Reply to: Oh dear someone's in trouble..

[Zero Liability]

You can't create laws and then complain when people do things to the letter but against the spirit of the law. That's not how laws work.

If people are finding loopholes then the law should have been written better in the first place.

However, in is instance it does sound like the law has already made a provision for artificially creating companies just to take advantage of the employers allowance so it seems to me that this "scheme" falls foul of the letter of the law, not just the spirit.

Absolutely. Not to mention the selective vagueness/fuzziness so they and their mates in parliament can get away with paying less tax, in spite of their purely tax-funded incomes in their capacity as such. I think a simpler tax system coupled with much lower, more transparent tax rates and commensurately reduced spending would be ideal. Though I can understand why in this case, from a prudential POV, this is just silly, provocative and bound to unravel before a court.

[northernladuk]

The law tries to pretend that the people are generally adults (except when they're children...). It assumes that if the meaning of something is clear then people should take that meaning, and not try to find a misplaced word to say it doesn't apply. Loopholes will always exist - where there is a problem with laws it is mostly where the intent is not made clear and is left open to interpretation - in those cases you can only go by the letter of the law..

True enough then a whole argument starts about whether or not it is reasonable to then close that loop and retrospectively apply it. Those that created it will see it as fair, those that exploited it won't. You knew you were going against the spirit and playing a hole, we closed that hole, it now fits the initial purpose of the law so pay up. Cue the argument... as is already the case.

[SueEllen]

The law tries to pretend that the people are generally adults (except when they're children...). It assumes that if the meaning of something is clear then people should take that meaning, and not try to find a misplaced word to say it doesn't apply. Loopholes will always exist - where there is a problem with laws it is mostly where the intent is not made clear and is left open to interpretation - in those cases you can only go by the letter of the law.

It's a childish argument to make, to say "I know what you meant, but it's not exactly how you said it, so I'm OK". If you told a child "You are not to walk out of that door until you tidy your room", a child might stand on one leg, hop across the threshold and say "I didn't walk, ha ha".

If the law was clear at all times then judges would not refer cases to higher courts to gain clarification on the law on particular cases.

[Ticktock]

Ok, you can complain. But I don't think legality should be based on a laws intentions but what it actually says. Laws should be written better in the first place.

The law tries to pretend that the people are generally adults (except when they're children...). It assumes that if the meaning of something is clear then people should take that meaning, and not try to find a misplaced word to say it doesn't apply. Loopholes will always exist - where there is a problem with laws it is mostly where the intent is not made clear and is left open to interpretation - in those cases you can only go by the letter of the law.

It's a childish argument to make, to say "I know what you meant, but it's not exactly how you said it, so I'm OK". If you told a child "You are not to walk out of that door until you tidy your room", a child might stand on one leg, hop across the threshold and say "I didn't walk, ha ha".

[SueEllen]

Ok, you can complain. But I don't think legality should be based on a laws intentions but what it actually says. Laws should be written better in the first place.

It's actually hard in some cases to write better laws due to the problem that words don't always have precise meanings in English.

To get round this as already stated judges rule about the intent of the law, and if they can't get around this in civil cases they will award £1 in damages and make you pay your own costs.

[TheCyclingProgrammer]

Yes, you can complain. It's the entire reason why judges will weigh cases against both the letter and the spirit of the law.

Something can be acting in strict accordance with the letter of the law, but a judge could still find against it if it quite clearly is not what the law intended.

Ok, you can complain. But I don't think legality should be based on a laws intentions but what it actually says. Laws should be written better in the first place.

[Ticktock]

You can't create laws and then complain when people do things to the letter but against the spirit of the law. That's not how laws work.

If people are finding loopholes then the law should have been written better in the first place.

However, in is instance it does sound like the law has already made a provision for artificially creating companies just to take advantage of the employers allowance so it seems to me that this "scheme" falls foul of the letter of the law, not just the spirit.

Yes, you can complain. It's the entire reason why judges will weigh cases against both the letter and the spirit of the law.

Something can be acting in strict accordance with the letter of the law, but a judge could still find against it if it quite clearly is not what the law intended.

[TheCyclingProgrammer]

You can't create laws and then complain when people do things to the letter but against the spirit of the law. That's not how laws work.

If people are finding loopholes then the law should have been written better in the first place.

However, in is instance it does sound like the law has already made a provision for artificially creating companies just to take advantage of the employers allowance so it seems to me that this "scheme" falls foul of the letter of the law, not just the spirit.

[Zero Liability]

More here:

accountancyage.com/aa/news/2410622/recruiter-accused-of-promoting-ni-tax-avoidance-shceme.

BBC gets a mention, too.

[jamesbrown]

I've said a couple of times and I know it just won't work but this statement alone is what they should be clamping down on. There is an underlying reason the rules were brought in so there should be some kind of legislation against going against this reason or the spirit to deter people just trying to pick holes and subvert the reason. It should be pretty clear what products are genuine and which are just avoidance vehicles and the action to deal with it should be at hand.

If people that create the schemes can be caught or deterred it wouldn't filter down in to use and be a problem. That thread about the company dissolving itself after passing property to associated company so avoiding all sorts of taxes. It's just a play on words etc.

Saying that I guess if someone did come up with some legislation to attach this approach someone would find a loophole

I'll wake up and be at one with reality in moment.......

To a degree, judges already account for the stated intentions of the laws and not just the letter, but this is a dangerous latitude in some ways, because it allows for sloppy legislation. Ultimately, our tax system is far too complicated and the disincentive for using tax schemes (i.e. schemes motivated by tax, with no other commercial purpose) is weighted too much on the scheme users and not enough on the developers and promoters, who have often disappeared once the scheme is investigated. What's needed is bold simplification (e.g. merging of NI and income tax) and aggressive pursuit of scheme developers, including the directors personally.

[Alan @ BroomeAffinity]

Not really any worse that all the one man band contractors claiming the same allowance - that is if you prescribe to the "intention of the law" rather than the rule of the law. If the intention is to encourage companies to take on new staff then all the one man band contractor ltds claiming it are doing so outside of that intention.

You could also argue that the spirit of the law is being abused in the case of the VAT Flat Rate Scheme. The spirit, or more accurately intention, is to simplify the accounting/admin processes associated with VAT registration for small businesses whereas as most contractors and freelancers see it as a way of enhancing profits - which it does quite well. I don't see that it really simplifies much for a typical contractor.

[GazCol]

I'm not sure the BBC have any room for criticising anybody for tax avoidance - it was their behaviour which left us with IR35!

[northernladuk]

Not really any worse that all the one man band contractors claiming the same allowance - that is if you prescribe to the "intention of the law" rather than the rule of the law. If the intention is to encourage companies to take on new staff then all the one man band contractor ltds claiming it are doing so outside of that intention.

I'd disagree with that.

[Dylan]

Not really any worse that all the one man band contractors claiming the same allowance - that is if you prescribe to the "intention of the law" rather than the rule of the law. If the intention is to encourage companies to take on new staff then all the one man band contractor ltds claiming it are doing so outside of that intention.

[unixman]

Depressingly, the govt is in bed with the banks, large consultancies and the big 4 accountancy forms. Tax "evoidance" like this isn't going anywhere. It is a major British industry, and a product we export to the world.