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New Finance Bill 2017-18

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    Originally posted by starstruck View Post
    How do you know this now but didn't a month ago?
    I woke up early one morning and as I was starring at the belt of Orion at 3am on a cold December morning, I just realised I knew.

    Or alternatively, I did a bit of reading...

    In March 2017 said:

    5. Proposals on how the tax and NICs from a DR employment income charge will be collected from the appropriate person are not included in this technical update. There will be a technical consultation on the detail of those changes later in 2017.
    So I believed them. There has not been one. But I know that HMRC met people like the ICAEW and CIOT since then so it may well be that they decided that this was not necessary.

    Where the employer has been dissolved, they said:

    Sections 7, 8 and 9 of the Taxes Management Act 1970, set out the employee’s responsibility to return the employment income to HMRC by making a self-assessment return. As a result the employee is responsible for reporting the income and paying the tax to HMRC.
    So I read:

    - Section 7: "Every person who ... is chargeable to income tax ... for any year of assessment ... shall ... give notice to an officer of the Board that he is so chargeable"

    - Section 8: "For the purpose of establishing the amounts in which a person is chargeable to income tax ... for a year of assessment, and the amount payable by him by way of income tax for that year, he may be required by a notice given to him by an officer of the Board to make and deliver to the officer [a tax return]"

    - Section 9: "... every return ... shall include a self-assessment, that is to say ...an assessment of the amounts in which... the person making the return is chargeable to income tax ... for the year of assessment; and ... an assessment of the amount payable by him by way of income tax, that is to say, the difference between the amount in which he is assessed to income tax ... and the aggregate amount of any income tax deducted at source"

    So that basically says to do a tax return and tell us how much tax you have to pay. It also only allows tax withheld at source to be deducted from that liability. It doesn't say anything about tax that you can pretend to be deducted.

    So I then looked at regulation 185. In some circumstances, this pretends that amounts that an employer was liable to withhold, but didn't, as tax deducted at source. But if there is no employer, this can't apply.

    So what HMRC said in the technical note for a dissolved employer makes sense. The employee has to pay the tax on the April 2019 loan charge. I can't see that anything more is needed for the employee to have to pay the tax when the employer is dissolved.

    But I then looked at s203J TA88 which I remembered had a similar provision to regulation 185 (it did, and it made my geeky Friday that I could remember the right section number, first time, from something that was repealed 14 years ago) and the TLR commentary on the then new PAYE regulation. It was silent on the s203J(5) point (para 882 - just checked the number). It doesn't mention s203J but does talk about their change being 'the better view' but does not give me an extra insight into regulation 185. Section 203J(5) never made it to ITEPA (just wasn't needed with regulation 185).

    Why did I go through the hassle of looking at stuff over 14 years ago? In the technical note that came out on 1 December 2017 HMRC also said that where the employer exists but is unable to pay (e.g. insolvent but not struck off) then they will use regulation 80 to quantify the PAYE due and make a regulation 81 direction to transfer it to employees. I read both of these and, as the Part 7A charge is a notional payment, it make sense what they said. But that doesn't address the point about regulation 185. So if HMRC did not make a regulation 81 direction then the employee could say that regulation 185 does apply to mean that the employee could pretend that PAYE had been deducted for self-assessment purposes. So that's why HMRC had to say that. But I understand from this forum that the employers of contractors have been dissolved rather than left with no cash. If they are still around, don't forget that you should not believe anything written by a random stranger on the internet. There is likely to be a lot more to the technical arguments and if the trust is offshore, HMRC has its new 200% penalty regime waiting for someone to play with.

    For the avoidance of doubt, regulation 185 does not help get out of the April 2019 loan charge because s554Z5 looks at tax actually paid. The PAYE pretence doesn't apply.

    Or put it another way. HMRC said something. I checked, and double checked, what they were saying made sense.

    Comment


      Originally posted by jbryce View Post
      Do you think you can rework your examples to reflect contractors and EBTs?
      You'd have to set out the proper facts.

      Comment


        Originally posted by webberg View Post
        And Iliketax is correct, our files are littered with instructions from end user clients to contactors to use scheme so and so, via agent so and so. They knew exactly what was going on.
        It's worth saying that for some schemes - HMRC have finally got something that allows them to go after the people who promoted such schemes. Sadly its not retrospective and only came into law from September 30th 2017...

        Equally HMRC are doing everything they can to stop TAA getting anywhere near a court or tribunal
        Last edited by eek; 5 December 2017, 07:04.
        merely at clientco for the entertainment

        Comment


          Originally posted by ConfusedEasily View Post
          I can't f!!!i!!g settle because it was back in 2005. The year is closed. I have no records from that time (apart from one damaged payslip) so I have no idea how much I would declare. My accountant asked HMRC how I would settle under these circumstances and he was told to make an intelligent guess. WTF.

          Perhaps a magical post will appear on here clarifying what it is we should do for years up to 20 years ago (way past the point where we are required to keep record) given this ridiculous legislation.


          Depending on your bank they may be able to get bank statements going back that far. Lloyds, when I recently made a PPI claim, sent me my current account statements going back to 2000 for free to allow me to confirm what they owed me. That may be an appropriate means of getting the information for free.
          Last edited by eek; 5 December 2017, 09:33.
          merely at clientco for the entertainment

          Comment


            Originally posted by Iliketax View Post
            <snip>

            There is likely to be a lot more to the technical arguments and if the trust is offshore, HMRC has its new 200% penalty regime waiting for someone to play with.

            <snip>
            I've been wondering about this new 200% (minimum 100%?) penalty.

            Under what circumstances - in terms of contractor EBT schemes - would HMRC look to apply this new penalty? And on what amount?

            I understand this is quite an open-ended question but it would seem absurd for HMRC to say charge someone full PAYE on something from 2006 (or whenever) and then treble that charge.

            Even worse if it's on top of the Loan Charge, because you can't declare information for the Loan Charge until April 2019 anyway. So technically HMRC have said: wait until 2019 so that we can get the Loan Charge in place, but because you haven't told us about your offshore trust by Sept 2018 we're now going to treble your tax bill.

            Comment


              What is your purpose here?

              iliketax,

              Do you have any exposure yourself?
              How much?

              If you don't then why you bother trying to scare the sh*t out of people?

              Comment


                Originally posted by lespaulzep View Post
                iliketax,

                Do you have any exposure yourself?
                How much?

                If you don't then why you bother trying to scare the sh*t out of people?
                Think you're being somewhat unkind there Lespaulzep.. ILikeTax has been pretty honest throughout and is simply providing his knowledge/interpretation of something that impacts all of us here.. it may well be scary, but understanding your position is the first step to resolution.

                Comment


                  Originally posted by CDJ View Post
                  Think you're being somewhat unkind there Lespaulzep.. ILikeTax has been pretty honest throughout and is simply providing his knowledge/interpretation of something that impacts all of us here.. it may well be scary, but understanding your position is the first step to resolution.
                  Perhaps, I don't know the back history, forgive my naivity.
                  It would be useful however, if when quoted, the HMRC web page reference is quoted so we can all see what we are up against.
                  The 200% penalties for example - where is the there a reference for this please.

                  Comment


                    Iliketax

                    Is being helpful and just presenting the facts.

                    Comment


                      Originally posted by lespaulzep View Post
                      Perhaps, I don't know the back history, forgive my naivity.
                      It would be useful however, if when quoted, the HMRC web page reference is quoted so we can all see what we are up against.
                      The 200% penalties for example - where is the there a reference for this please.


                      Search on google - I found this ( https://www.taxation.co.uk/Articles/...while-iron-hot ) in seconds. While you may not like what Iliketax is saying the reality is that to get the advice he is providing would cost you hundreds if not thousands of pounds
                      merely at clientco for the entertainment

                      Comment

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