Reply to: HMRC Discussion Document : Strengthening Tax Avoidance Sanctions & Deterrents

[DonkeyRhubarb]

Yes I mentioned this section before DR - is is the case that the settlement triggers it - is it part of the settlement or not to agree that the avoidance does not work or can it remain undecided ?

Don't know but anyone settling would need to be careful. There is certainly a potential trap there for the unwary.

[LondonManc]

If schemes are dead come 2019, surely it's better to lobby for proper taxation levels.

DotasScandal talked about the Singapore tax system - perhaps demonstrating the benefits of that would be better? Things like millions saved in NOT chasing scheme users, a simpler collection system, more money released into the home economy by contractors who can get the money out of their LtdCo more easily for example.

[neil99]

Strengthening Tax Avoidance Sanctions and Deterrents: A discussion document
https://www.gov.uk/government/upload...n_document.pdf


http://www.accountingweb.co.uk/tax/h...dance-enablers

Recruiters promoting public sector contracts that are allegedly outside or IR35. I wonder where that sits ? Given the PAYE/NIC liability falls on them or their clients.

[difficulttimes]

Sounds like they are pushing everyone to the 2019 tax charge.. that's where they want all the contractors.

[QCApproved]

Yes I mentioned this section before DR - is is the case that the settlement triggers it - is it part of the settlement or not to agree that the avoidance does not work or can it remain undecided ?

[DotasScandal]

Gotta "maximize the amount of tax due"...right?
It's HMRC's new mission statement, right there in their own documents for all to see.

[DonkeyRhubarb]

There are also proposed penalties for users in section 3.

Even settling carries a risk.

4.4 The draft legislation in Finance Bill 2016 defines a relevant defeat as
arrangements in relation to which there is a final determination of a tribunal or
court that the arrangements do not achieve their purported tax advantage, or, in
the absence of such a decision there is agreement between the taxpayer and
HMRC that the arrangements do not work.

[DotasScandal]

It's called the asylum.

[needmorstuff]

where do they even dream this stuff up.

[QCApproved]

LondonManc - They don't have to deem it tax evasion, but aggressive tax avoidance - a term which has yet to be pondered by the judiciary or found in legislation.
This is a term HMRC and that counter-conservative Gauke are very comfortable with though

[QCApproved]

The only certainty around tax at the moment is there is none for any participator. The degree of uncertainty seems to correlate to how soft a target you are. We are on a slippery slope that the judiciary must check. They will be taking haircuts from bank accounts next to top up funds. Litigating the schemes is now a sideshow to bigger issues that probably do offer causes of action.
For years HMRC staff have been exiting and have had carte blanche to be involved in setting these schemes up. The implied model being that they have the inside knowledge to deliver and execute them. I would hold such an individual to a higher standard of accountability than some of the other "advisors". What are the professional conduct implications now of leaving HMRC to advise on avoidance, how is it defined going forwards? Is there a meaningful rump of tax work to be done outside obvious things like Expat tax and VAT/Indirect Taxes??

[DotasScandal]

Perhaps if they were fairer in allowing us to compete financially with larger consultancies, there would be less appetite to get drawn into these "schemes" in the first place.

Perish the thought.
That's not how crony capitalism (of which Osborne is the poster child) works.

The "schemes" only exist because in the UK because:
1/ there is no straightforward and economical way for a contractor to work
2/ the legal framework is (deliberately?) labyrinthine enough to allow them to exist
3/ the tax levels are punitive

Look at Singapore, for example: Intelligible tax system. Max level of income tax, 20%. "Schemes" do not exist, because they don't need to.

[LondonManc]

So, in summary, tax avoidance is legal until HMRC deem it tax evasion and will destroy you.

Perhaps if they were fairer in allowing us to compete financially with larger consultancies, there would be less appetite to get drawn into these "schemes" in the first place.

[DotasScandal]

We'll tell you what this really means to "deter": litigation!

HMRC do NOT want the arrangements examined in court.
Repeat:
HMRC do NOT want the arrangements examined in court.

If they are, it will open a very smelly can of worms, raising all sorts of questions with regard to HMRC incompetence, inaction, and perhaps complicity during all these years - not to even mention their abusive use of APN powers.

So the last stunt they could come up with is to try and get accountants and promoters someway somehow to convince their clients or ex-clients to renounce litigation (as there's now the risk they're potentially on the hook if things go in favor of HMRC).

But this too shall fail.

[BrilloPad]

Then taxpayers should get an extra 100% if the scheme works. Its not a level playing field.

Which is very different from the situation now.