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Eric Mc
67,253 posts
134 months
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Interesting sales tactics - but what I would have expected.
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Manks
5,006 posts
91 months
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Tim330 said: .......The marketing of fear, based on partial truths from bad schemes........... Something that hasn't, as far as I am aware, been mentioned yet. There are a lot of accountants who promote their businesses by demonising some more sophisticated advisors and the tax authorities. They claim that the former are charlatans waiting to feed the unwary into the open jaws of the latter. As HAS been discussed before, some accountants seem to take the view that clients paying tax is good either because of their political views or because it makes their lives easier. Which is fine if the client knows what is going on, but very often they do not.
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Eric Mc
67,253 posts
134 months
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Accountants use fear as a sales tactic all the time.
Indeed, accountants themselves are also sold products (usually insurance related) using fear as the motivator.
Many, many times I have attended seminars or received cold calls from insurance bodies telling me that due to new government legislation or a new aggressive HMRC approach is going to put our clients or us at more risk etc etc etc.
It is a hoary old sales pitch and most of the time it isn't true.
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Manks
5,006 posts
91 months
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Eric Mc said: Accountants use fear as a sales tactic all the time.
Indeed, accountants themselves are also sold products (usually insurance related) using fear as the motivator.
Many, many times I have attended seminars or received cold calls from insurance bodies telling me that due to new government legislation or a new aggressive HMRC approach is going to put our clients or us at more risk etc etc etc.
It is a hoary old sales pitch and most of the time it isn't true. Yep. I am sure I once heard an accountant claim that HMRC would eat my first born child. And then they step in as the knight in shining armour, explaining how they have such a good reputation with / the respect of HMRC that I'd definitely be safe using them. One of my favourite "we work for our client, not the taxman" lines is: "We know how to deal with HMRC inspectors. We put them in the small office down the corridor there. The one with the broken window and no heating. They never stay very long and always give our clients a clean bill of health". I've heard it so many times it must be in an accountancy text somewehere.
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Tonsko
2,536 posts
84 months
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The IT Security industry uses FUD (Fear, Uncertainty, Doubt) to sell it's products too (Symantec, CA etc.). There has been a move to try and tackle this under ethics; the more reputable consultancies are starting to understand this and gradually it's shifting away from that. It doesn't surprise me that other industries use it too. It's a very powerful sales tool (and, as you say, most of the time they over-egg the pudding).
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Eric Mc
67,253 posts
134 months
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Manks said: Yep. I am sure I once heard an accountant claim that HMRC would eat my first born child.
And then they step in as the knight in shining armour, explaining how they have such a good reputation with / the respect of HMRC that I'd definitely be safe using them.
One of my favourite "we work for our client, not the taxman" lines is: "We know how to deal with HMRC inspectors. We put them in the small office down the corridor there. The one with the broken window and no heating. They never stay very long and always give our clients a clean bill of health". I've heard it so many times it must be in an accountancy text somewehere. I have found the opposite to work better - inundate them with offers of coffee, tea and biscuits. Overwhelm them with kindness - it catches them completely off guard. I have also found that if you engage with them on a subject close to their hearts - such as their work related grievances, you can get them on your side and they go easy on the client. Much better than antagonising them. I had a VAT inspector visit a client last year and we spent so much time gassing about how the VAT office was understaffed and how it was terrible that the Inland Revenue had "taken over" HM Customs and Excise (a pet moan of VAT Office staff)that he gave the client a really easy ride and found absolutely nothing. He even started offering VAT saving advice to the client (most of which was wrong, as it turned out). He left happier than when he arrived, even though he had achieved nothing.
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Manks
5,006 posts
91 months
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Eric Mc said: I have found the opposite to work better - inundate them with offers of coffee, tea and biscuits. Overwhelm them with kindness -0it catches themn completely off guard.
I have also found that if you engage with them on a subject close to their hearts - such as their work related grievances, you can them on your side and they go easy on the client. Much better than antagonising them.
I had a VAT inspector visit a client last year and we spent so much time gassing about how the VAT office was understaffed and how it was terrible that the Inland Revenue had "taken over" HM Customs and Excise (a pet moan of VAT Office staff)that he gave the client a really easy ride and found absolutely nothing. He even started offering VAT saving advice to the client (most of which was wrong, as it turned out). He left happier than when he arrived, even though he had achieved nothing. Have you tried sitting on their laps, rearranging their hair and saying how you've always found a powerful man totally irresistible?
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Eric Mc
67,253 posts
134 months
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Not gone that far - yet. It depends on how much in the way of distraction tactics I might want to utilise 
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Oakey
13,696 posts
85 months
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What is stopping these Trusts from just running off with all their clients money?
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rohrl
3,697 posts
14 months
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Oakey said: What is stopping these Trusts from just running off with all their clients money? If only, that would be hilarious. A bunch of tax-dodgers whining that the nasty man took their money.
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gingerpaul
2,751 posts
112 months
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rohrl said: Oakey said: What is stopping these Trusts from just running off with all their clients money? If only, that would be hilarious. A bunch of tax-dodgers whining that the nasty man took their money. Or what is stopping them calling in the loan. That's the bit that would terrify me about schemes like these.
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arfur
2,821 posts
83 months
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gingerpaul said: rohrl said: Oakey said: What is stopping these Trusts from just running off with all their clients money? If only, that would be hilarious. A bunch of tax-dodgers whining that the nasty man took their money. Or what is stopping them calling in the loan. That's the bit that would terrify me about schemes like these. One of them did last year ... And then refinanced it to the end client .. there was a refinancing cost associated that the end client had to pay.
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gingerpaul
2,751 posts
112 months
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arfur said: One of them did last year ... And then refinanced it to the end client .. there was a refinancing cost associated that the end client had to pay. What is to stop them saying "we need the money back now" and that being the end of it though? I don't know much about how these things operate but if you gift them the money and they loan it back then at some point there could conceivably be a scenario where they get their money back from you and you lose the money you gifted to them, no?
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Manks
5,006 posts
91 months
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gingerpaul said: arfur said: One of them did last year ... And then refinanced it to the end client .. there was a refinancing cost associated that the end client had to pay. What is to stop them saying "we need the money back now" and that being the end of it though? I don't know much about how these things operate but if you gift them the money and they loan it back then at some point there could conceivably be a scenario where they get their money back from you and you lose the money you gifted to them, no? I think that how the loan is made and the conditions of it are where the magic happens, and we may never find out the details.
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Eric Mc
67,253 posts
134 months
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Oh we will. Indeed, much of the way the K2 scheme is already out in the open.
HMRC have the full details of all these schemes - as they are required by law to have been supplied with copies of each and every scheme in place.
These schemes are not "magic" - they are just clever (and sometimes rogueish)manipulation of rules - rules which are accessable to all if they are bothered to do some simple investigation work.
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Wings
3,969 posts
84 months
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Eric Mc said: Oh we will. Indeed, much of the way the K2 scheme is already out in the open.
HMRC have the full details of all these schemes - as they are required by law to have been supplied with copies of each and every scheme in place.
These schemes are not "magic" - they are just clever (and sometimes rogueish)manipulation of rules - rules which are accessable to all if they are bothered to do some simple investigation work. Now how many pages, months ago Eric did i inform you of that, and just for the record Eric, addressing schemes such as K2 is for HMG to legislate against, AND NOT Eric HMRC. Now let me leave you Eric to your office chat.
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gingerpaul
2,751 posts
112 months
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Manks said: I think that how the loan is made and the conditions of it are where the magic happens, and we may never find out the details. I'm not specifically referring to K2 as there are various different schemes operating that do the same sort of thing. It's more the mechanics of how this works in practice that interests me. For example would a person who signs up know what those conditions? If so then then the details will be out there at some point soon I would think. If not then it really is a leap of faith that having gifted the money that you will receive a loan back. I know K2 is Jersey but I am aware of other similar schemes operating out of the Cayman Islands and Belize where it'd be much harder work to get your money back and therefore an even bigger leap. Again, assuming that the terms are clear that you won't have to repay the loan for a long period of time, say payable on death, then how long does that period of time have to be before it is classed as a non-repayable loan and tax is due on it? Ignoring morals and legalities I think it's fascinating personally. I am a bit odd though. 
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Eric Mc
67,253 posts
134 months
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Wings said: Eric Mc said: Oh we will. Indeed, much of the way the K2 scheme is already out in the open.
HMRC have the full details of all these schemes - as they are required by law to have been supplied with copies of each and every scheme in place.
These schemes are not "magic" - they are just clever (and sometimes rogueish)manipulation of rules - rules which are accessable to all if they are bothered to do some simple investigation work. Now how many pages, months ago Eric did i inform you of that, and just for the record Eric, addressing schemes such as K2 is for HMG to legislate against, AND NOT Eric HMRC. Now let me leave you Eric to your office chat. I'd reply if I understood what you were saying - sorry.
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Eric Mc
67,253 posts
134 months
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gingerpaul said: Manks said: I think that how the loan is made and the conditions of it are where the magic happens, and we may never find out the details. I'm not specifically referring to K2 as there are various different schemes operating that do the same sort of thing. It's more the mechanics of how this works in practice that interests me. For example would a person who signs up know what those conditions? If so then then the details will be out there at some point soon I would think. If not then it really is a leap of faith that having gifted the money that you will receive a loan back. I know K2 is Jersey but I am aware of other similar schemes operating out of the Cayman Islands and Belize where it'd be much harder work to get your money back and therefore an even bigger leap. Again, assuming that the terms are clear that you won't have to repay the loan for a long period of time, say payable on death, then how long does that period of time have to be before it is classed as a non-repayable loan and tax is due on it? Ignoring morals and legalities I think it's fascinating personally. I am a bit odd though. Like any sort of complex financial arrangement, the professionals who are setting it up and selling it to a client are under legal and professional obligations to explain in detail how these schemes work and the risks associated with such schemes. No doubt, the nasty details will be hidden in the smallest of small print and the most inpenterable language, making it tough for a lay person to fully comprehend. And all the "positives" will be trumpeted and emphasised. They will also make the client sign a waiver indemnifying the advisers from any losses arising if the scheme is subsequently found to be unlawful. Heads they win, tails they win.
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Steffan
6,178 posts
97 months
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Eric Mc said: gingerpaul said: Manks said: I think that how the loan is made and the conditions of it are where the magic happens, and we may never find out the details. I'm not specifically referring to K2 as there are various different schemes operating that do the same sort of thing. It's more the mechanics of how this works in practice that interests me. For example would a person who signs up know what those conditions? If so then then the details will be out there at some point soon I would think. If not then it really is a leap of faith that having gifted the money that you will receive a loan back. I know K2 is Jersey but I am aware of other similar schemes operating out of the Cayman Islands and Belize where it'd be much harder work to get your money back and therefore an even bigger leap. Again, assuming that the terms are clear that you won't have to repay the loan for a long period of time, say payable on death, then how long does that period of time have to be before it is classed as a non-repayable loan and tax is due on it? Ignoring morals and legalities I think it's fascinating personally. I am a bit odd though. Like any sort of complex financial arrangement, the professionals who are setting it up and selling it to a client are under legal and professional obligations to explain in detail how these schemes work and the risks associated with such schemes. No doubt, the nasty details will be hidden in the smallest of small print and the most inpenterable language, making it tough for a lay person to fully comprehend. And all the "positives" will be trumpeted and emphasised. They will also make the client sign a waiver indemnifying the advisers from any losses arising if the scheme is subsequently found to be unlawful. Heads they win, tails they win. That has always been my primary objection to such schemes. This smacks of outright shysters looking for an easy buck. The heads we win, tails we win, approach and particularly, the waiver required from the client from the start, that the Schemers (Scammers) have no liability for faulty or flawed advice are just unacceptable IMO. That is why I avoid the avoiders. They do not offer any warranty on their advice. They will not back their own product.
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