2019 tax charge - consultation preparation

[DotasScandal]

The first round of loans could have been investigated and litigated by HMRC after those returns were submitted in short order and a note put on the website at that point and the scheme providers contacted to advise that HMRC saw these as income and not loans. They did not and perhaps fostered expectations of the treatment of these over a decade - maybe there is a tort in there somewhere.

It is even worse than that. It's revisionism plain and simple by HMRC and the Treasury.
Please see the commentary from Robert Maas here

(Thanks to DonkeyRhubarb for bringing this to our attention in the first place)

[QCApproved]

I'll have to have a look at that DOTAS - perhaps I can raise an FOI as a concerned taxpayer on why the decision was made to take action against these schemes now to include all meeting minutes etc. Could we not have waited a few more years locked in x more millions and taken full retro action down the line and thus fattened the public purse further? has this clampdown been premature?

[DonkeyRhubarb]

Think

One consequence of the proposed 2019 charge is that anyone, who was contemplating taking appeals to the FTT, might no longer do so. After all, what's the point in going to court now if you're going to get clobbered in 2019 anyway?

However, this may well be playing into HMRC's hands.

If there were a lot of appeals in the hands of the courts, Parliament (not HMRC) might think twice about passing legislation which could be sub judice.

[DotasScandal]

Could we not have waited a few more years locked in x more millions

And here is the other big hole in all of the Treasury's "projections" - the unquestioned assumption that those "millions" actually exist and are in the possession of contractors, stuffed in a mattress somewhere. They do not.

We'd argue that in the area of APNs, the law of diminishing returns is already hitting HMRC hard and that "collection" from contractors does not prove as straightforward as they expected - simply because the contractors don't have the money! It is one thing to "collect" from 500 ultra-rich who invested millions of spare cash in film schemes. "Collecting" from broke ex-contractors who used their earnings from better days to survive in recessionary Britain is quite another. Notice there haven't been many HMRC updates on APN collection milestones lately?

On a side note, here are some interesting comments from IDS about the geniuses at the Treasury, from yesterday's Guardian.
With visionaries like these defining policy, it's hardly surprising things are the way they are.

[DotasScandal]

One consequence of the proposed 2019 charge is that anyone, who was contemplating taking appeals to the FTT, might no longer do so. After all, what's the point in going to court now if you're going to get clobbered in 2019 anyway?
However, this may well be playing into HMRC's hands.

Indeed. It is discussed here. But this too is a huge gamble on the part of Treasury.
Not everyone is falling for it tough, and we know of several FTT cases that are very much proceeding. Harder than ever, even.

[DonkeyRhubarb]

Perhaps everyone should put their BIG PANTS on, and request Closure Notices from HMRC?

I know from someone who has that they don't want to issue them. You have to badger the hell out of them.

Ultimately, if they won't comply, you can apply to the FTT for a direction forcing them to issue them.

[foobar]

Leverage

I wonder if the admirable efforts of groups like BG, DotasScandal, NTRT etc are producing enough LEVERAGE over this situation?

For example, to turn a boat you don't push from the bow. You use a rudder at the back to induce low pressure on one side. That tiny piece of wood in the right place is now enough to turn around the mightiest of oil tankers.

Industrious and bright people in the UK who arranged their affairs lawfully now face complete ruin at the hands an essentially dishonest government who seem concerned only with vote counts. Despite the gloom, I am convinced not all is lost if we can just find the right lever.

What might that lever be ???


Interesting article here:
http://www.taxation.co.uk/taxation/A...fting-disguise

[DotasScandal]

Despite the gloom, I am convinced not all is lost if we can just find the right lever. What might that lever be ???

It will be given to us in time. Then we'll use it.
"Ask and it will be given to you; seek and you will find; knock and the door will be opened to you."

Interesting article here:
Lifting the disguise | Taxation

Yes, it's a great read. Well worth spending 5 minutes to sign-up.

[DonkeyRhubarb]

What might that lever be ???

The only thing I can think of is to get loads of cases to the FTT.

If the schemes are in the hands of the courts, then Parliament may not want to interfere by enacting that 2019 charge.

[webberg]

The levers are political.

Why is HMG driving thousands of contractors out of business?
What happens when the skills shortage strikes?
Why have those contractors left the sector/UK?

Because they fear being the victim of further retrospective action or of HMRC administrative SNAFU.

Why might this happen?

Because HMG is introducing policy without the benefit of thought for the consequences.

But if it raises hundreds of millions from tax avoiders, surely that principle is correct?

No, because the alleged tax take (variously £200m to £400m) is pathetically small when compared to what the contractor market contributes to UK Plc, which we were told this morning from a respected (and unconnected) source was £45bn a year.

In other words HMRC is risking serious damage to UK Plc by trying to recover tax that has mainly arisen from their lack of action.

That is the political leverage and we need to weight our end of that lever with as many bodies as possible.

(Thanks for the mention of the article which is one of a series I have done to build momentum within the professional bodies as they have a lot of weight to add).