Reply to: HMRC consultation on tackling marketed schemes

[AtW]

Do you work for HMRC?

No.

[DirtyDog]

Disclosure of tax avoidance schemes (DOTAS) - are they all the same as in tax avoidance?

You betcha.

Do you work for HMRC?

[AtW]

So you think that every scheme with a DOTAS number is the same?

Disclosure of tax avoidance schemes (DOTAS) - are they all the same as in tax avoidance?

You betcha.

[DirtyDog]

DOTAS number is evidence against you and the massive difference in tax you paid and what should have happened under normal circumstances.

So you think that every scheme with a DOTAS number is the same?

[AtW]

Generally there is evidence against the bank robber. In this case, it would be like catching a bank robber with a big bag marked "SWAG". Then seeing everyone with a similar bag has to hand over their money because they have a bag that looks like one a bank robber had.

DOTAS number is evidence against you as well as the massive difference in tax you paid and what should have happened under normal circumstances.

[DirtyDog]

Very good, this should hopefully lead to tax cuts in the future.

Well if it's not settled, then sue them for the money+interest+damages - it's been shown that a large group of tax avoiders can pool up relatively small amounts and delay things for many years, you can still do that, just don't expect to hold onto the money in question. And why should you? Bank robber won't be allowed to keep the allegedly stolen money whilst there are legal proceedings, why should you expect the same when using DOTAS number which is a big red flag with words - "I ROBBED THE TREASURY BLIND".

Generally there is evidence against the bank robber. In this case, it would be like catching a bank robber with a big bag marked "SWAG". Then seeing everyone with a similar bag has to hand over their money because they have a bag that looks like one a bank robber had.

[AtW]

The upshot will be that there won't be as many cases coming up because no-one will have the spirit or money to fund a challenge any more.

Very good, this should hopefully lead to tax cuts in the future.

That's exactly what HMRC want people to think. Well done.

Well if it's not settled, then sue them for the money+interest+damages - it's been shown that a large group of tax "avoiders" can pool up relatively small amounts and delay things for many years, you can still do that, just don't expect to hold onto the money in question. And why should you? Bank robber won't be allowed to keep the allegedly stolen money whilst there are legal proceedings, why should you expect the same when using DOTAS number which is a big red flag with words - "I ROBBED THE TREASURY BLIND".

[DirtyDog]

They have got legal right to do that in time that was allowed to them (6 years I think). I believe High Court answered that question anyway, basically saying that there is no obligation on HMRC to challenge such schemes quicker than they did (as long as it is within allowed time it's ok).

To then moan that the cases take a long time to come to court is taking the piss then. The way to stop them dragging on is to do things quickly. However, the approach that HMRC want to take (and will take because there's no chance that anything is going to stop this legislation) is that they should have the money up front because the cases take a while to drag out.

The upshot will be that there won't be as many cases coming up because no-one will have the spirit or money to fund a challenge any more.

What's more important is that even if HMRC challenged schemes on day 1 it would still be long legal battle, so it's entirely reasonable for them to ask to deposit tax for cases that close to those that have already been settled. Don't like it? Don't get into DOTAS scheme, simples. And if you were in DOTAS scheme then you are getting what you deserved - nobody put a gun to your head to do that, in fact I've noticed some people jumped from one scheme to another showing complete contempt of the system, well - you are reaping what you have sown.

That's exactly what HMRC want people to think. Well done.

[AtW]

In fairness however it should be said that Vodafone should be paying significantly more tax than they are.

I agree, but it's a different discussion - just because somebody else does not pay their taxes does not mean you should not.

They have better lobbyists, though. How else do you not only avoid paying £6bn but you also get an agreement that HMRC will leave you alone and you can continue to use the scheme?

Yes for sure. For the record - I don't like that and HMRC should be pressured to make those big companies pay tax in full even if that bankrupts them in process, same as when it comes to individual taxpayers.

[DirtyDog]

In my view they should recoup it.

In fairness however it should be said that Vodafone is already paying a lot of taxes and provides employment to tens of thousands and services to millions of customers - that's not the same case as some guy pretending he is not a full time employee and using fake loans to disguise renumeration.

In fairness however it should be said that Vodafone should be paying significantly more tax than they are. The difference is that they took Dave Hartnett out for a few drinks and he ignored the lawyers and wrote off the bill. It's not the same as someone using loans to disguise employment, they used a pretend company in Luxembourg to funnel the money through. Some would suggest that this is on a bigger scale.

They have better lobbyists, though. How else do you not only avoid paying £6bn but you also get an agreement that HMRC will leave you alone and you can continue to use the scheme?

[AtW]

So there should be an incentive for HMRC to come to trial quickly, then, rather than dragging it out and hoping that people lose the will to fight, which seems to be their current modus operandi.

They have got legal right to do that in time that was allowed to them (6 years I think). I believe High Court answered that question anyway, basically saying that there is no obligation on HMRC to challenge such schemes quicker than they did (as long as it is within allowed time it's ok).

What's more important is that even if HMRC challenged schemes on day 1 it would still be long legal battle, so it's entirely reasonable for them to ask to deposit tax for cases that close to those that have already been settled. Don't like it? Don't get into DOTAS scheme, simples. And if you were in DOTAS scheme then you are getting what you deserved - nobody put a gun to your head to do that, in fact I've noticed some people jumped from one scheme to another showing complete contempt of the system, well - you are reaping what you have sown.

[AtW]

It's not unreasonable for HMRC to recoup £6bn from Vodafone, but they haven't done that (nor will they).

In my view they should recoup it.

In fairness however it should be said that Vodafone is already paying a lot of taxes and provides employment to tens of thousands and services to millions of customers - that's not the same case as some guy pretending he is not a full time employee and using fake loans to disguise renumeration.

[DirtyDog]

Irrelevent. It also assumes that the very rich will not be affected by this.

No it doesn't.

Unless you're suggesting that we start means testing everyone to decide how much of an impact it will have, and then decide whether they should place the amount in question into escrow?

No, I'm suggesting that when HMRC win something, then they get the money. Until they win, then they shouldn't have the right to bankrupt people.

Besides, with the cuts in government spending and drive to reduce deficits, are you suggesting that people witholding taxes has no effect on government spending? Arguably it has a larger effect, as it hits a larger number of people.

If HMRC lose, then they are going to have to repay the money anyway with interest. If they win, then they get paid with interest. So, the net effect is nil. The impact on the individual that they chose wrongly to bankrupt is immeasurable.

There is an argument to say that you own that house BECAUSE of avoiding paying tax, that you have already enjoyed the benefit of not paying the tax, and why should you be able to continue enjoying those benefits while in dispute.

Well, that's HMRC's argument, yes.

And let's not forget, if they have already proved that a mechanism is false, and by looking at the mechanics of a second scheme see it works in the same way, then in reality this will happen anyway, it will just take longer and cost taxpayers more.

The price of justice is a pain we all have to bear. I'm of the "innocent until proven guilty" school of thought, though - I'd rather have something proved in court than someone at HMRC saying "this is similar, give us everything you have, and we'll give it back if you can prove us wrong, which will be easy when you have no money".

Hyperbole. Yes, of course, the nasty old HMRC will just look at you and say "All is ours". They use the same calculation as employed at present when deciding the amount of tax due, except now they would run that calculation at the start of the process instead of 10+ years later when they manage to drag the scheme into proceedings.

I don't see it that way - I think that there are people who would be caught by this who would have to pay enough money to bankrupt them. I also think that there are some cases where HMRC would be wrong in saying "this scheme is identical to that scheme, so pay up".

As for making it impossible to fight... Surely the scheme providers have all promised to fight on their members behalfs? And they are all upstanding organisations. It's not like they're scam artists.

Irrelevant. If the individual wants / needs to fight it, and they have no money left to fund that defence, then it follows that they won't be able to do fight the case.

[stonehenge]

Wow!

Posting this in General.

Brave man...

Nah, they're all pussies here.

[Ticktock]

The difference being that if I hold on to my money and am proved wrong, the cost to the other party is negligible and can easily be compensated with via charging interest.

Irrelevent. It also assumes that the very rich will not be affected by this. Unless you're suggesting that we start means testing everyone to decide how much of an impact it will have, and then decide whether they should place the amount in question into escrow?
Besides, with the cuts in government spending and drive to reduce deficits, are you suggesting that people witholding taxes has no effect on government spending? Arguably it has a larger effect, as it hits a larger number of people.

If HMRC hold demand money that I haven't got, take my house and everything I own, force me into bankruptcy and then turn round and return the money because they were proved wrong, there is very little they can do at that stage to compensate.

There is an argument to say that you own that house BECAUSE of avoiding paying tax, that you have already enjoyed the benefit of not paying the tax, and why should you be able to continue enjoying those benefits while in dispute.
And let's not forget, if they have already proved that a mechanism is false, and by looking at the mechanics of a second scheme see it works in the same way, then in reality this will happen anyway, it will just take longer and cost taxpayers more.

Once HMRC take everything because that's what they estimate the tax take to be (on whatever basis they use to determine how much is owed), they also make it nigh-on impossible to fight - so HMRC get the headlines of how they must be right because no-one has successfully challenged them.

Hyperbole. Yes, of course, the nasty old HMRC will just look at you and say "All is ours". They use the same calculation as employed at present when deciding the amount of tax due, except now they would run that calculation at the start of the process instead of 10+ years later when they manage to drag the scheme into proceedings.
As for making it impossible to fight... Surely the scheme providers have all promised to fight on their members behalfs? And they are all upstanding organisations. It's not like they're scam artists.