2019 tax charge - consultation preparation

[Old Greg]

I know exactly why that is - because government needs money, so it's performing simple money grab from people who look like easy target. Let's just hope that in a few years the other group will not become target of some more "legal retroactive, not retrospective, law", when more money will be needed. After all, directors of LTDs are all known and disclosed to HMRC, same as people using DoTAS schemes were for many long years, before HMRC decided to make their move.

I'm comfortable with that risk.

[Old Greg]

Like saying but the items I stole from the shop were only low value so the crime is different.

The tax take is either 100% of what it should be or it isn't, or are you saying it is ok to pretend to be in business when you clearly aren't with the sole intention of reducing tax? Not aimed at you specifically as no idea on your personal circumstances but head over to other areas of this very website to see the reality of contracting, reality is most are just disguised employees and should be going via an umbrella or paying PAYE on all they earn. There are some exceptions and you may be one but the whole thing is a joke.

Do you mean 90% or most?

[SomeDude]

I'm comfortable with that risk.

Good for you, thousand of people were also quite comfortable for years, when they were being assured by tax professionals, that there is no risk.

[Dylan]

If you are inside IR35 but declaring yourself outside that is also wrong, as will be discovered if HMRC get hold of you. But I wouldn't say there is no difference. I would be interested in your evidence for the 90% statistic you offer.

I wish I had a study to back it up but based upon the contractors I have met in 20 odd years of corporate IT and the posts in this place along with the job postings for contractors which are more often than not permie positions they are unable to fill or have had to move from Op Ex to Cap Ex for budget reasons.

[Old Greg]

Good for you, thousand of people were also quite comfortable for years, when they were assured by tax professionals, that there is no risk.

Were these independent tax professionals or scheme promoters and their hired help?

[AtW]

Like saying but the items I stole from the shop were only low value so the crime is different.

You are using wrong analogy. There is no crime in running Ltds - it's the intention of Parliament that dividends from business (which pays corp tax!) do not have NICs.

The tax take is either 100% of what it should be or it isn't, or are you saying it is ok to pretend to be in business when you clearly aren't with the sole intention of reducing tax? Not aimed at you specifically as no idea on your personal circumstances but head over to other areas of this very website to see the reality of contracting, reality is most are just disguised employees and should be going via an umbrella or paying PAYE on all they earn. There are some exceptions and you may be one but the whole thing is a joke.

The joke is when some people think they can pay 3.5% tax rate when others pay 40% on same earnings and get away with it.

80% tax take for Ltds is my estimate compared with theoretical 100% IF the person was fully on PAYE. People become contractors to make more money, that's the intention for most, there is no other good structure than Ltds.

[Old Greg]

I wish I had a study to back it up but based upon the contractors I have met in 20 odd years of corporate IT and the posts in this place along with the job postings for contractors which are more often than not permie positions they are unable to fill or have had to move from Op Ex to Cap Ex for budget reasons.

Then why does HMRC score so badly in IR35 tax tribunals against contractors with proper representation, given that HMRC are picking off the cases they feel most confident in winning? Surely, HMRC should be winning 90% of cases or thereabouts.

[SomeDude]

Were these independent tax professionals or scheme promoters and their hired help?

Scheme promoters, independent accountants, and HMRC people themselves (I actually called HMRC to ask what exactly is the deal with these DoTAS schemes and if there may be any problems by using them before I first joined, the answer was "all good, no worries", got it from two separate people on the phone). Why do you ask?

[Dylan]

You are using wrong analogy. There is no crime in running Ltds

There is no crime in being in a scheme either, unless you are now suggesting tax avoidance has suddenly moved to be a criminal offense?

Why pick ltd over umbrella?

[DonkeyRhubarb]

Then why does HMRC score so badly in IR35 tax tribunals against contractors with proper representation, given that HMRC are picking off the cases they feel most confident in winning? Surely, HMRC should be winning 90% of cases or thereabouts.

That's a good question.