Exchequer Solutions owes £11m in unpaid taxes

[cojak]

Exchequer Solutions Ltd director Mike Lowndes steps down from FCSA, following £11million unpaid tax ruling on contractor expenses


https://www.contractoruk.com/news/00..._expenses.html

and what does this mean for contractors?

Exchequer Solutions Ltd and its £11million tax bill: are there implications for contractors and providers?



https://www.contractoruk.com/news/00...providers.html

The case of ESL v HMRC specifically focuses on tax years prior to 2016 when the rules around overarching employment practices changed.

However, there are a number of key points that remain valid today -- in 2022 -- that all umbrella providers would be wise to note to ensure that they are operating compliantly and in line with an ever-changing legislative landscape

[eek]

and what does this mean for contractors?


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In theory nothing as the money is owed by Exchequer and individual contractors aren't responsible.

The unknown (which is why I've not discussed this because no-one has a clue) is can HMRC do anything to recover the money they cannot claim from Exchequer? (Exchequer can probably pay £1-5m of the bill at most). Everyone I've spoken to seems to think that HMRC won't be able to do anything but no one is completely sure.

[TheDogsNads]

In theory nothing as the money is owed by Exchequer and individual contractors aren't responsible.

The unknown (which is why I've not discussed this because no-one has a clue) is can HMRC do anything to recover the money they cannot claim from Exchequer? (Exchequer can probably pay £1-5m of the bill at most). Everyone I've spoken to seems to think that HMRC won't be able to do anything but no one is completely sure.

That may have been the case until recently. Contractors who find their umbrella has gone bump owing the taxman might want to keep an eye on a certain tax case recently decided by the Court of Appeal which determined HMRC can shift the tax burden onto the end User.

Although an application to appeal to the Supreme Court has been made, it's by no means certain it will proceed, giving HMRC the power to go after the contractor.

[eek]

That may have been the case until recently. Contractors who find their umbrella has gone bump owing the taxman might want to keep an eye on a certain tax case recently decided by the Court of Appeal which determined HMRC can shift the tax burden onto the end User.

Although an application to appeal to the Supreme Court has been made, it's by no means certain it will proceed, giving HMRC the power to go after the contractor.

Hoey doesn't have anything to do with items here.

1) reason is the case is different (this is about expenses and not deliberately avoiding PAYE taxation)
2) the amounts per worker involved means that even were HMRC to pursue things it's going to be very difficult given how NI claims actually work..
3) Most of the cases will be time served given the time period these cases relate to.

Finally HMRC have been very clear here for a long period of time - if a legitimate umbrella goes belly up for business reasons (and this would be for business reasons given the technicalities this decision is based on) then HMRC won't pursue the contractors involved.

[TheDogsNads]

Hoey doesn't have anything to do with items here.

1) reason is the case is different (this is about expenses and not deliberately avoiding PAYE taxation)
2) the amounts per worker involved means that even were HMRC to pursue things it's going to be very difficult given how NI claims actually work..
3) Most of the cases will be time served given the time period these cases relate to.

Finally HMRC have been very clear here for a long period of time - if a legitimate umbrella goes belly up for business reasons (and this would be for business reasons given the technicalities this decision is based on) then HMRC won't pursue the contractors involved.

My word, you are naive to believe HMRC will stick to its word on such matters! I think the definition contractors should be careful about here is 'legitimate.' Who is the arbiter of what is legitimate insofar as taxation is concerned? Why, none other than HMRC!

We'll see in the fullness of time.

[eek]

My word, you are naive to believe HMRC will stick to its word on such matters! I think the definition contractors should be careful about here is 'legitimate.' Who is the arbiter of what is legitimate insofar as taxation is concerned? Why, none other than HMRC!

We'll see in the fullness of time.

Added to my ignore list for being one of those trolls who being stupid enough to use a tax avoidance scheme and now believes everyone else should suffer...

There are reasons why this isn't a tax avoidance scheme and why chasing the money won't be worth the hassle or even possible (one of which is that the case refers to a period so long ago most tax years are completely closed, another is that chasing the NI side of things requires HMRC spending money upfront, they can't just send a letter they need to create a court case).