Reply to: 18/19 Tax return questions

[AnthonyB]

It's more of a discussion than a question.
Around the new questions that HMRC have introduced:

Have you used one or more tax avoidance schemes?
Yes
No

Do you need to disclose any income from disguised remuneration avoidance schemes? If you received any disguised remuneration loans between 6 April 1999 and 5 April 2019 and they have not been fully repaid or you still owe tax on an outstanding amount, select yes.

My point is that HMRC have said that something is tax avoidance previously and have been found to be wrong in a court of law.

Is it fair to ask these questions considering most people answering them won't have the expertise or knowledge to answer them properly?
What are HMRC looking for here do you think? Is it just a flag to show that something untoward might be happening so that they can investigate further or are they actually looking for a real answer and, if so, see my previous point.

I'd be v.interested to know if anyone has ever fallen foul of these before. Many high street companies (Amazon, Starbucks) and leading business people (Branson) use dubious methods to reduce their tax. Many of use far less dubious methods (pensions, bike to work scheme, ISAs etc.) to reduce our tax. I suspect there is a huge grey area between the two of those and I'd be interested to hear any stories of people falling in to that grey area and both getting it in the neck from HMRC and not getting it in the neck.

Hopefully that clarifies. Yes, it appears I may have been involved in a scheme before but the question/point here is far wider than that. Hopefully the post above has made that clear, it's a discussion, like most posts. I could extract the questions for you to answer yes/no to but that's not really what I'm looking for.

Thanks.

[Lance]

@Old Greg,
Ideally not, I pay a lot for private health insurance but why not? I've paid more in to the NHS than most, I don't think using a scheme for less than 10months over 33yrs precludes me from that. Not sure how any of this relates to the original post.

@Lance,
It seems like you are struggling to understand me.
My post in the scheme forums was about schemes, unsurprisingly. My post here is a more generic post about the questions that HMRC are asking anyone that fills in a tax return. I just find it interesting that they are asking normal members of the public questions that in some instances, not even they are able to answer with a simple yes/no question.

If nobody has any views on my question and would prefer to discuss the scheme then that's fine but that's probably better placed in the other thread.

what's your question?

[AnthonyB]

@Old Greg,
Ideally not, I pay a lot for private health insurance but why not? I've paid more in to the NHS than most, I don't think using a scheme for less than 10months over 33yrs precludes me from that. Not sure how any of this relates to the original post.

@Lance,
It seems like you are struggling to understand me.
My post in the scheme forums was about schemes, unsurprisingly. My post here is a more generic post about the questions that HMRC are asking anyone that fills in a tax return. I just find it interesting that they are asking normal members of the public questions that in some instances, not even they are able to answer with a simple yes/no question.

If nobody has any views on my question and would prefer to discuss the scheme then that's fine but that's probably better placed in the other thread.

[Old Greg]

Given that HMRC have both won and lost court cases based on these questions and tax advisors charge thousands to give you an opinion how is a layman supposed to confidently answer the below questions from HMRC?

My previous employer tells me I have not.
A tax advisor, at a glance said if what your employer is saying is correct they are 'probably right'?

How am I, as a mere mortal that hasn't studied tax law and doesn't have the power to make a legal judgement, supposed to answer these questions?

I have gone for 'no' on both and then caveated that with a two page summary of my previous employment stating that I believe the answer is no but I also believe I am not qualified to make such a decision.

Isn't an ISA, a dividend and a pensions tax avoidance? When I pay in to my pension, I avoid tax? So surely the whole country is answering 'yes' to the first question...

Any thoughts on this?


Have you used one or more tax avoidance schemes?
Yes
No
Do you need to disclose any income from disguised remuneration avoidance schemes? If you received any disguised remuneration loans between 6 April 1999 and 5 April 2019 and they have not been fully repaid or you still owe tax on an outstanding amount, select yes.

Yes, HMRC did come back and said they are happy for me to select no and elaborate on an attachment.

Yes, after nearly ten years in the Army and my first stint in contracting, surrounded by others used Pembroke I followed the well trodden route supported by a major City based consulting firm and advice from a 'choose an umbrella' type company on the web. No, I'm not looking for sympathy, neither am I looking for your views on morality, when the billionaires of this world start paying their tax and being held to account I might care a little bit more. There are a lot of grey areas in this, for one, the loan charge states it applies when a third party was involved, there was no third party involved in my loan.

All I'm interested to know is what I MUST pay by law. I won't lose any sleep knowing that HMRC don't like it and might try and close it, I just want to pay what I legally must and move on. Stating that I have used a 'scheme' or whatever other terminology they want to use would require some pretty substantial legal understanding. In fact, when I asked a tax advisor for a view on this I was told it would cost ~£1800 to investigate the issue so it's obviously not that clear cut.

My undesrstanding is the scheme I used doesn't smell right, it's probably not morally proper and probably should be closed going forwards but under the current loan charge legislation it is not in scope as there is no third party. If HMRC tell me different and tell me to pay then I'll consider then whether I fight in court (probably not) or whether I shut up and pay up (probably that). But I'm not going to volunteer myself for sacrifice, also, I need some time to save up...

And I bet you won't use the NHS, if you get a nasty dose of Covid 19.

[Lance]

Not looking for help on a scheme,

OK if you say so.

I just find it interesting and wondered if anyone else had any issues with this or views on it?

Lot's of people. But they all think it's a scheme.... https://www.contractoruk.com/forums/...ml#post2690806
Including their liquidator.

I'm struggling to understand exactly what you want. You've been following this for 6 months already.
And I really don't know what you think you'll get from this forum when the scheme forum couldn't help you any further..... https://www.contractoruk.com/forums/...ml#post2736463

[AnthonyB]

Not looking for help on a scheme, I just find it interesting and wondered if anyone else had any issues with this or views on it?

As I say, HMRC have previously given their answer on those things in court and have been told they are wrong and so have some pretty good tax advisors. It just seems a bit silly to be asking such specific questions of someone completing their tax return that requires the individuals to know and be able to understand legislation, case law and make a legal decision. Quite a stretch I would imagine for most people, let alone Barry with less than 5 GCSEs who now runs his own rubbish removal van... I just thought it was a bit silly really.

[Lance]

Yes, HMRC did come back and said they are happy for me to select no and elaborate on an attachment.

Yes, after nearly ten years in the Army and my first stint in contracting, surrounded by others used Pembroke I followed the well trodden route supported by a major City based consulting firm and advice from a 'choose an umbrella' type company on the web. No, I'm not looking for sympathy, neither am I looking for your views on morality, when the billionaires of this world start paying their tax and being held to account I might care a little bit more. There are a lot of grey areas in this, for one, the loan charge states it applies when a third party was involved, there was no third party involved in my loan.

All I'm interested to know is what I MUST pay by law. I won't lose any sleep knowing that HMRC don't like it and might try and close it, I just want to pay what I legally must and move on. Stating that I have used a 'scheme' or whatever other terminology they want to use would require some pretty substantial legal understanding. In fact, when I asked a tax advisor for a view on this I was told it would cost ~£1800 to investigate the issue so it's obviously not that clear cut.

My undesrstanding is the scheme I used doesn't smell right, it's probably not morally proper and probably should be closed going forwards but under the current loan charge legislation it is not in scope as there is no third party. If HMRC tell me different and tell me to pay then I'll consider then whether I fight in court (probably not) or whether I shut up and pay up (probably that). But I'm not going to volunteer myself for sacrifice, also, I need some time to save up...

There’s a specific forum on this site for HMRC scheme enquiries. Have a look there for more specific answers..
There are some professional advisers who will get you started with some advice, in public, for free.

[zonkkk]

Did you initially answer Yes or No?
Which answer is HMRC questioning?

If you said Yes and they asked you - how come - fair enough. If you answered No and they queried it, they must know something they're not saying.

[AnthonyB]

Yes, HMRC did come back and said they are happy for me to select no and elaborate on an attachment.

Yes, after nearly ten years in the Army and my first stint in contracting, surrounded by others used Pembroke I followed the well trodden route supported by a major City based consulting firm and advice from a 'choose an umbrella' type company on the web. No, I'm not looking for sympathy, neither am I looking for your views on morality, when the billionaires of this world start paying their tax and being held to account I might care a little bit more. There are a lot of grey areas in this, for one, the loan charge states it applies when a third party was involved, there was no third party involved in my loan.

All I'm interested to know is what I MUST pay by law. I won't lose any sleep knowing that HMRC don't like it and might try and close it, I just want to pay what I legally must and move on. Stating that I have used a 'scheme' or whatever other terminology they want to use would require some pretty substantial legal understanding. In fact, when I asked a tax advisor for a view on this I was told it would cost ~£1800 to investigate the issue so it's obviously not that clear cut.

My undesrstanding is the scheme I used doesn't smell right, it's probably not morally proper and probably should be closed going forwards but under the current loan charge legislation it is not in scope as there is no third party. If HMRC tell me different and tell me to pay then I'll consider then whether I fight in court (probably not) or whether I shut up and pay up (probably that). But I'm not going to volunteer myself for sacrifice, also, I need some time to save up...

[zonkkk]

Have you used one or more tax avoidance schemes?
Yes
No
Do you need to disclose any income from disguised remuneration avoidance schemes? If you received any disguised remuneration loans between 6 April 1999 and 5 April 2019 and they have not been fully repaid or you still owe tax on an outstanding amount, select yes.

Did HMRC come back to you, to question your answer to this question?

[Lance]

And they wonder why there’s very little sympathy when it all turns to rattulip for them.

[ladymuck]

Basically an ISA?

Yep. Just like an ISA.

[Old Greg]

It might be with pointing out he's been involved with a Pembroke scheme.....

https://www.contractoruk.com/forums/...sing-down.html

Basically an ISA?

[ladymuck]

It might be with pointing out he's been involved with a Pembroke scheme.....

https://www.contractoruk.com/forums/...sing-down.html

Ah. Well there's your problem!

[northernladuk]

Have you ever signed up to a scheme like those discussed in the HMRC Scheme Enquiries sub forum that were set up using arcane arts to save you tax, with a of promise of 85%+ take home pay and some kind of loan arrangement?

If yes then it's a yes.

If all you've ever done is put money into an ISA then it's a no.

If your accountant isn't sure that that the way you've been paid in the past isn't a tax avoidance scheme then you could be on tricky ground.

Something tells me there's a lot you're not sharing.

It might be with pointing out he's been involved with a Pembroke scheme.....

https://www.contractoruk.com/forums/...sing-down.html