Reply to: If it seems to good to be true............80%-90% take home

[smalldog]

Thanks Mal - knew I'd seen it somewhere

my humble opinion is that anyone who went ebt/other scheme post 2008 basically strapped on a rising sun headband and decided kamikaze was the ultimate answer. The entire game changed, and im afraid psc's are on the radar, just not yet but, their time will come.....and I think we all know it's only a matter of time, no matter how many people shout were in a legitimate business, the powers at be don't believe you I'm afraid.

Ir35 as it was implemented, failed to address the governments distaste at single person companies challenging etonian buddies consultancy contracts. However to me it's not over yet, not by a long way.

[LisaContractorUmbrella]

Tat would be the original Monpelier/BN66 case. The contention all along has been that the wording of the legislation did not properly reflect what the "real" situation was supposed to be, and so BN66 wasn't a retrospective amendment, it was a clarification of the original intent. The effect is that the tax rule was changed retrospectively, but only if you accepted the interpretation of the original wording as used by the likes of Montpelier. Since we aren't tax lawyers, it's hard to see the difference in outcome though, which is what the NTRT people are fighting about.

Note that IMHO this does not apply to the later EBT-related stuff. HMRC put a clear marker in the ground in 2008 about what they intended to do and from when.

Thanks Mal - knew I'd seen it somewhere

[malvolio]

Exactly. HMRC often state that tax laws should not be used in a way that was not intended by Government. They also said something along the lines of tax law shouldn't be used in a way that the Government wouldn't have approved of had they thought about it - can't find the case in question but I did consider ordering a crystal ball at the time just to be on the safe side

Tat would be the original Monpelier/BN66 case. The contention all along has been that the wording of the legislation did not properly reflect what the "real" situation was supposed to be, and so BN66 wasn't a retrospective amendment, it was a clarification of the original intent. The effect is that the tax rule was changed retrospectively, but only if you accepted the interpretation of the original wording as used by the likes of Montpelier. Since we aren't tax lawyers, it's hard to see the difference in outcome though, which is what the NTRT people are fighting about.

Note that IMHO this does not apply to the later EBT-related stuff. HMRC put a clear marker in the ground in 2008 about what they intended to do and from when.

[speling bee]

Exactly. HMRC often state that tax laws should not be used in a way that was not intended by Government. They also said something along the lines of tax law shouldn't be used in a way that the Government wouldn't have approved of had they thought about it - can't find the case in question but I did consider ordering a crystal ball at the time just to be on the safe side

Parliament, I think, not Government.

[LisaContractorUmbrella]

The key difference between a tax avoidance scheme and a Ltd company is that the Government intends you to use a Ltd company, and there are explicit rules about setting it up. It's within the law as it was intended.

Exactly. HMRC often state that tax laws should not be used in a way that was not intended by Government. They also said something along the lines of tax law shouldn't be used in a way that the Government wouldn't have approved of had they thought about it - can't find the case in question but I did consider ordering a crystal ball at the time just to be on the safe side

[BlasterBates]

The key difference between a tax avoidance scheme and a Ltd company is that the Government intends you to use a Ltd company, and there are explicit rules about setting it up. It's within the law as it was intended.

[ASB]

There was a bit of chatter about qc opinion. Phil at breeze did publish theirs. But it is very important to realise how narrow these are. In effect "wont get caught under x of act x".

This is a long way off a confidence that it works. There are all sorts of other things it could be caught under. And no opinion of these has been sought.

Breeze marketing mentions gaining a substantial tax advantage. This alone may prejudice the allegedly commercial nature.

I am not saying breeze will stand or fall. Simply that is is naive in the extreme to expect it not to come under different attack from evolving legislation. The same is true of any scheme.

[eek]

Exactly, linking current 'aggressive avoidance' legislation with the limited company approach is just plain bonkers.

For those of us who were caught up in the former, and now use the latter, do allow us a small amount of paranoia that HMG just hates everyone. Actually - maybe it's just me they hate and the rest of you are just collateral damage

FTFY hth

[jbryce]

dum dum dum diddle diddle diddle diddle dum dum dum

HMRC's view seems to be that, if something is contrived and its main purpose is to avoid tax then it will be considered tax avoidance - a PSC can in no way be described as contrived and its main purpose is to be a trading vehicle for an independent contractor

Exactly, linking current 'aggressive avoidance' legislation with the limited company approach is just plain bonkers.

For those of us who were caught up in the former, and now use the latter, do allow us a small amount of paranoia that HMG just hates the very though of Contractors. Actually - maybe it's just me they hate and the rest of you are just collateral damage

[kal]

Unfortunately we are seeing dodgy scheme users spreading this story. it seems to be part of a narrative that they are in the firing line of the new fascist state and we'll be next.

As Mal says, the Ltd company is a perfectly legitimate vehicle defined by primary legislation etc. etc.

Exactly, the dodgy scheme users are trying to tar LtdCo contractors with the same brush when nothing could be further from the truth, 90% retention + maybe 1% to HMRC with the remainder being trousered by some geezer in the Isle of Man is not the same as drawing salary and dividends both of which are taxed fully as per current legislation.

[LisaContractorUmbrella]

HMRC's view seems to be that, if something is contrived and its main purpose is to avoid tax then it will be considered tax avoidance - a PSC can in no way be described as contrived and its main purpose is to be a trading vehicle for an independent contractor

[jamesbrown]

Unfortunately we are seeing dodgy scheme users spreading this story. it seems to be part of a narrative that they are in the firing line of the new fascist state and we'll be next.

As Mal says, the Ltd company is a perfectly legitimate vehicle defined by primary legislation etc. etc.

Indeed. I don't agree with retrospection and I wouldn't crap on their discussion thread, but there's a clear effort to try and muddy the waters in order to broaden support against the crackdown on scheme users. Ultimately, there's a big difference between conducting tax planning within the broader context of running a Ltd and using a convoluted scheme whose sole purpose is to avoid tax. I don't particularly care for the language of "aggressive avoidance", which is essentially HMRC adopting the same strategy of muddying the water, but the contrast between tax planning within a Ltd company (for which there are many good reasons) and the use of a scheme specifically designed to avoid tax is a stark contrast indeed and, in this context, the latter could reasonably be labelled "aggressive". Not that any opinions are going to be changed on this - I'm sure many scheme users honestly believe that the primary motivation for a Ltd is to avoid tax - it probably was for them, which is why they got into this mess with schemes - but it isn't the primary motivation for a large fraction of us. To reiterate though, I don't agree with retrospection or the blunt approach being taken (with severe human costs), but I do fully agree with the forward-looking aspects of the legislation in terms of prevention.

[Old Greg]

Didn't MF get banned for saying something similar?

Well, he's a very naughty boy.

[TheFaQQer]

First they came for the BN66-ers and I did not speak out because I was not a BN66-er...

Didn't MF get banned for saying something similar?

[Old Greg]

It's almost as if they want to encourage a professional representative group to take more of an interest by implying that we're all impacted, rather than just the aggressive tax avoiders.

First they came for the BN66-ers and I did not speak out because I was not a BN66-er...