Reply to: Reporting advisers

[malvolio]

Another point worth making is that a 90% retention is entirely possible, if you only charge a small amount to your client such that your total earnings sit below the taxation level. It's not feasible in the real world to do that, but legally it blows a hole in the "misleading statement" argument.

As has been said, the advisors who didn't give fair warning of potential risks are the immediate target.

[RokkieContract]

Difficulty

I think you will have difficulty in pursuing any actual claim. Ultimately the PI provider will have far more resources at their disposal and given the size of the potential liability involved will fight ti death. The PI I suspect is relatively concentrated between a few parties if indeed the advisers had any.

https://www.step.org/news/tax-adviso...t-scheme-risks

[GreenMirror]

This makes me incredibly angry - that people are STILL being recruited onto these schemes! They need to be warned off - as I wish I was back in 2013!!!

CUK have been running a high profile campaign since 2008.

If only more people read CUK.

And CUK is already preparing for the next battle - see the sub-forum "the future of contracting" started by cojak.

[webberg]

Perhaps the companies are being very careful in how they market themselves externally. Bet we all know on this forum that to offer 90% take-home rate MUST be tax-avoidance, which Mr Stride has deemed as "not legal".

I'm tempted to name and shame, although Mod would probably pull it, and it may be defamation

I could put up perhaps 2 dozen links to websites offering high take home rates. I think the majority are achieving that by reducing tax.

That is not illegal and Mel Stride (who is not to my knowledge a lawyer, nor quoting a legal source) is almost certainly mistaken in his statement that it is.

The rule is caveat emptor.

If you know it's tax avoidance then be prepared to defend it.

[Dmac]

HMRC does not have any powers to close down commercial businesses.

They can investigate and they can raid premises and businesses they believe are perpetrating fraud, but offering tax planning is perfectly legitimate and commercial.

So HMRC has no powers and no reasons to act. If they did so, they would be acting illegally.

You might want to try Trading Standards at your local Council or perhaps another Government department.

You might also want to raise this with your MP.

Perhaps the companies are being very careful in how they market themselves externally. Bet we all know on this forum that to offer 90% take-home rate MUST be tax-avoidance, which Mr Stride has deemed as "not legal".

I'm tempted to name and shame, although Mod would probably pull it, and it may be defamation

[webberg]

HMRC does not have any powers to close down commercial businesses.

They can investigate and they can raid premises and businesses they believe are perpetrating fraud, but offering tax planning is perfectly legitimate and commercial.

So HMRC has no powers and no reasons to act. If they did so, they would be acting illegally.

You might want to try Trading Standards at your local Council or perhaps another Government department.

You might also want to raise this with your MP.

[Dmac]

Why aren't they closed down

Unbelievable! The one which "convinced" me to sign up in 2013 is still live and recruiting, with a live website!

Still quoting things like
"We can help you take home up to 90% of your pay after tax."
"Supported by leading tax counsel opinion"
"Full HMRC compliance"
"We regularly consult leading tax specialists to ensure our services are in line with current legislation."
"Our solutions are 100% HMRC compliant and are tried and trusted by 1000s of contractors"

HMRC have all the evidence they need NOW to proceed to close them down and prosecute - why are these not being shut down?

And there are no risk warnings? That must be unlawful, isn't it? No regulator quoted on their website though.

This makes me incredibly angry - that people are STILL being recruited onto these schemes! They need to be warned off - as I wish I was back in 2013!!!

[webberg]

No...quite the opposite in fact....but who do I take the case to? the ICAEW ?????

Find which body regulated your adviser. read their procedures and start there. Look to engage a lawyer if necessary

[Calmbeforethestorm]

Again, the date you were in the scheme does not matter.

Did you have an adequate risk warning or not?

if not, you have a prima facie case.

No...quite the opposite in fact....but who do I take the case to? the ICAEW ?????

[webberg]

Point taken, anyone in a loan scheme after 2010 could have some sort of case, mine would date back to 2005 or even 1996 long before all this stuff was a twinkle in the taxman's eye.....save only the old padmore case which was around then I think.

Again, the date you were in the scheme does not matter.

Did you have an adequate risk warning or not?

if not, you have a prima facie case.

[Calmbeforethestorm]

With respect, you're missing the point.

You would be suing an adviser - or more strictly claiming against their PI cover - because they failed to give you adequate risk warnings. Instead they bought the line from the promoters about being "legal and compliant".

An adviser from one of the professional bodies will have to show that they told you of the risks, including prospective legislation that has retrospective effect, and that you had understood them.

If they cannot show that (bearing in mind that one well known promoter has already lost such a case in Court), then you have cause and potential claim.

Point taken, anyone in a loan scheme after 2010 could have some sort of case, mine would date back to 2005 or even 1996 long before all this stuff was a twinkle in the taxman's eye.....save only the old padmore case which was around then I think.

[webberg]

With respect, you're missing the point.

You would be suing an adviser - or more strictly claiming against their PI cover - because they failed to give you adequate risk warnings. Instead they bought the line from the promoters about being "legal and compliant".

An adviser from one of the professional bodies will have to show that they told you of the risks, including prospective legislation that has retrospective effect, and that you had understood them.

If they cannot show that (bearing in mind that one well known promoter has already lost such a case in Court), then you have cause and potential claim.

[Calmbeforethestorm]

The case law in Huitson etc was quite clear after 2010 on retrospective law and after the DR rules
Certainly, the shop should have been shut up then by these "experts"

Agreed, anyone in a loan scheme after 2010 is a sitting duck.

[QCApproved]

The case law in Huitson etc was quite clear after 2010 on retrospective law and after the DR rules
Certainly, the shop should have been shut up then by these "experts"

[Calmbeforethestorm]

Our view (admittedly we're not lawyers so at best an educated guess) is that an adviser who has failed to give adequate risk warnings is potentially liable and open to legal action for a period that begins with the establishment of the loss.

Failing to warn that arrangements can be overturned by subsequent legislation is (in our uninformed opinion) still a failure.

Bear in mind that the claim will be against the insurance carried by the firm and that remains valid.

It seems that you may have up to 15 years to make a claim.BUT.... it might be incredibly difficult to sue someone who will argue they couldn't foresee the changes in the law.That said, IMHO anyone using a scheme with a DOTAS number ( mine didnt as it predates those) should have been warned they might be attacked in future....or else why assign a number?