Reply to: BN66 get out: Any experts here have a view on this?

[LisaContractorUmbrella]

There has been an important development in the case of a former bn66 DTA scheme member who Warr & Co are representing.

HMRC have issued a Section 8 Notice demanding National Insurance contributions on payments (including NI on Trust payments) deemed to have been made by the “deemed employer” (in this instance the UK company of the scheme promoter) . (Obviously the employer could appeal this notice.)

If HMRC are demanding NI from the employer it is highly suggestive that they are concerned that they cannot collect it from the individual taxpayer who participated in the scheme.

Section 8 notices are issued when it is necessary to make a “ruling” on the employment status of a “worker”.

This appears to be a positive movement in proving that the arguments put forward by Warr & co are correct.”

HMR&C will have issued collection notices (I believe called Regulation 80's) to the individuals who participated in the scheme at the same time as the section 8 notices were issued and I would suggest that it means that the HMR&C are quite confident in their pursuit of the scheme operators

[ir35amnesia]

interesting development

There has been an important development in the case of a former bn66 DTA scheme member who Warr & Co are representing.

HMRC have issued a Section 8 Notice demanding National Insurance contributions on payments (including NI on Trust payments) deemed to have been made by the “deemed employer” (in this instance the UK company of the scheme promoter) . (Obviously the employer could appeal this notice.)

If HMRC are demanding NI from the employer it is highly suggestive that they are concerned that they cannot collect it from the individual taxpayer who participated in the scheme.

Section 8 notices are issued when it is necessary to make a “ruling” on the employment status of a “worker”.

This appears to be a positive movement in proving that the arguments put forward by Warr & co are correct.”

[LisaContractorUmbrella]

I would have thought the main problem here is the fact that these schemes relied on the self-employed status of the individuals using them and that everything would have been done contractually and in practise to reinforce that position. As an intermediary you have to ensure that all T's are crossed and I's dotted and I can't imagine that these large, high profile companies would have done anything to indicate that an employee/employer relationship existed. To turn around after Court submissions have failed and try to reverse that position would surely be viewed as a complete sham?

[ASB]

I have received S9 TMA 1970 letters enquiring into relief under DTA but NOT into my self-employment on which tax was paid. On that basis HMRC cannot now enquire into my self-employment and I would suggest have accepted it. On the same note, if I were to now approach HMRC and state that I was not in fact self-employed and need to submit revised SARs, I think it might just look like I had deliberately misled them. I feel some penalties coming on.

Whether you were actually employed or self employed is a matter of the employment status rules. It is entirely possible that were a status enquiry to be undertaken then you could indeed be found to be an actual employee of the entity you were invoicing (I'm not saying it's likely of course).

I would imagine that the contracts entered into were fairly clear the intent was self employment but that doesn't make it so.

I don't think it would be in HMRC interest to challenge the S/E status. If you were indeed an employee who are they going to chase for the employment taxes (with any reasonable prospect of success).

I can certainly see the angle being using with this potential solution, but whether it has any reasonable prospect of success I don't know. Equally if it is indeed successful the possibility would still exist user the transfer of obligations provisions to rest the liability on the taxpayer. (again no real idea of the prospects of that actually happening).

Certainly I think to say "it can't possibly work" is short sighted. I would think at least enquiring might give a better idea and enable a more informed judgement to be made overall.

I'm sure a lot of people who may have looked at the original scheme, and the man on the Clapham omnibus, would have said "that can't possibly work". However a lot of people were convinced by the highly technical arguments that it did. Is it not the case that in the Warr idea the technical arguments might just be compelling.

[SantaClaus]

Exactly what I was thinking...

penalties and possible charges of tax evasion.

[Emigre]

I am really struggling with this concept. I completed my SARs together with a self-employment supplement because I was self-employed.

I have received S9 TMA 1970 letters enquiring into relief under DTA but NOT into my self-employment on which tax was paid. On that basis HMRC cannot now enquire into my self-employment and I would suggest have accepted it. On the same note, if I were to now approach HMRC and state that I was not in fact self-employed and need to submit revised SARs, I think it might just look like I had deliberately misled them. I feel some penalties coming on.

HMRC have a Tardis, we do not.

[ir35amnesia]

[I]
Also, who would be the employee [employer !] in this situation, the end client or Montpelier? My investigation of the law in this area leads me to think it's Montpelier but I am a layman and I personally think this would be one of the things tested at a TT.
Warr must at least think he has a fighting chance, because at only 500 quid a head to take a case on I doubt he'll even cover his out-goings on this. He's clearly banking on winning some cases and getting his cut of the tax saved.

Have only quoted a small excerpt from this post. BUT two NB points.
A/ Montpelier are NOT going to tackle bn66 by putting themselves in the firing line to pay the tax AND
B/ Twit Two has hit nail on head. £500 will hardly cover the work/costs involved in putting each case together/in order. BECAUSE the "real" fee will be received if bn66.co.uk is successful.

[TwitTwo]

How many times does it have to be said, MP's scheme has not been proven in law not to work. MP's scheme hasnt been tested in law, that's the ******* point!

Deservedly negged.

Wow. Just remembered why I stopped being involved in this place years back. There's only so many windbags and armchair tax lawyers one can read a day.

At the end of the day it comes down to this. If you think you can go to a TT with MontP and win then stay with them. But whilst our oh so erudite friend above is correct to pull me up on my error, we really are arguing over semantics. It has to be remembered the TT will deal in facts and the fact is that HMRCs arguments are now enshrined in law, despite our best efforts. They are facts.

If you think, as I do, this means it's just going to be another epic fail for us in the TT, then you should at least investigate anything available which promises a better outcome. If you don't even bother to investigate such options in this scenario, then more fool you really because you are not availing yourself of all information available. Even if that information turns out to be duff at least it was examined and failed for good reason, rather than speculation. I can't believe I have to tell a load of IT contractors this, because rigourous examination of information and process is our stock in trade, right?

I don't care. I can pay. It'll hurt but it can be done. For those facing certain bankruptcy you can pick up the phone and call Warr in the same time it takes you to read the rantings on CUK.

[BolshieBastard]

Surely Monteplier are going to have signed documentation to the contrary, ie partnerhsip agreements etc?

Correct but what is written on a piece of paper and what is enforceable in law are two very different matters. Remember a contract has to be underpinned by how it works in practice for a court to consider it enforceable. We know this when contracts are proven to be not worth the paper they are written on when running then through an IR35 test. But yes, it's of course a hurdle that has to be dealt with.

Also, who would be the employee in this situation, the end client or Montpelier?

My investigation of the law in this area leads me to think it's Montpelier but I am a layman and I personally think this would be one of the things tested at a TT.

Are HMRC, who have now increasingly got the weight of law on their side to go after contractors, suddenly going to change tack and go after the "employers" and basically start a wole new IR35 argument instead?

It's not an IR35 argument.

Maybe it doesn't work. But the point is, we now know for a fact that Montpelier's approach doesn't work. That is now proven in UK law. So, faced with certain failure, any other approach, even something that's highly unlikely to work, is actually better. That's just a simple risk based approach to it; turn an issue into a risk.

Warr must at least think he has a fighting chance, because at only 500 quid a head to take a case on I doubt he'll even cover his out-goings on this. He's clearly banking on winning some cases and getting his cut of the tax saved.

I'd merely suggest anyone facing a liability could do worse than speak to the guy and see for themselves.

As I say, I have nothing to gain. I just think people in the same scenario as me should avail themselves of the facts around all options available, even if they appear to be outside odds.

How many times does it have to be said, MP's scheme has not been proven in law not to work. MP's scheme hasnt been tested in law, that's the ******* point!

Deservedly negged.

[TwitTwo]

Sorry if I'm missing the point, but surely for this to work, the contractor is going to have to prove that they thought they were an employee all along, but Montpelier incorrectly treated them as self employed? Surely Monteplier are going to have signed documentation to the contrary, ie partnerhsip agreements etc? Also, who would be the employee in this situation, the end client or Montpelier? Are HMRC, who have now increasingly got the weight of law on their side to go after contractors, suddenly going to change tack and go after the "employers" and basically start a wole new IR35 argument instead? Can't see it myself.

Surely Monteplier are going to have signed documentation to the contrary, ie partnerhsip agreements etc?

Correct but what is written on a piece of paper and what is enforceable in law are two very different matters. Remember a contract has to be underpinned by how it works in practice for a court to consider it enforceable. We know this when contracts are proven to be not worth the paper they are written on when running then through an IR35 test. But yes, it's of course a hurdle that has to be dealt with.

Also, who would be the employee in this situation, the end client or Montpelier?

My investigation of the law in this area leads me to think it's Montpelier but I am a layman and I personally think this would be one of the things tested at a TT.

Are HMRC, who have now increasingly got the weight of law on their side to go after contractors, suddenly going to change tack and go after the "employers" and basically start a wole new IR35 argument instead?

It's not an IR35 argument.

Maybe it doesn't work. But the point is, we now know for a fact that Montpelier's approach doesn't work. That is now proven in UK law. So, faced with certain failure, any other approach, even something that's highly unlikely to work, is actually better. That's just a simple risk based approach to it; turn an issue into a risk.

Warr must at least think he has a fighting chance, because at only 500 quid a head to take a case on I doubt he'll even cover his out-goings on this. He's clearly banking on winning some cases and getting his cut of the tax saved.

I'd merely suggest anyone facing a liability could do worse than speak to the guy and see for themselves.

As I say, I have nothing to gain. I just think people in the same scenario as me should avail themselves of the facts around all options available, even if they appear to be outside odds.

[BolshieBastard]

What a load of w@nk this is. Another 'scheme' claiming they have Qc's opinion. So what? QC's opinion is worthless until tested in court, as I now know to my cost.

[DonkeyRhubarb]

Tim's been working with contractors for years - I worked for him when I left school in fact. A thoroughly decent, honest man whom I've never heard anyone say a bad word about. Admittedly I've not spoken to him since about 1989.......

I have previously heard nothing but good things about him too. Maybe it was a case of crossed wires.

Over the past few years I've just become very suspicious of anyone who says they can help us. I've heard from a number of people who have shelled out for worthless advice.

Unfortunately, we are easy targets for the ambulance chasers.

[Vallah]

Actually Montpelier took an opinion from a Junior Barrister NOT a QC. AND we will never know whether or not the scheme worked.

BUT everyone is missing the point about bn66.co.uk . It is NOT a scheme it is using the legislation that HMRC defend to "the hilt (sic)". HAVE you ever seen case law where HMRC were arguing that someone was NOT an employee BUT self employed.

SO if you say you were actually an employee BUT your pseudo employer treated you otherwise (in order to avoid employer NI etc etc) THEN are HMRC going to drag you through the courts to prove that you were NOT employee and that IR35 did NOT apply etc etc.

Sorry if I'm missing the point, but surely for this to work, the contractor is going to have to prove that they thought they were an employee all along, but Montpelier incorrectly treated them as self employed? Surely Monteplier are going to have signed documentation to the contrary, ie partnerhsip agreements etc? Also, who would be the employee in this situation, the end client or Montpelier? Are HMRC, who have now increasingly got the weight of law on their side to go after contractors, suddenly going to change tack and go after the "employers" and basically start a wole new IR35 argument instead? Can't see it myself.

[TwitTwo]

Tim's been working with contractors for years - I worked for him when I left school in fact. A thoroughly decent, honest man whom I've never heard anyone say a bad word about. Admittedly I've not spoken to him since about 1989.......

I've been speaking to Tim on and off for about three years on this matter. I used to post here regularly and closed my account for various reasons. I felt the need to add some balance on this matter. I am a person affected by BN66 and used a DTA solution.

ir35amnesia's statement aligns with what I have been told by Tim. Tim has come across as totally honest and he has been upfront about the risks with his approach. He is totally accepting of the simple fact that a lot of us may simply wish to pay up and make this all go away. He therefore doesn't come across as someone particularly angling for lots of business on this and, being as he only charges a small amount per case (additional fees on success) one imagines that he's not exactly going to make a retirement nest-egg from this.

It's my personal view that if you can afford to pay HMRC off then it might be worth sticking with Montpelier or whoever else is fighting your case, because a few extra (comparitively small risks) do come into play IMO. But we must be aware that the action spearheaded by Montpelier has failed in every court in the land and so they are in a very weak position and we must not expect any form of settlement to arise with them. What have they got to offer or indeed threaten HMRC with now?

If you are going to be bankrupt then you may well consider going with Tim Warr, in my personal opinion. HMRC will now collect what they consider due, let us not pretend otherwise any longer. EVEN if action moves onto ECHR as has been discussed by various scheme operators, in the interim the sums will fall due and bankruptcies will occur. So the liability is present anyway, what worse can happen by using an alternative approach? There's nothing to lose in the example I use.

Myself and a few others can afford to pay but are considering use T Warr. We are weighing this up on a purely financial risk basis. That's the purpose of this post; remember, this is a purely dispassionate matter and it simply comes down to who can save you the most money? I would suggest it is at least a phone call with Mr Warr to discuss his approach in order you have a grasp of it and can make an informed assessment.

DYOR, it's your money and career.

[simondolan]

HMRC don't discuss deals. They will neither confirm nor deny.

A lot of people would jump at the chance of "no interest" let alone a "30% tax discount".

I hope Tim Warr is being straight with people.

Tim's been working with contractors for years - I worked for him when I left school in fact. A thoroughly decent, honest man whom I've never heard anyone say a bad word about. Admittedly I've not spoken to him since about 1989.......