HMRC Consultative Document - marketed tax avoidance schemes

[DonkeyRhubarb]

It is another thing but I am sure from your own experience it's a real prospect. It needs more than a lot of Tories to kill this bill off so let's hope the experience of BN66 will be sufficient to make them think long and hard before supporting this. I won't be holding my breath though!

You are right to be sceptical/cynical. The Government usually gets what it wants.

And, as you can tell from the tone of this on the Government website, they want it !

https://www.gov.uk/government/news/t...x-owed-upfront

[LisaContractorUmbrella]

Reading on further - penalties will also be imposed if you fail to comply with a failure notice within 90 days:

12 (1) to the extent that the denied advantage is a deferral of tax (as with the EBT loan schemes) the value of that advantage is:

(a) 25% of the amount of the deferred tax for each year of the deferral or
(b) a percentage of the amount of deferred tax for each separate period of deferral of less than a year, equating to 25% per year of, if less, 100% of the amount of the deferred tax

This penalty can be reduced if the tax payer is seen to cooperate with HMRC. The penalty itself must be paid within 30 days of received the notice; similarly any appeal must be made within 30 days.

Further, if accelerated payments are unpaid at the end of the payment period HMRC will impose a penalty of 5% of the amount, further penalties of 5% will be applied after 5 months and then again after 11 months.

[TheDandy]

Reading on further - penalties will also be imposed if you fail to comply with a failure notice within 90 days:

12 (1) to the extent that the denied advantage is a deferral of tax (as with the EBT loan schemes) the value of that advantage is:

(a) 25% of the amount of the deferred tax for each year of the deferral or
(b) a percentage of the amount of deferred tax for each separate period of deferral of less than a year, equating to 25% per year of, if less, 100% of the amount of the deferred tax

This penalty can be reduced if the tax payer is seen to co-operate with HMRC. The penalty itself must be paid within 30 days of received the notice; similarly any appeal must be made within 30 days.

Further, if accelerated payments are unpaid at the end of the payment period HMRC will impose a penalty of 5% of the amount, further penalties of 5% will be applied after 5 months and then again after 11 months.

At some point, very quickly for many, the math is academic, if one cannot pay then 10%, 1000%, the percentages are irrelevant.

[Living life on the Edge]

And, as you can tell from the tone of this on the Government website, they want it !

https://www.gov.uk/government/news/t...x-owed-upfront

For me, this section from the website article goes to the nub of why people are furious:

"Currently, taxpayers must disclose that they are using an avoidance scheme. In doing so they accept that HMRC may challenge the scheme. These proposals to seek upfront payment will only apply where the scheme hits avoidance hallmarks. It is effectively an extension of the terms and conditions taxpayers may have to accept when deciding to use an avoidance scheme."

That would be fine if the taxpayers were able to accept those terms and conditions before entering the scheme, but to apply those terms and conditions up to 10 years after the event (in the case of DOTAS) is breathtaking in its arrogance and disdain for the rule of common law. What happened to the principle of certainty when making tax decisions? For this reason alone, the proposals cannot be allowed to pass into law.

[eek]

It is another thing but I am sure from your own experience it's a real prospect. It needs more than a lot of Tories to kill this bill off so let's hope the experience of BN66 will be sufficient to make them think long and hard before supporting this. I won't be holding my breath though!

The really issue here is how many MPs really want to answer very awkward questions regarding supporting tax dodgers at the next election....

While that may not be how people affected by this see themselves, that is the attack others will use. MPs without very solid majorities or choosing to retire are going to find voting against the government very very hard.....

And before anyone objects I'm not saying its fair (it ain't) what I'm saying is that the soundbites that people will hear are ones that make fighting the rules very difficult.

On a separate question do HMRC pursue fines down to the point of bankruptcy because those fines are scarily large....

[LisaContractorUmbrella]

The really issue here is how many MPs really want to answer very awkward questions regarding supporting tax dodgers at the next election....

While that may not be how people affected by this see themselves, that is the attack others will use. MPs without very solid majorities or choosing to retire are going to find voting against the government very very hard.....

And before anyone objects I'm not saying its fair (it ain't) what I'm saying is that the soundbites that people will hear are ones that make fighting the rules very difficult.

On a separate question do HMRC pursue fines down to the point of bankruptcy because those fines are scarily large....

Yes. Tax debt, bankruptcy and Special Relief « TaxAid

[LisaContractorUmbrella]

The are some 'consequential amendments' :

Paragraph 35 provides that, whilst HMRC will normally repay any disputed tax it has received if the taxpayer is successful in litigation at any stage, they will not be obliged to do so if there is a reason to think that the revenue may be at risk and the matter is being appealed further.

So basically, even if you win you lose

[DonkeyRhubarb]

"No man in this country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or to his property as to enable the Inland Revenue to put the largest possible shovel into his stores."

Ayrshire Pullman Motor Services v Ritchie v CIR CS 1929 14 TC 754, Lord Clyde.

This may have been true once but not anymore.

[eek]

Yes. Tax debt, bankruptcy and Special Relief « TaxAid

Having read that ouch. very few get outs there

The are some 'consequential amendments' :

Paragraph 35 provides that, whilst HMRC will normally repay any disputed tax it has received if the taxpayer is successful in litigation at any stage, they will not be obliged to do so if there is a reason to think that the revenue may be at risk and the matter is being appealed further.

So basically, even if you win you lose

Surely its the case that until any claim is decided upon by the upper tax tribunal they won't refund the money. So the implied threat is that everything will be appealed to the upper tribunal which is a hell of a delaying tactic...

[eek]

This may have been true once but not anymore.

+1. Hector is using the public's current dislike of / the publicity around big corporate tax avoiders to railroad through fundamental changes. They seem to have got their timing intentionally perfect....