2019 tax charge - consultation preparation

[AtW]

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.

I think you are misreading politics here or more likely just express what you'd like it to be as it suits your arguments.

I reckon (this is my personal view) the politics as far as HMRC are concerned are as follows:

1) The alleged tax take is relatively small because they've stopped the rot before it infected the whole market - CHECK

2) Political imperative is to stomp very hard on blatant abuse under the cover of "it's legal and we've got a leading QC opinion to prove it" - CHECK (I reckon)

3) The main objective for HMRC is to completely discredit all those schemers - bankrupting a few thousand people who owe tax but can't pay is a no brainer (TODO)

Of course in court they'd say it's about fairness, need to pay tax etc etc etc... if you think they are liars then please go and stand in front of a big mirror, make sure you are alone and then say 10 times: "I honestly, hand on heart believe those loans are NOT sham loans". Did you blush? You don't have to answer...

You should have used your impressive legal skills in dealing with the scheme providers.

[DonkeyRhubarb]

Can someone call pest control.

[AtW]

Can someone call pest control.

Is there something wrong?

[difficulttimes]

Seriously I really don't understand people who jump on a CUK Forum for HMRC Enquiries and throw comments around like that. Everyone is entitled to an opinion but can you take it somewhere else?
You are so flippant with 'bankrupting a few thousand' that's just the beginning of it.. next is divorce, family break down, loss of contract/job, stress leave and then ultimately for some it will be their life. I've heard that people taking their own life is a real risk and not just the odd one or two but many. Maybe you could high five yourself in the mirror to that.
Contractors who are caught up in this situation jump onto these forums for some updated information and maybe a little bit of hope which is slowly being sucked away. So please move your opinions to somewhere else because no-one hear wants to read them.

[AtW]

Seriously I really don't understand people who jump on a CUK Forum for HMRC Enquiries and throw comments around like that. Everyone is entitled to an opinion but can you take it somewhere else?
You are so flippant with 'bankrupting a few thousand' that's just the beginning of it.. next is divorce, family break down, loss of contract/job, stress leave and then ultimately for some it will be their life. I've heard that people taking their own life is a real risk and not just the odd one or two but many. Maybe you could high five yourself in the mirror to that.
Contractors who are caught up in this situation jump onto these forums for some updated information and maybe a little bit of hope which is slowly being sucked away. So please move your opinions to somewhere else because no-one hear wants to read them.

I said - "I reckon (this is my personal view) the politics as far as HMRC are concerned are as follows:" - which part of that wasn't clear? I am not HMRC.

False hopes given by false prophets (AKA leading QCs) got people into this mess and then KEPT for years by giving false hopes that it's all legal, as the result people accumulated massive interest/fines.

[Iliketax]

The levers are political.

But those levers were pulled a long time ago. HMRC has been tasked to change the law to achieve the government's policy objective and so they are going to do it. It's the same as, for example, the new income-based carried interest rules. The BVCA has way more clout with politicians than contractors ever will have but got no political change. IBCI still came in. The changes that were made from the initial consultation, and subsequent draft legislation, where very much along the lines of ensuring that the policy objective was met in a way that reflected the business reality of the sector. There was no change in policy objective. The same before that with asset managers/AIFMD and mixed partnerships. No changes other than to ensure that the policy objective was met in a way that reflected the business reality of the sector.

If any one thinks they have political levers then you really should be pulling them now. Not once the consultation comes out (or three months after when the response goes in).

[QCApproved]

atw - I think the take was low because a great many people came to understand that IR35 was unenforceable and resorted to the daddy of all schemes - the low salary high dividend augmented with claiming for expenses (that quite frankly may or may not have been incurred in the quantum outlined if at all) spouse tax rate arbitraging - limited company model.

Is inserting items into a contract that do not reflect the actual working situation so that its "IR35 Compliant" as I have been asked to do by contractors I have hired - a "sham" as well

[AtW]

Is inserting items into a contract that do not reflect the actual working situation so that its "IR35 Compliant" as I have been asked to do by contractors I have hired - a "sham" as well

Smart people bought insurance though, so they hedged their risk in this way. If you had Lloyds of London covering your tax+costs in the event of HMRC demanding it then I'd say bravo. You didn't because nobody in their sane mind would give insurance to such a scheme without premium approaching tax take + costs + profit for the insurer. CDTs for 6 years was the only correct action that scheme providers must have insisted everybody does, plus 3rd party warranty that fees will be repaid in full in the event of serious challenge from HMRC. I would have thought a leading QC would have advised that strongly.

I don't accept your argument that Ltds were schemes - people used them in a way that the Parliament intended and the tax take wasn't zero - with increased tax on dividends from April 2016 the difference is very small. False expenses claiming would obviously be wrong. Sharing dividends with your wife? Fair play I say, it's not like she is a random person or you got fake marriage for the purposes ot tax avoidance.

[DonkeyRhubarb]

Are you suggesting that contractors use limited companies to avoid tax?

Wash your mouth out with soap and water.

[AtW]

Are you suggesting that contractors use limited companies to avoid tax?

No, I don't consider usage of UK Ltds as tax avoidance.