AM Limited COP8 HMRC Investigation Letter..

[DotasScandal]

It's NOT retrospective.

It says that from xx/xx/14, if tax is in dispute then the Government will hold it until the dispute is settled.
So only if tax is in dispute at xx/xx/14 does it bite.
I know it feels like retrospection. I know HMRC should have got off their ar$e and done something before it got to this point. I know it feels unfair. But it's not retrospection in the way of s 58 et al.
that makes it hard to resist on legal and constitutional grounds and therefore you have to find a way of getting your cases to Tribunal quickly.

Except in many (most?) cases involving contractors, there is no dispute to speak of - just HMRC opening an inquiry into a tax return, sitting on it for 6,7,9 years doing/saying nothing, then all of a sudden declaring that a dispute exists.

This is nothing like the the film schemes you mention on another thread, where there have been legal proceedings going on for years.
It is also nothing like the cute little example scenarios the Government included in their response to the consultation on APNs / FNs.

Therefore it does not only feel retrospective and unfair, it feels like we average Joe's are simply being taken for a ride because we are docile, easy-targets.

In truth, the whole thing reeks of spoliation.

[DonkeyRhubarb]

In truth, the whole things reeks of spoliation.

Had to look that word up but it's an apt description.

[LandRover]

It's NOT retrospective.

It says that from xx/xx/14, if tax is in dispute then the Government will hold it until the dispute is settled.

So only if tax is in dispute at xx/xx/14 does it bite.

I know it feels like retrospection. I know HMRC should have got off their ar$e and done something before it got to this point. I know it feels unfair. But it's not retrospection in the way of s 58 et al.

that makes it hard to resist on legal and constitutional grounds and therefore you have to find a way of getting your cases to Tribunal quickly.

Retrospective in that the government has given HMRC powers to demand payment for disputed monies not from the tax year that the legislation became law, but also for prior years. Wasn't it nearly always the case that a government brought about legislation and you would have a clear "timeline/date" of when that legislation became law?

Asking for money required new legislation, and yet the money is not for the tax year that the legislation was mdae into law but is for previous years, hence imo retrospective.

Isnt one of the fundamental rights of British people have clear perception that your government inact legislation that is binding from the date it is made into law?

[webberg]

Retrospective in that the government has given HMRC powers to demand payment for disputed monies not from the tax year that the legislation became law, but also for prior years. Wasn't it nearly always the case that a government brought about legislation and you would have a clear "timeline/date" of when that legislation became law?

Asking for money required new legislation, and yet the money is not for the tax year that the legislation was mdae into law but is for previous years, hence imo retrospective.

Isnt one of the fundamental rights of British people have clear perception that your government inact legislation that is binding from the date it is made into law?

To the best of my knowledge, nothing in our constitution says that the Parliament that we elected cannot make retrospective law.

As I said, I know it feels like retrospection but legally it's not and that's what allows the slippery Gauke to make the statements he does. I'm not trying to defend him or the rules he was complicit in making.

I'm trying to make the point that anybody hanging their hopes on the APN rules being removed because of their "retrospection" is likely to be disappointed.

[webberg]

Except in many (most?) cases involving contractors, there is no dispute to speak of - just HMRC opening an inquiry into a tax return, sitting on it for 6,7,9 years doing/saying nothing, then all of a sudden declaring that a dispute exists.

This is nothing like the the film schemes you mention on another thread, where there have been legal proceedings going on for years.

In truth, the whole thing reeks of spoliation.

It's very similar to film schemes. HMRC started opening enquiries and sitting on the backsides waiting until they recruited somebody bright enough to understand them. The Ingenious case currently in Court is an investment made in 2006. Legal proceedings started in 2011.

If you have a COP 8 or an enquiry notice or a discovery assessment, you KNOW a dispute exists. At that point your choices are to push hard for resolution via whatever means or the reach a settlement short of litigation.

Your choice of word is apt. HMRC set out to destroy contractor schemes and make them so unattractive that nobody would do them again. Being involved in a long, frustrating and expensive enquiry is a good way of driving that message home.

[DotasScandal]

If you have a COP 8 or an enquiry notice or a discovery assessment, you KNOW a dispute exists. At that point your choices are to push hard for resolution via whatever means or the reach a settlement short of litigation.

I do hear you, webberg, but for the average non-lawyer, non-accountant contractor busy doing their thing, an equiry meant just that - an enquiry. I.e., in HMRC's own words "I'm going to look into it" (a discovery assessment I understand is a different story).

Your choice of word is apt. HMRC set out to destroy contractor schemes and make them so unattractive that nobody would do them again. Being involved in a long, frustrating and expensive enquiry is a good way of driving that message home.

And this is where the narrative doesn't work for me. Too much cognitive dissonance.

If all they wanted to do was "destroy contractor schemes and make them so unattractive that nobody would do them again", then they already did that very effectively with last year's first strike.
99.999% of users of DOTAS structures I know have dropped from them almost immediately at that time (these are not the kind of people who engaged in "tax avoidance" for the sake of tax-avoidance or principles).
So it's pretty safe to say that that objective was met beyond expectations, and the message heard loud and clear.

*If* that was indeed the objective, then there was no need for HMRC to go back to the old enquiries and mobilize the resources that they did in preparation of legal battles.
Just saying "from now on, anyone declaring use of a DOTAS structure will have to make a payment on account for the amounts that we say" would have yielded the exact same result.

[webberg]

And this is where the narrative doesn't work for me. Too much cognitive dissonance.

If all they wanted to do was "destroy contractor schemes and make them so unattractive that nobody would do them again", then they already did that very effectively with last year's first strike.
99.999% of users of DOTAS structures I know have dropped from them almost immediately at that time (these are not the kind of people who engaged in "tax avoidance" for the sake of tax-avoidance or principles).
So it's pretty safe to say that that objective was met beyond expectations, and the message heard loud and clear.

*If* that was indeed the objective, then there was no need for HMRC to go back to the old enquiries and mobilize the resources that they did in preparation of legal battles.
Just saying "from now on, anyone declaring use of a DOTAS structure will have to make a payment on account for the amounts that we say" would have yielded the exact same result.

Hard to argue with the logic. HMRC and Treasury should have had a policy which said "no more disguised employment" and implemented a clear prospective legislative regime to achieve it.

Unfortunately they implemented IR35 which was full of holes. They assumed that if the big contractor "employers" were scared into action, then the market would follow. Certainly the bank I was at then spent millions on ensuring that they were compliant.

However human nature and ingenuity kicked in and ways around the "problem" were found. HMRC reacted in a piecemeal way. No joined up thinking, eye off the policy ball assisted by rubbish internal systems. Add in a major overhaul of HMRC and the complication in getting information from offshore parties. A recipe for chaos.

It would be nice to think that a new administration would say.

"Pay 20% [pick number here] of your loans for all periods to 2015. We'll tell you that from now all arrangements that produce an effective rate of tax below [25%] will be regarded as avoidance and attacked. We'll deal with non DOTAS schemes separately."

Nice but unlikely in the extreme.

(I also have a real anger about DOTAS has been mis-used and twisted, but that's a different story).

[ads1980]

Well mine has finally turned up. It also looks like they have sent a copy to my current tax advisor who was not my tax adviser at the time this took place and will not be interested in this at all. So I'll be on to AML tomorrow to join the list on the JR.

[DotasScandal]

Pretty good summary on taxation.co.uk:

http://www.taxation.co.uk/taxation/b...et-little-guys

(Related to the discussion above)

[ads1980]

Ha! My settlement letter that I requested in January has turned up today! A day after I received the APN. It does apologise though for the delay in sending me a full reply!