HMRC Consultative Document - marketed tax avoidance schemes

[convict]

Its a complete joke. These companies are still in existence today, some under a different name and HMRC are going after the people who took out these schemes. What about closing down the companies that offered them? I am not paying them anything until they close down the company I was with. It is the fault of HMRC/governemnt that let these companies crop up in the first place. There wouldnt be this mess of these companies were not around.

What has any of this got to do with the consultation doc?

[DonkeyRhubarb]

HMRC do not make the law

The whole thing looks like a massive land-grab by HMRC who will resist amending this as much as possible. They've put the stake in the ground, and then put a building on top of it.

Bear in mind that this is legislation so it will have to be passed by Parliament. A lot of MPs, especially Tories, will not be comfortable about people being denied due process.

It's one thing to introduce this going forward (prospectively) ie. from 2014 onwards, if you use a DOTAS scheme, you have to pay the tax up front.

It's another thing altogether to make it retrospective back to 2004 when DOTAS was first introduced.

[cojak]

What has any of this got to do with the consultation doc?

It hasn't.

He's just venting his spleen.

[new user]

HMRC defending and protecting Scheme providers

Its a complete joke. These companies are still in existence today, some under a different name and HMRC are going after the people who took out these schemes. What about closing down the companies that offered them? I am not paying them anything until they close down the company I was with. It is the fault of HMRC/governemnt that let these companies crop up in the first place. There wouldnt be this mess of these companies were not around.

It is not just a joke - its much more serious than that, looks like HMRC employees are/were involved in these arrangements. When I keep pointing to the responsibility of the scheme providers - HMRC protecting them, saying they are legitimate and can offer their services and would not be responsible. Scheme providers are legal UK companies, which are receiving money on the contractors behalf and manipulate it. These companies are registered and paying taxes (income from commissions, corporate tax...). HMRC can't provide any arguments and trying to avoid this topic by all means.

[cojak]

Right - let's put a stop to this.

If you want to complain about the unfairness of Scheme Providers 'getting away with it', do it in another thread.

You may even want to do something about it.

Don't just complain about them in this thread (which is about the consultation paper).

Any more and I'll start a separate thread and dump you in there myself.

[LandRover]

It is not just a joke - its much more serious than that, looks like HMRC employees are/were involved in these arrangements. When I keep pointing to the responsibility of the scheme providers - HMRC protecting them, saying they are legitimate and can offer their services and would not be responsible. Scheme providers are legal UK companies, which are receiving money on the contractors behalf and manipulate it. These companies are registered and paying taxes (income from commissions, corporate tax...). HMRC can't provide any arguments and trying to avoid this topic by all means.

The employer is responsible for subtracting tax and Ni before payments are made to employees. The Rangers case was against the Murray Group not individual footballers.

[TheDandy]

Well I've responded to the consultation and urge other to do the same.

1. What happens if someone enters into scheme and is forced to pay, cannot and is bankrupted. The person now cannot continue in their line of business due to being bankrupt and is unemployed and their career is wrecked. Later it turns out the scheme was ruled legitimate. Will you pay them compensation for ruining their life?

"It is proposed, therefore, that HMRC will issue a Payment Notice to the best of
their judgement. "

2. HMRC have an opinion and an estimate of tax. So now they can make a guess, demand money and then maybe give it back depending on what they think:



"Where accelerated payments have been
demanded and paid, HMRC will repay if the taxpayer succeeds in litigation and
HMRC pursues an appeal, subject to an additional rule that will enable HMRC to
withhold a repayment on the grounds that HMRC has reasonable grounds for
believing that the tax may be at risk. "

The whole thing looks like a massive land-grab by HMRC who will resist amending this as much as possible. They've put the stake in the ground, and then put a building on top of it.

You forgot to ask which group of people will be next and how these principals will be applied to said group once this is resolved to their satisfaction. Never happen you say?

EDIT, apologies shouldn't have replied with that on this thread - won't happen again sir!

[TheDandy]

Bear in mind that this is legislation so it will have to be passed by Parliament. A lot of MPs, especially Tories, will not be comfortable about people being denied due process.

It's one thing to introduce this going forward (prospectively) ie. from 2014 onwards, if you use a DOTAS scheme, you have to pay the tax up front.

It's another thing altogether to make it retrospective back to 2004 when DOTAS was first introduced.

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!

[costo]

My Initial Thoughts

I'm yet to respond but want to gather some more thoughts before I do.

A question - will HMRC "delete" our responses? - it would be in HMRC's interest to "ignore" our responses (and lets be honest they don't want to play fair), how can we be sure that they do read them and make sure the concerns are noted? In looking at the previous documents they seem to gloss over many questions as not relevant and not saying how many people ask? should a email box be setup for example where when responding all could CC the mailbox so HMRC could not claim they did not see the responses? that would also help us potentially in the future if this was challenged? When this reaches the government for ratification they need to have the facts, not a convoluted washed over version HMRC push through ignoring valid points raised?

Maybe the BN66 guys could comment here as they have been through similar?

Section 3.8

The ‘follower notice’ proposals involve the issue of a notice to taxpayers involved
in avoidance schemes where there has been a final judicial decision in another
taxpayer’s case on the same or similar arrangements. The notice requires the
taxpayer to amend their tax return (if the return is still under enquiry) or agree to
settle the dispute (where a closure notice or tax assessment or determination has
been made and is under appeal).

What constitutes “similar” – and who can make that definition? That by its nature is subjective and should be answered by a impartial party (e.g. a judge) If it is HMRC they become judge/jury & executioner

Section 3.19

It is important to note that this will simply be a form of payment on account and not
a payment that determines the amount of the final liability. If the amount paid is
less than the final amount due, the taxpayer will still be liable to pay any remaining
balance when the dispute is finally resolved. Equally, if the taxpayer continues to
pursue their claim and is successful then they will get their money back with
interest.

Again this glosses over the details, it almost implies that users of schemes have “cash” available to give to HMRC whilst the majority of people have either not got the money at all (lets also not forget we are in a recession) or its tied up in investments. If forced to liquidate all assets (and many of us also go bankrupt) – if eventually we won giving the money “back” with interest would not compensate for the damages done to us personally and society as a whole. Even stating HMRC’s figure of them winning 80% of cases (where only cases based on what was taken to court they expect to win), that means that 20% of people effected by this will have been significantly negatively effected in a life changing way, only to be proved they were innocent all along. That’s 1 in 5 people will have their lives destroyed with no recourse from HMRC when they were innocent. This is actually a conservative estimate, as of yet HMRC have not proved the schemes did not work and still unlikely they will be able to prove definitely.

Section 3.5

There is no inherent presumption that tax under dispute should sit with the
taxpayer rather than the Exchequer. Under current law, there are a number of
circumstances where the tax sits with the Exchequer while the liability is finalised.
Currently:

• HMRC is able to deny claims for tax repayments pending final resolution;
• HMRC can enforce tax payment when there are claims for other years that
might reduce or eliminate that tax;
• Tax is payable following a court or tribunal decision, despite a continuing
appeal; and
• There are general circumstances where tax is withheld and repaid (eg: PAYE,
tax on interest),

These are totally different circumstances, the 1st one being tax repayments so they already have the cash - in these cases the money is highly likely (if its there at all) to be tied up in long term investments and in freeing it up means liquidating assets. This is a totally different situation to mentioned here with the consequences being much more far reaching.

Then of course the impact section – it glosses over the impact this will have on the economy – 16,000 people is not a small group of people, there is some serious assumptions that this only affects “high earners” - How can that be proved?

As they mention the vast majority of users of schemes were pre 2009, that was a very different economy that it is now and I think that this impact needs to be proved rather than assumed. I for one do not earn anything near the money I did in those days and I’m not alone, we should make it clear that as one who is effected by this then they are wrong.

Assuming 16K people have to pay significant money in 90 days has no impact to the economy cannot be correct – has anything like this happened before? for example there will be a significant amount of bankruptcies in one go - how does that affect the systems in place for bankruptcy? could the courts manage a massive increase? social housing needed for the bankrupt people with families, businesses closed down to pay debts, people put out of work, security clearances lost and can no longer contribute to society? Then lets not forget the cost of health, this will cause massive amounts of stress stress = sickness more burden on the NHS, suicides, alcoholism, drug use, marital breakdowns on a scale not seen before? How many people will leave the country? skills exodus... and these are just my initial thoughts.

Has it been considered the wider effect than the person who used the scheme? e.g. children - this has a significant impact on the lives of those around the users of such schemes.


DOTAS Follower Notice – Perhaps the most sinister of all of this When the schemes were marketed this was not case, had we been in privy to that information surely nobody would have signed up. In the same way the government makes their decisions based on what they knew at the time so did we? it wasn't so long ago the great expenses scandal which is in effect along the similar lines of how these schemes were used - now the rules have changed and be tightened but it wasn't retrospectively applied to them? but it is recommended in this case.


I'm sure more to come - I urge everyone to start thinking and responding - this is not just an attack on users of avoidance schemes, the implications that such draconian far sweeping laws can get passed into society unchecked is unbelievable, reckless and could lead to even more desperate measures by the government.

[LisaContractorUmbrella]

Its a complete joke. These companies are still in existence today, some under a different name and HMRC are going after the people who took out these schemes. What about closing down the companies that offered them? I am not paying them anything until they close down the company I was with. It is the fault of HMRC/governemnt that let these companies crop up in the first place. There wouldnt be this mess of these companies were not around.

There is an old expression - caveat emptor which means 'buyer beware' - HMRC's argument against this would be that it is the responsibility of the tax payer to arrange their own affairs - blaming the company that devised the scheme will not absolve you of your responsibilities as a tax payer. As you say, many of these schemes are still existence (although not for much longer I would think) and they make promises of 85% or 90% take home - with the basic rate of tax at 20% and, knowing that the scheme operator will take a cut, using one must always be, at the very least, a calculated risk