickly: low cost
- Settle once a formal opportunity comes in: sometimes can be better (some EBT settlement opportunity situations) or worse - but you don't know unless you wait and there might not actually be one that fits
- Go to court: can be significantly worse (tax, tax on more than your 'economic' profit, interest, your costs, HMRC's costs) or significantly better (you win). An example of the hugely worse would be the film schemes if HMRC keep winning.

As with a prisoners' dilemma what you think other people will do affects you. If you choose to go to court and share the costs with lots of others in the same position then the upfront costs of going to court are much less and you get a chance of paying no extra tax. If you choose to settle then that might be better for you personally (less expense than the worst case, you can afford it, much less mental energy needed to deal with it all) but that would be worse for those that want to go to court as there are fewer people to share the costs. And so those who want to go to court then have to do their best in persuading people who want to settle, not to. And then there are professional adviser who have an interest in going to court because it's interesting, gets them fees, etc.

In terms of grouping together to get an injunction before a JR then that is not my area. But personally it seems like there is a good chance you will be throwing money away. If you have a genuine hardship (i.e. supported by evidence) then wouldn't it be best to discuss a payment plan with HMRC? If you go down the injunction route then my understanding is that the 5% APN penalty regime just continues to apply unless you win at the full JR hearing (or at the FTT/UTT/CoA/SC). But the full hearing will take a while so it will be too late to pay before the penalty date. While there might be some magic you can do with CTDs, I'm not clear whether they help here (not saying they don't though). And there is always a chance that your attempt at getting an injunction against HMRC will fail (as has been the case).

And Jones v Garnett brings back memories of interest and of complete and utter boredom - I went to the RCJ to watch it for a while at a time when nothing of the slightest interest was being discussed.

[StrengthInNumbers]

No. Plan is hearing on specific schemes which Saleos knows inside out and have been involved from start.