High Take Home Pay Schemes - a warning

[geoff from contracta IOM]

The trouble is though Geoff is that you can't claim that something is 'compliant' if HMR&C don't approve; we all know that avoidance schemes are not illegal and that many of the problems surrounding the industry now have been created by badly thought out legislation. Unfortunately, the fact of the matter is that, even though HMR&C may not win in a court of law, the costs involved in defending your position would be enormous and they would not be recoverable, HMR&C have already used the concept of retrospective legislation to fight what they don't agree with and again, even if you win your case, they will legislate to ensure you can't use it in future without breaking the law. This industry seems to be in a position now where 'compliant' = what HMR&C decide at the time and we all have to find a way to work with that or be prepared to fight our corner

Agreed on some points but I have mentioned before that we insure our clients against an investigation by HMRC and the policy covers their accountants AND legal fees. HMRC will without doubt legislate to close this structure but the reality is that we are not at that point, when we will be is anyones guess and as much as HMRC would love to ride roughshod over fundamental legal principles our entire leglislative system is in grave danger if the LJ's find in favour of them in the BN66case without isolating the ruling and that is where I believe the problem lies. How do you tear up such a cornerstone of our justice system by retrospectively applying legislation, I notice they didn't try that with the EBT is this an indication of how unsure they are of the ground they are on ? For all the guys affected by BN66 I sincerely hope so !

[LisaContractorUmbrella]

Agreed on some points but I have mentioned before that we insure our clients against an investigation by HMRC and the policy covers their accountants AND legal fees. HMRC will without doubt legislate to close this structure but the reality is that we are not at that point, when we will be is anyones guess and as much as HMRC would love to ride roughshod over fundamental legal principles our entire leglislative system is in grave danger if the LJ's find in favour of them in the BN66case without isolating the ruling and that is where I believe the problem lies. How do you tear up such a cornerstone of our justice system by retrospectively applying legislation, I notice they didn't try that with the EBT is this an indication of how unsure they are of the ground they are on ? For all the guys affected by BN66 I sincerely hope so !

Would the insurance policy cover any tax that becomes payable as a result of the investigation?

With regard to the BN66 case - couldn't agree more

[geoff from contracta IOM]

Would the insurance policy cover any tax that becomes payable as a result of the investigation?

No but any policy that did would only encourage " creative declarations " by the policy holder

[LisaContractorUmbrella]

No but any policy that did would only encourage " creative declarations " by the policy holder

I can understand that but the policy doesn't therefore cover the individual from potentially huge costs as I would assume that it would not cover any interest or fines either?

[Steven@Parasol]

Would the insurance policy cover any tax that becomes payable as a result of the investigation?

With regard to the BN66 case - couldn't agree more

Geoff - is the insurance policy unique to yourselves?

It's interesting that some companies claim to be 100 per cent confident in their schemes but offering insurance in case of investigation would contradict this? I'm not referring to your scheme specifically.

[LisaContractorUmbrella]

Geoff you also stated that you know that HMR&C will legislate and close the scheme at some point - does that not give them more impetus to their arguments in favour of restrospection

[geoff from contracta IOM]

Geoff - is the insurance policy unique to yourselves?

It's interesting that some companies claim to be 100 per cent confident in their schemes but offering insurance in case of investigation would contradict this? I'm not referring to your scheme specifically.

Steven I might be 100% confident my house won't burn down but ..............................

[geoff from contracta IOM]

Geoff you also stated that you know that HMR&C will legislate and close the scheme at some point - does that not give them more impetus to their arguments in favour of restrospection

Lisa they might make the drink driving limit zero and I hope they do but if i'm stopped and breathalized tonight after half a pint can they come back if the legislation changes and prosecute me in two years time ?

[LisaContractorUmbrella]

Steven I might be 100% confident my house won't burn down but ..............................

Yes but the difference is that you would get back the money to rebuild your house and replace the contents - using your analogy, you might have some furniture but you'd have no house to put it in

[LisaContractorUmbrella]

Lisa they might make the drink driving limit zero and I hope they do but if i'm stopped and breathalized tonight after half a pint can they come back if the legislation changes and prosecute me in two years time ?

Personally Geoff I wouldn't put it past them