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

[DotasScandal]

Not really sure what you're getting at ?

What he's getting at is that when you're up against someone who has a time machine, absolutely anything can be done to you retrospectively.

[flamel]

See webberg's post

Just listening to radio 5 live and Ed Ballsis promising that if Labour get in they will give more power to HMRC in relation to tax avoidance. So how much further can they go?

Off the top of my head:

1. Ability to raid bank accounts/sell assets
2. Ability to force contractors to deduct tax (like the construction industry several decades ago)
3. Refusal of expenses claims
4. Force information from contractors as to who was paid what
5. Prevent any contractor from having an EBT or share scheme or access to any tax planning
6. Introduce a system of pre approval or blocking
7. Impose a minimum effective rate of tax for all
8. Introduce a pre FTT tribunal that HMRC control and operate
9. Introduce the long promised "anti Ltd" rules
10. More retrospective rules
I'm sure this is not a comprehensive list.

I'm not sure any contractor can rest easy until this lot lands somewhere

[webberg]

See webberg's post

I'm not sure any contractor can rest easy until this lot lands somewhere

Not just contractors. Just about any scheme with tax incentives is being dragged into the mire.

Enterprise Zones - finished in 2008/9 or so. I'm looking at 4 schemes HMRC allege, 8 years after the event, are tax avoidance.

BPRA - looking at 3 schemes, none less than 4 years old.

Film schemes - looking at perhaps a dozen, most 10 years +

Cash extraction schemes, phantom contracts schemes, missing PAYE operators, dual contracts, share schemes, all waiting in the wings.

The real scary one is pensions "REFORM".

You have people who can now draw their entire pension and use it as they wish. Anything over 25% of the pot is taxable income. Gideon is relying on lots of people paying tax on this so that he can cover cheques he's already written. These pensioners are going to be ripped off. they will get hammered by the discount applied by the insurance companies, fees from advisers, the tax bill (assuming they've been told it exists), etc.

I guarantee that in 5 years time the "pensions mis-selling scandal" will be everywhere.

Unfortunately, people see that big lump of cash, think that they've earned it and should be able to enjoy it, assume that as a pension its not "really" taxable. Greed or need kicks in with the selective deafness to wiser heads and Robert is your mother's brother.

Not only will advisers make more fees sorting out the pensions scandal in 5 years time, but all of us still working will have a higher welfare bill as the pension money disappears.

[dangerouswhensober]

The real scary one is pensions "REFORM".

You have people who can now draw their entire pension and use it as they wish. Anything over 25% of the pot is taxable income. Gideon is relying on lots of people paying tax on this so that he can cover cheques he's already written. These pensioners are going to be ripped off. they will get hammered by the discount applied by the insurance companies, fees from advisers, the tax bill (assuming they've been told it exists), etc.

I guarantee that in 5 years time the "pensions mis-selling scandal" will be everywhere.

I absolutely agree with that sentiment Webburg - and, it also occurs to me that there is one other hidden motive for this Government move to allow pensions to be unlocked. Before this, moves by HMRC to recover money from debtors (e.g. bankruptcy) could not include the debtors' pension funds, because these were (mostly) locked in. With the new legislation, pension funds become fair game for HMRC to seek to recover from debtors - just another asset to be liquidated ...

BTW - Thanks for all your valuable advice over the past few months :-)

[DonkeyRhubarb]

I think the Government are secretly happy for people to blow their pensions now if it brings in some extra tax and the spending boosts the economy.

Everything these days seems to be about kicking the proverbial can up the road.

[flamel]

Before this, moves by HMRC to recover money from debtors (e.g. bankruptcy) could not include the debtors' pension funds, because these were (mostly) locked in. With the new legislation, pension funds become fair game for HMRC to seek to recover from debtors - just another asset to be liquidated ...

Although I'm worried about this, after Raithatha v Williamson, this has yet to be fully decided in court other than in a situation where someone wilfully tried to avoid their creditors by chucking a huge lump of cash into their pension fund.
It used to be the case that if a bankruptcy order is made all pension schemes that have been approved by HM Revenue and Customs remain outside a bankrupt's estate (i.e. most pension schemes by High St providers). This means they cannot be claimed by the trustee in bankruptcy following the introduction of the Welfare Reform and Pensions Act 1999.

However, if you able to elect to drawdown then the court may force you to do this, taking reasonable family living expenses into consideration.

The decision in Raithatha v Williamson, where the bankruptcy trustee gained the right to claim against Michael Roy Williamson’s £1m pension fund to repay creditors has, effectively been clouded.
High Court decision leaves pension bankruptcy rules in limbo - FTAdviser.com

No doubt our dear friends at HMRC will try to get at entire pension funds in the future but this is by no means certain at this time.
As ever, get professional advice on this one, before the wolves knock on the door.