Reply to: Using a scheme (Non DOTAS) in the last 1-2 years - Help needed to rectify

[flamel]

Before this, moves by HMRC to recover money from debtors (e.g. bankruptcy) could not include the debtors' pension funds, because these were (mostly) locked in. With the new legislation, pension funds become fair game for HMRC to seek to recover from debtors - just another asset to be liquidated ...

Although I'm worried about this, after Raithatha v Williamson, this has yet to be fully decided in court other than in a situation where someone wilfully tried to avoid their creditors by chucking a huge lump of cash into their pension fund.
It used to be the case that if a bankruptcy order is made all pension schemes that have been approved by HM Revenue and Customs remain outside a bankrupt's estate (i.e. most pension schemes by High St providers). This means they cannot be claimed by the trustee in bankruptcy following the introduction of the Welfare Reform and Pensions Act 1999.

However, if you able to elect to drawdown then the court may force you to do this, taking reasonable family living expenses into consideration.

The decision in Raithatha v Williamson, where the bankruptcy trustee gained the right to claim against Michael Roy Williamson’s £1m pension fund to repay creditors has, effectively been clouded.
High Court decision leaves pension bankruptcy rules in limbo - FTAdviser.com

No doubt our dear friends at HMRC will try to get at entire pension funds in the future but this is by no means certain at this time.
As ever, get professional advice on this one, before the wolves knock on the door.

[DonkeyRhubarb]

I think the Government are secretly happy for people to blow their pensions now if it brings in some extra tax and the spending boosts the economy.

Everything these days seems to be about kicking the proverbial can up the road.

[dangerouswhensober]

The real scary one is pensions "REFORM".

You have people who can now draw their entire pension and use it as they wish. Anything over 25% of the pot is taxable income. Gideon is relying on lots of people paying tax on this so that he can cover cheques he's already written. These pensioners are going to be ripped off. they will get hammered by the discount applied by the insurance companies, fees from advisers, the tax bill (assuming they've been told it exists), etc.

I guarantee that in 5 years time the "pensions mis-selling scandal" will be everywhere.

I absolutely agree with that sentiment Webburg - and, it also occurs to me that there is one other hidden motive for this Government move to allow pensions to be unlocked. Before this, moves by HMRC to recover money from debtors (e.g. bankruptcy) could not include the debtors' pension funds, because these were (mostly) locked in. With the new legislation, pension funds become fair game for HMRC to seek to recover from debtors - just another asset to be liquidated ...

BTW - Thanks for all your valuable advice over the past few months :-)

[webberg]

See webberg's post

I'm not sure any contractor can rest easy until this lot lands somewhere

Not just contractors. Just about any scheme with tax incentives is being dragged into the mire.

Enterprise Zones - finished in 2008/9 or so. I'm looking at 4 schemes HMRC allege, 8 years after the event, are tax avoidance.

BPRA - looking at 3 schemes, none less than 4 years old.

Film schemes - looking at perhaps a dozen, most 10 years +

Cash extraction schemes, phantom contracts schemes, missing PAYE operators, dual contracts, share schemes, all waiting in the wings.

The real scary one is pensions "REFORM".

You have people who can now draw their entire pension and use it as they wish. Anything over 25% of the pot is taxable income. Gideon is relying on lots of people paying tax on this so that he can cover cheques he's already written. These pensioners are going to be ripped off. they will get hammered by the discount applied by the insurance companies, fees from advisers, the tax bill (assuming they've been told it exists), etc.

I guarantee that in 5 years time the "pensions mis-selling scandal" will be everywhere.

Unfortunately, people see that big lump of cash, think that they've earned it and should be able to enjoy it, assume that as a pension its not "really" taxable. Greed or need kicks in with the selective deafness to wiser heads and Robert is your mother's brother.

Not only will advisers make more fees sorting out the pensions scandal in 5 years time, but all of us still working will have a higher welfare bill as the pension money disappears.

[flamel]

See webberg's post

Just listening to radio 5 live and Ed Ballsis promising that if Labour get in they will give more power to HMRC in relation to tax avoidance. So how much further can they go?

Off the top of my head:

1. Ability to raid bank accounts/sell assets
2. Ability to force contractors to deduct tax (like the construction industry several decades ago)
3. Refusal of expenses claims
4. Force information from contractors as to who was paid what
5. Prevent any contractor from having an EBT or share scheme or access to any tax planning
6. Introduce a system of pre approval or blocking
7. Impose a minimum effective rate of tax for all
8. Introduce a pre FTT tribunal that HMRC control and operate
9. Introduce the long promised "anti Ltd" rules
10. More retrospective rules
I'm sure this is not a comprehensive list.

I'm not sure any contractor can rest easy until this lot lands somewhere

[DotasScandal]

Not really sure what you're getting at ?

What he's getting at is that when you're up against someone who has a time machine, absolutely anything can be done to you retrospectively.

[MrO666]

now this sounds very familiar.

Not really sure what you're getting at ?

I run a UK Ltd company, taking a combination of salary (not minimum wage), reasonable expenses (all verified with receipts) and an annual dividend (yes, I take 1 divi a year). I've got QDOS TLC35 insurance, and they have verified my contracts to all be outside of IR35. If they're wrong, then the insurance covers the costs and liability.

My books are then ratified by a large accountancy before accounts are submitted to HMRC.

If you (or anyone) can find fault in that, then it means that more or less every UK Ltd company is being run illegally.

My main point is, I can sleep easily at night now knowing without question that HMRC won't come knocking on my door asking for a fortune. The very worst is they might dispute the odd expense, which is pennies.

[DotasScandal]

Look at the forum here. Divided by provider. That is for some good reasons but to form a fund and bring together the 100's needed to fund a fight, needs everybody to work together. That has been tried on things like JR for APN and there is NO INTEREST.

The split by provider is historical - it dates back to 2013 or so, when HRMC started their campaign against contractor schemes.
Back then, each provider had their individual plans and strategy to respond, so it made sense indeed to keep threads separate.

APNs of course caused a total paradigm shift, which has yet to be fully comprehended by many.

With that said, the "Saleos" JR is moving forward, with several thousands on-board already, and growing. As said elsewhere, the JR is a side-show, the real battle will be in court, and many will not go down without fighting - if only because they have too much at stake. We're talking people that litterally do not have any other option but to fight back. The momentum won't stop at the JR.

You are absolutely right in that everyone needs to work together now - and unfortunately, collaboration is not something that comes easily to freelancers who are used to doing their own thing in their corner. One needs only look at these forums, where it's Ltd Contractor against Scheme Contractor, against... etc. If Gauke and friends are reading, they must be laughing at how we are so divided that they do not even need to apply their usual divide and conquer tactics. Will they have the last laugh? only time will tell.

But you will find that necessity is quickly changing that mentality.

It needs an NTRT type campaign.
Volunteers?

That is what we have been trying to do with dotas-scandal.org back in 2014, and still doing now. There are other groups out there and bridges are being built. It is not all online.

Of course, more help is needed. Everyone with skills, contacts, or simply good will is welcome to join forces with us.

[LandRover]

No one has been misled. They wanted a scape goat and found us as easy targets.
http://www.taxation.co.uk/taxation/b...et-little-guys

They were all quite until avoidance was available for only elite and politicians. Gauke's wife, Cameron's dad all were involved. Now we are just being crushed to win election.

Agree completely. It's ok for Gauke's wife and even himself prior to being an MP.

David Gauke Worked For Tax Avoidance Firm*-* GuidoFawkes

No doubt nearly all of the rotten lot have taken advice from accountants. Yet how dare any of the proletarians be offered such advice that should be exclusive to the establishment. We are easy pickings, low hanging fruit that can be hammered and vilified. No doubt many will be ruined but who cares in the establishment? The quality of MP's is clear to see, there was hardly any questioning and serious debate about the legislation given to HMRC. As people we are governed by intellectual pygmies who are self-serving and loathsome in their hypocrisy.

[MercladUK]

I run a ltd and I keep circa 70%, all 100% above board, I would open my books to any inspector and not be in the slightest bit concerned.

now this sounds very familiar.

[DotasScandal]

They were all quite until avoidance was available for only elite and politicians. Gauke's wife, Cameron's dad all were involved. Now we are just being crushed to win election.

I think that is a very good point. In their eyes, our moral fault and sin is not "tax avoidance" at all, it is... to have indulged in something reserved for members of the club, without belonging to the club!!!
And that cannot be allowed, lest it should give ideas to others.
That is why the punishment is so ferocious and merciless.

[StrengthInNumbers]

To be fair, it is highly likely that the senior bods at HMRC and certain MPs have been misled into thinking that we all earn £262,000 p.a. by some consultant / analyst and the consequences of bankrupting individuals was never thought about.

No one has been misled. They wanted a scape goat and found us as easy targets.
http://www.taxation.co.uk/taxation/b...et-little-guys

They were all quite until avoidance was available for only elite and politicians. Gauke's wife, Cameron's dad all were involved. Now we are just being crushed to win election.

[StrengthInNumbers]

I run a ltd and I keep circa 70%, all 100% above board, I would open my books to any inspector and not be in the slightest bit concerned.

And what is the average Joe's take home percentage under PAYE ?
Mate you don't need to answer and give figures. I am just trying to point out how take percentages is the wrong argument.

[flamel]

With no incentive to reach a settlement this is the only sensible course of action.

I can fully understand why some people choose to settle. Around 500 of the 2,500 in our scheme have done so.

Closure/finality/moving on with your life. Everyone wants that.

However, settling and paying up in full is a high price to pay merely on the basis that HMRC say a scheme doesn't work. (As if they would ever say anything else!)

At the end of the day it comes down to individual choice, and we should respect whatever people decide.

Agree with this sentiment, it is a personal choice dependent on individual circumstances and everyone wants certainty.
It's also the size of an individual's liability. If each of us was on the hook for £100 then rightly or wrongly, we'd all pay and get on with our lives. The same would probably apply if it were £10,000.
If the amount is beyond your ability to pay then that creates a whole different ball game as certainty is out of reach, for the moment at any rate.

To be fair, it is highly likely that the senior bods at HMRC and certain MPs have been misled into thinking that we all earn £262,000 p.a. by some consultant / analyst and the consequences of bankrupting individuals was never thought about.

[MrO666]

For all including Mr0666
1) what is take home percentage with a limited company

2) a couple fought all the way to House of Lords in 2006/7 against HMRC. Even when HMRC won in lower courts. And because of their fight today many couples run limited companies. What would the world be if no one stood against what is wrong because opponent has deep pockets?

I run a ltd and I keep circa 70%, all 100% above board, I would open my books to any inspector and not be in the slightest bit concerned.