Reply to: Tax Schemes - Agencies being hit

[Iliketax]

Do you think that the arrests were in respect of a contractor scheme?

I think that the COP9's include a reference to an entity with "Employment Services" in its name but I don't know whether contractors participated in this. HMRC's press release just mentions "a complex scheme involving offshore trusts used by professional financial advisers to facilitate UK individuals to avoid around £132m in income tax"

[JaredM]

I.e. HMRC again acting like little children trying to cover up some mischief they did - except they have real and loaded weapons at their disposal to wipe out any and all inconvenient witnesses. No toy guns here.
It really blows the mind that this charade is allowed to go on and on and on like it does. Run for cover, and run as far as you can.

I'm sure you've all seen this posted on another thread: https://www.gov.uk/government/upload...egislation.pdf and this little nugget (emphasis is mine):

For commercial reasons, or in some cases to avoid having to apply this legislation, it is possible the agency or third party contracting with the PSC could be resident outside the UK. The government thinks that in this scenario the liability should fall on the last party in the chain which is resident in the UK.

Based on that, I can't see HMRC getting away with hitting the end-client or every agency in a chain?

[DotasScandal]

HMRC is trying to hit everybody who might be connected with the mess they have been instrumental in creating because sooner or later some media wannabe on PAC is going to twig that he/she might get a few more votes if they show that HMRC are inefficient/incompetent/not fit for purpose. When that accusation comes they want to show that they have covered all bases.

I.e. HMRC again acting like little children trying to cover up some mischief they did - except they have real and loaded weapons at their disposal to wipe out any and all inconvenient witnesses. No toy guns here.
It really blows the mind that this charade is allowed to go on and on and on like it does. Run for cover, and run as far as you can.

[webberg]

There is an inevitable element of mud slinging here.

HMRC is trying to hit everybody who might be connected with the mess they have been instrumental in creating because sooner or later some media wannabe on PAC is going to twig that he/she might get a few more votes if they show that HMRC are inefficient/incompetent/not fit for purpose. When that accusation comes they want to show that they have covered all bases.

For periods beyond the reach of retrospective determinations, the easiest target remains individuals.

[BrilloPad]

Amazing anyone still using anything other than Limited or Umbrella.

[JaredM]

Sounds to me like HMarse are reacting to the IR35 consultation results:

1. Hit some big end-users with PAYE penalties => "Oh this wouldn't happen if you'd used our wonderfully clear digital tool that'll tell you who to run PAYE for (hint: everyone)."
2. Threaten agencies with the same => "Oh you still want to use PSCs and Umbrellas do you?'

Create enough legal uncertainty and hey presto: it just won't be worth the 'risk' of using contractors anymore. Funny how that works.

[AtW]

I'm not sure what international agreements are that would allow this and whether it can agreed that these are debts

For example: https://e-justice.europa.eu/content_...gment-52-en.do

EU is easy, used it once.

Australia -

Enforcing UK judgments in Australia - International Law - Australia

"Australia and the United Kingdom have a reciprocal arrangement for the enforcement of judgments. Consequently, money judgments of most UK courts, which satisfy certain criteria, may be enforced in Australia by registration under the Act."

USA might be more difficult, but then again IRS might also take a dim view of people getting loans instead of salary and dodgy not only UK taxes but also US ones.

So enforcing is very much possible, especially for somebody like HMRC who got unlimited resources and could do it to make a point for others.

-------

In regards to this 2019 charge the question is whether UK is actually able to tax people who are no longer tax resident in UK even though those loans appeared at the time when the person was tax resident, I am not a lawyer but if I had to guess that would be very hard if possible at all.

The American embassy owes millions in unpaid congestion charges according to the Mayor of London however they define it as a local tax to which they are exempt.

They've got diplomatic immunity and convention protects them from local taxes, so obviously their courts won't allow any UK court judgements to override that.

[QCApproved]

yep the Psy ops mean who stare at goats crew its good you remind us of them their directors names should be more high profile given the insidious way in which they make a living.
Hopefully the aussies and kiwis will pick up on that too if they are asked to pursue.

[DotasScandal]

again it does not reflect well on HMRC that they appear to be struggling to enforce their policy

With all the public money they throw at expensive behavioural psycholgy "experts" (hello Behavioural Insight Ltd. ) you'd think they'd have gained some basic understanding by now and adopted a course of action a tad more sophisticated than "harrass, threaten, bully, and hope that they fold"
Alas, there seem to be many people at HMRC that simply can never learn.

[QCApproved]

I'm not sure what international agreements are that would allow this and whether it can agreed that these are debts
The American embassy owes millions in unpaid congestion charges according to the Mayor of London however they define it as a local tax to which they are exempt.

Most of the contractors I knew of were foreigners - I think huge sums will not be recovered. No one I spoke with this morning intends to pay until their local authorities approach them. We wish them well but again it does not reflect well on HMRC that they appear to be struggling to enforce their policy

[AtW]

They just won't be able to enforce payment assuming people don't have assets in the UK...

1. Get UK court order for the debt.

2. Use international agreements on enforcement of debt court orders.

[eek]

The drain of contractor talent will accelerate if the April 2019 charge arrives as advertised.

Whilst HMRC think that they will be able to issue assessments to non resident people who have not repaid loans by the above date.

Such extension of UK tax territory is likely to be poorly received by non UK jurisdictions?

Well they will be able to issue assessments... They just won't be able to enforce payment assuming people don't have assets in the UK...

[webberg]

The drain of contractor talent will accelerate if the April 2019 charge arrives as advertised.

Whilst HMRC think that they will be able to issue assessments to non resident people who have not repaid loans by the above date.

Such extension of UK tax territory is likely to be poorly received by non UK jurisdictions?

[QCApproved]

It will be interesting to see what the European Tax Authorities do. I went to one promoter function and most of the people out of 70 or 80 were non UK, some have stayed a lot haven't most likely.

[webberg]

Most double tax treaties cover the way in which income is divided up between countries for tax purposes and where tax credits etc are to be applied. Very few go on to include an agreement for the collection of tax in one country, allegedly owed to the other country.

I have also spoken with the ATO (Australia) recently. When asked if they would collect from an Aus citizen an amount owed to the UK, the answer was a definitive "no". They say that they will collect Aus tax from Aus residents and that's it.

The proposed April 2019 tax charge threatens to issue to non resident people an assessment and demand. That breaches any number of constitutional protections and again I can't see the ATO/IRS etc taking kindly to that.

For Reg 80 determinations, I think the time limit is 4 years? Be interesting to see if backdated determinations are raised.