Reply to: Offshore schemes

[Higgs Boson]

Which is why they will be introducing additional legislation in the shape of GAAR

Which, was the whole point of your first post.

Pointing out to people that things are changing, due to past failures by HMRC.

[LisaContractorUmbrella]

Who says? HMRC? Despite what they think, they don't make the law and the weight of law firmly says that loans aren't income. Even the decision in the badly run Rangers case came down against HMRC on this. The current investigations into the old EBT scheme are nothing more than a try on by HMRC.

Which is why they will be introducing additional legislation in the shape of GAAR

[AtW]

Who says? HMRC? Despite what they think, they don't make the law

The Govt that runs HMRC makes the law.

They have unlimited funding to pursue very expensive lawsuits.

Ultimately responsibility for taxes is with the person who owes them, not somebody who was helping avoid tax - scheme providers don't risk much, but people who use them expose themself to bankrupcy and stand to lose everything they've gained over many years.

It's just not worth it.

[stek]

Who says? HMRC? Despite what they think, they don't make the law and the weight of law firmly says that loans aren't income. Even the decision in the badly run Rangers case came down against HMRC on this. The current investigations into the old EBT scheme are nothing more than a try on by HMRC.

Still, it deflects the HMRC from those of us who's tax affairs are within the law....

[Vallah]

Anyone on an offshore scheme is almost certainly going to have to pay back the tax.

Who says? HMRC? Despite what they think, they don't make the law and the weight of law firmly says that loans aren't income. Even the decision in the badly run Rangers case came down against HMRC on this. The current investigations into the old EBT scheme are nothing more than a try on by HMRC.

[LisaContractorUmbrella]

I was made to feel like the only police officer that wasn't on the mafia payroll by my colleagues. Somehow I was making the rest of them angry by daring to question their judgment. Just because I could see this was storing up a problem for the future. It was one of the reasons I found this forum as I couldn't believe I was the only freelancer that thought this was more or less just tax evasion.

Don't worry HB you're amongst friends here

[BlasterBates]

Anyone on an offshore scheme is almost certainly going to have to pay back the tax. It just isn´t worth it. Up until this year the argument was that contractors on EBT schemes had got away with it. But it looks like they haven´t.

The 13% goes mainly to the scheme provider, so HMRC will tot up more or less the full tax bill plus interest, the other thing is you won´t have many options to reduce the tax bill once it gets to that stage, and they´ll charge National Insurance.

So you get to pay the full tax bill plus a topping.

[Higgs Boson]

I was made to feel like the only police officer that wasn't on the mafia payroll by my colleagues. Somehow I was making the rest of them angry by daring to question their judgment. Just because I could see this was storing up a problem for the future. It was one of the reasons I found this forum as I couldn't believe I was the only freelancer that thought this was more or less just tax evasion.

[DonkeyRhubarb]

Just wandered over to that sub forum. Bloody hell - that's mushroomed - a lot of little fish on the hook.

The recent National Audit Office report on marketed tax avoidance schemes provided an estimate from HMRC of the scale of the contractor ebt/loan type schemes...

Over 70 promoters and 20,000 individuals

So "mushroomed" is the right word.

[cojak]

Erm ..... I was joking. But thanks for the email anyway.

They came to see us at work and left in a strop because me and a colleague were asking awkward questions.

Like "Why is the fee 13%? What do you do for 13%? Or is it just a figure you know you will get away with as it is roughly half of what we would have paid in tax"

Oh Gosh! Sorry HB - you were even too subtle for me!!

[Higgs Boson]

Right....

I thought you were joking in your original post Higgs Boson, but now I realise that you weren't. So I'll make it clear.

Providers are interested in obtaining your money - some of them will defend you if HMRC demand back tax from you, many of them won't.

They will tell you whatever is required to make sure that you sign on the bottom line.

It's up you to decide if what they tell you reflects reality.

Take a look at some of the little fish left wriggling on the HMRC hooks in this forum. HMRC Scheme Enquiries

Every little fish there is having a very unhappy time of it - their lives are on hold, many will be made bankrupt if HMRC succeed (as appears likely in many cases, despite what people say).

Because they believed the provider (who, incidentally is NOT on the HMRC hook and is a much bigger and clever fish that has closed down the scheme the little fish were swimming in and has moved onto better hunting grounds...)

Erm ..... I was joking. But thanks for the email anyway.

They came to see us at work and left in a strop because me and a colleague were asking awkward questions.

Like "Why is the fee 13%? What do you do for 13%? Or is it just a figure you know you will get away with as it is roughly half of what we would have paid in tax"

[centurian]

Take a look at some of the little fish left wriggling on the HMRC hooks in this forum. HMRC Scheme Enquiries

Every little fish there is having a very unhappy time of it - their lives are on hold, many will be made bankrupt if HMRC succeed (as appears likely in many cases, despite what people say).

Just wandered over to that sub forum. Bloody hell - that's mushroomed - a lot of little fish on the hook.

[centurian]

The worst will probably be the same as inside IR35 with a competitive interest rate loan from HMRC.

And that's how many scheme providers justify their scheme is "zero-risk" - not zero risk of having to pay HMRC a penny more - but zero risk of having to pay anything more than inside-IR35 plus interest, which can easily run to well over 6 figures if in the scheme for years.

[DonkeyRhubarb]

Joining a scheme was always bit of a gamble. These days it's even more so, especially now with the GAAR.

At best you might get away with c. 85% retention. (10% to the provider; 5% to HMRC)

The worst will probably be the same as inside IR35 with a competitive interest rate loan from HMRC.

If you spend the money then you're taking a very high stakes gamble.

[cojak]

I was very tempted. I can see why people would sign up, especially if you are coming in to Britain from abroad and will only work here for a few years and then go back home. But that is not everyone that works in a bank.

Then I asked what would happen if I died (and it is a loan after all) and what would happen if the Inland Revenue changed their mind, am I liable for the tax.

Right....

I thought you were joking in your original post Higgs Boson, but now I realise that you weren't. So I'll make it clear.

Providers are interested in obtaining your money - some of them will defend you if HMRC demand back tax from you, many of them won't.

They will tell you whatever is required to make sure that you sign on the bottom line.

It's up you to decide if what they tell you reflects reality.

Take a look at some of the little fish left wriggling on the HMRC hooks in this forum. HMRC Scheme Enquiries

Every little fish there is having a very unhappy time of it - their lives are on hold, many will be made bankrupt if HMRC succeed (as appears likely in many cases, despite what people say).

Because they believed the provider (who, incidentally is NOT on the HMRC hook and is a much bigger and clever fish that has closed down the scheme the little fish were swimming in and has moved onto better hunting grounds...)