Reply to: Fraudulent Tax Avoidance

[cojak]

We don't remove threads that contain replies (as per CUK rules).

We can, however, lock threads.

[RockTheBoat]

I think the mods should take this thread down. jones isnt a contractor. He's just a piss artist.

Mods, please take this down.

agreed

this clown has had more than enough publicity

[oracleslave]

Alan Jones - Banned.

This makes me glum


NOT!

[BolshieBastard]

This thread is just jones' attempt to profile the MTM scheme and his ongoing 'crusade' against a certain individual.

I think the mods should take this thread down. jones isnt a contractor. He's just a piss artist.

Mods, please take this down.

[helen7]

The opinion of a tax barrister should only convince you to join a scheme if he is prepared to pay your tax bill should HMR&C have a different opinion.

Couldn't agree more!!

Alan's points also valid; so stop bashing him for the sake of it. It seems on this board if you say something people don't want to hear they call you names.

In my opinion loan schemes have always been fraudulant and I am incredibly surprised that HMRC have not gone after these with more gusto.

Does the loan go on the tax return? if not, I assume the disguised income is undeclared - does this make it evasion?

[LisaContractorUmbrella]

"The reference to loan schemes is interesting because there are a number of IR35 loan schemes particularly using Offshore Employee Benefit Trusts often referred to as EBT’s. If these schemes are operated as set out in the Opinion provided by (normally) a Tax Barrister then – if the Tax Barrister says the scheme is OK, it should be OK"

Why should it be ok? The Opinion is exactly that - a legal opinion. Just because one tax barrister approves the scheme it doesn't mean that another would. The opinion of a tax barrister should only convince you to join a scheme if he is prepared to pay your tax bill should HMR&C have a different opinion.

[Cosmo]

Oh give it a ******* rest - and again!!

[Alan Jones]

EBT & other loan schemes

However when you pay no tax because your entire income is a loan (wink wink nudge nudge) when it really isn't a loan, might be OK but if a judge then decides this is not really a loan and that stands in a court of law, this could quite potentially be then viewed as fraud.

So it depends on how aggressive you are, but if you're being given a loan, and you know it isn't really one, then you're playing with fire, and if you get away with it then good luck, but if not I don't see the great injustice.

The reference to loan schemes is interesting because there are a number of IR35 loan schemes particularly using Offshore Employee Benefit Trusts often referred to as EBT’s. If these schemes are operated as set out in the Opinion provided by (normally) a Tax Barrister then – if the Tax Barrister says the scheme is OK, it should be OK. Please note this does not stop HMRC/Treasury changing the law to close down these schemes – in fact a Budget Notice issued this year stated that EBT loan schemes would be closed down from April 2011.

BUT and this is a big BUT - if in order to obtain a “sale” the promoter (or its Agent) makes a promise that the loan is never repayable then this changes things. ARE we now in the realms of “fraudulent avoidance” and if so what are the consequences.

BEWARE
A/ If you have an email or any other written “side” document (even a copy of a presentation slide) with some kind of promise that the loan is NOT repayable then you should seriously consider your position and take advice. (further beware – having read this posting you could delete the email BUT what if unbeknown to you a copy ends up on HMRC desk e.g. they decide to raid the promoter's premises).
B/ If you have been told verbally that the loan is never repayable WHAT will you do/say if you are questioned “under caution” by HMRC (and not knowing what information HMRC have gathered from the promoter. (NB this situation is very different in law from initially being told/promoter confirming the loan is repayable BUT it actually gets written off in the future - this is (in my opinion) NOT “fraud” BUT there will be tax consequences resulting from the write-off which will depend on your personal circumstances/situation at the time of write-off)

FINALLY - In the “world of Tax” there are very few fraud/criminal cases taken by HMRC BUT the taxpayer and/or promoter usually end up in prison if found guilty. YES “fraudulent avoidance” = criminal = maybe PRISON. Normally the only way to obtain a “dont' go to prison card” is to make the first move i.e. you hand yourself in before they catch you.

[BlasterBates]

The trouble is how do you distinguish between bonafide tax avoidance and tax avoidance that isn't, which could then be classified as fraudulent, with these schemes.

When I was tought tax avoidance on my accountancy course a longtime ago, tax avoidance was "getting married", buying a house and offsetting it from tax, or for businesses or selecting the higher level of depreciation when more than one method is on offer. The sort of things you can openly discuss with the tax office

However when you pay no tax because your entire income is a loan (wink wink nudge nudge) when it really isn't a loan, might be OK but if a judge then decides this is not really a loan and that stands in a court of law, this could quite potentially be then viewed as fraud.

So it depends on how aggressive you are, but if you're being given a loan, and you know it isn't really one, then you're playing with fire, and if you get away with it then good luck, but if not I don't see the great injustice.

In other words you need to distinguish between tax breaks which are intended, and which you maybe entitled to, if you didn't know, and trying to twist a rule. So if the Government wants to encourage ship building (like they did in Germany) and they offer tax incentives on investments in ship building, you can ring up the taxman talk to him about it, invest in a ship yard and avoid a tax by filling out a form from HMRC. This is an example of the sort of tax avoidance you learn about when your training to be an accountant. But what has happened is IOM companies have generated in huge industry in twisting rules arguing it's just tax avoidance. Well not in my book. But good luck if you're doing it.

[Jog On]

I think the phrase "fruadulent tax avoidance" is about as clear as "paying your fair share"

[centurian]

There is no such thing as fraudulent tax avoidance.

Buying 2 max allocation ISA's in one year probably fits that.

It's a tax avoidance scheme, but used in such a way that it is fraudulent.

You can argue that this is actually tax evasion, although this term is usually used in regard to deliberate failure to disclose income etc.

I'm not too concerned about the use of the term "fraudulent tax avoidance", as long as it refers to wilful improper use of tax avoidance schemes and doesn't try and paint the picture that tax avoidance is fradulent.

[escapeUK]

You think so and I think so. But I think you'll find that HMRC no longer make that distinction. To them, any action that lowers the tax take below what it was intended to be is to be pursued aggressively.

I totally agree, I will pursue any action that will lower my tax.

[Ignis Fatuus]

I don't understand your post. But I want to go and comment on the title: "Fraudulent Tax Avoidance".

Tax evasion is illegal and unethical.
Tax avoidance is legal and sensible.

You think so and I think so. But I think you'll find that HMRC no longer make that distinction. To them, any action that lowers the tax take below what it was intended to be is to be pursued aggressively.

[Alan Jones]

I don't understand your post. But I want to go and comment on the title: "Fraudulent Tax Avoidance".

There is no such thing as fraudulent tax avoidance.

The following is reproduction of article on BBC website.
"A 60-year-old man has been arrested as part of an investigation into a company which has its head office in the Isle of Man, it has been confirmed.
HM Revenue & Customs officers searched the premises of The Montpelier Group on Palace Road in Douglas on 29 September.
A company office in the UK was also targeted in the investigation.
A spokesman from HMRC said: "The investigation centres around the suspicion that tax avoidance schemes have been implemented fraudulently".
Police suspect schemes could have been sold to more than 600 subscribers with an estimated tax loss in excess of £90m.
John Mitchell, from the Isle of Man Financial Crime Unit, said: "A quantity of material was seized on the island but there were no arrests made here."
The Montpelier Group is an international company with offices in the UK, Barbados and Hong Kong.
A spokesman from the group declined to comment."

SO i was merely quoting HMRC who say "The investigation centres around the suspicion that tax avoidance schemes have been implemented fraudulently" i.e. Fraudulent Tax Avoidance.

[Cosmo]

Remind me what it was you used to do for a living Alan?

Oh, it's ok.... I remember - you used to work for a provider of these schemes?

Bearing a grudge? Axe to grind?