Tax avoiders to be deliberately bankrupted.....?..

Tax avoiders to be deliberately bankrupted.....?..

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Discussion

johnfm

13,668 posts

250 months

Tuesday 6th December 2016
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RYH64E said:
johnfm said:
We carry PI cover for the same reason architects or engineers or accountants do. While professional services providers endeavour to provide services with good and reasonable care or with good industry practice (or whatever the threshold of the contract may be) there will be times when that service falls short and a client MAY have a cause of action. That's not to say that there is always a cause of action when advice doesn't prove to be correct.
Architects, engineers and accountants typically work to the letter and spirit of the relevant regulations and legislation, if something goes wrong it's because there's been a major cock up. If tax advisors worked in the same way the advice would be pretty much get an ISA, top up your pension, and pay tax on the rest...
This is the issue - tax advisos who design nd promote schemes are "working to the letter (but not the spirit) of the relevant regulations'. That is their entire raison d'etre - the regulations are (in places) vague or silent on certain approaches. So they design schemes using these approaches to reduce a taxpayer's liability to pay tax.

V8 is flogging a dead horse if he thinks that a service provider can give caveated advice, set out those caveats clearly and then get sued for losses arising from circumstances specifically set out in the caveats.

V8 Fettler

7,019 posts

132 months

Wednesday 7th December 2016
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Alpinestars said:
V8 Fettler said:
My stance is that professional advisers who charge a fee for providing professional advice should take responsibility for that advice.

Again, your view is that the engagement letter is the contract and cannot be amended, My view is that it's just another contract and can be amended by various means with or without the consent of the professional adviser e.g. by a regulatory body, adjudication or court action.

Where have I taken professional advice from other contributors to this thread? Other contributors have made observations, for which they've not extracted a fee as far as I am aware. Or do anonymous forum posts count as professional advice in your world?
What happens if the advice is that there is a chance you will get a deduction for a cost if you do the following, but there is a risk that it will be successfully challenged by HMRC and potentially fail in Court? That's the broad tenor of advice when looking at schemes. No professional tax advisor worth his salt would guarantee a scheme to work where there is some risk - and if he does guarantee it, he'd be quite rightly sued. There is nearly always some risk when applying the tens of thousands of pages of tax law to a client's position.

Very often with "schemes", advisors will take their own advice from a QC, and depending on what the QC says, they will apply it to clients. Those same QCs can end up in Court, defending the technicalities of the advice, and can fail to convince a Court. That's not bad tax advice, that's just the way tax law works, boundaries are pushed and retracted all the time, and new common law is established as a result. it's an art, not a science, which is the point you are wilfully missing.

The professional advice bit relates to people who know how it works, ie deal with the issue day to day, have told you how it works. You can take a horse to water etc etc.
Perhaps that's one of the primary issues; tax law should be written with the aid of flow charts and Venn diagrams to eliminate the wishy-washy artiness. I've regarded the description "wilful" as a compliment for several decades now, thanks.

Do you seriously believe that posting anonymous comments and observations on a forum with no fee extracted could be interpreted as professional advice? Are you really involved in the sale of financial products?

V8 Fettler

7,019 posts

132 months

Wednesday 7th December 2016
quotequote all
johnfm said:
RYH64E said:
johnfm said:
We carry PI cover for the same reason architects or engineers or accountants do. While professional services providers endeavour to provide services with good and reasonable care or with good industry practice (or whatever the threshold of the contract may be) there will be times when that service falls short and a client MAY have a cause of action. That's not to say that there is always a cause of action when advice doesn't prove to be correct.
Architects, engineers and accountants typically work to the letter and spirit of the relevant regulations and legislation, if something goes wrong it's because there's been a major cock up. If tax advisors worked in the same way the advice would be pretty much get an ISA, top up your pension, and pay tax on the rest...
This is the issue - tax advisos who design nd promote schemes are "working to the letter (but not the spirit) of the relevant regulations'. That is their entire raison d'etre - the regulations are (in places) vague or silent on certain approaches. So they design schemes using these approaches to reduce a taxpayer's liability to pay tax.

V8 is flogging a dead horse if he thinks that a service provider can give caveated advice, set out those caveats clearly and then get sued for losses arising from circumstances specifically set out in the caveats.
The caveats will most probably form part of the contract; as previously mentioned that contract can be amended by various means with or without the consent of the professional adviser e.g. by a regulatory body, adjudication or court action. Therefore the caveats do not provide absolute protection against being sued.


V8 Fettler

7,019 posts

132 months

Wednesday 7th December 2016
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sidicks said:
V8 Fettler said:
As previously, an unsophisticated consumer cannot sign away their rights to a fair contract, FSA: http://www.fsa.gov.uk/pubs/other/understood.pdf

Where an investor employs a professional adviser to do the homework, should not the professional adviser take responsibility if that homework is subsequently marked as D minus ?
Hasn't this already been addresssed?

You're missing the difference between a sophisticated investor and an unsophisticated one!!
It has, but the concept of signing away rights to a fair contract raised its ugly head again, so the FSA link appeared again.

You'll find that I introduced reference to unsophisticated / sophisticated investors earlier in this thread in an attempt to avoid confusion by others as the thread drifted.

V8 Fettler

7,019 posts

132 months

Wednesday 7th December 2016
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desolate said:
V8 Fettler said:
Are you stating that tax advisers do not typically work to the letter and spirit of the relevant regulations and legislation?
That's the whole point of these schemes.

They seek to exploit the letter of th law, not the spirit of it.
Which confirms the importance of legislation that's clear and unambiguous, which tax law clearly isn't.

V8 Fettler

7,019 posts

132 months

Wednesday 7th December 2016
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bga said:
V8 Fettler said:
Within the context of this thread, you need to differentiate between an opinion and professional advice, also to recognise the difference between a sophisticated consumer who can make informed decisions without professional advice and an unsophisticated consumer (who should be able to rely upon professional advice as a basis to reach an informed decision).
Agree, very generally the consumer is considered unsophisticated but a corporate is always considered to be sophisticated/educated.
The corporate may well be regarded as sophisticated, but can still employ a professional adviser to transfer risk.

V8 Fettler

7,019 posts

132 months

Wednesday 7th December 2016
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316Mining said:
Lets face it, most of the 'celebs' involved in such schemes are going to be unsophisticated investors.
However, they are probably putting their trust in investment professionals under their employment, either structured or casual, who advise them. However, that advice is likely to be highly weighted on whether that 'trusted' professional is making money from the scheme themselves. It isn't going to be true impartial advice, is it?

The celeb 'wants' to avoid tax.
the advisor 'wants' too help them avoid tax too, and make a commission or sale.

undoubtedly the advisor will mention in passing a risk, but will also in the same sentence probably downplay it, thus covering themselves....
If the adviser is receiving a fee then he is not covering himself by downplaying the risk, particularly if weasel words are used.

V8 Fettler

7,019 posts

132 months

Wednesday 7th December 2016
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RYH64E said:
V8 Fettler said:
Are you stating that tax advisers do not typically work to the letter and spirit of the relevant regulations and legislation?
Do you think that they do? If they did, the advice would be to just pay up, that's the intention of the legislation after all.
Some tax advisers will work to the letter and spirit of the legislation / regulations, some will work to the letter and some are chancers.

Alpinestars

13,954 posts

244 months

Wednesday 7th December 2016
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V8 Fettler said:
Perhaps that's one of the primary issues; tax law should be written with the aid of flow charts and Venn diagrams to eliminate the wishy-washy artiness. I've regarded the description "wilful" as a compliment for several decades now, thanks.

Do you seriously believe that posting anonymous comments and observations on a forum with no fee extracted could be interpreted as professional advice? Are you really involved in the sale of financial products?
Advice can be pro bono....

Maybe you should put your mind to rewriting tax law. The people who have tried in the past clearly don't have your vision.

Or maybe aren't internet experts.

Edited by Alpinestars on Wednesday 7th December 08:53

V8 Fettler

7,019 posts

132 months

Thursday 8th December 2016
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Alpinestars said:
V8 Fettler said:
Perhaps that's one of the primary issues; tax law should be written with the aid of flow charts and Venn diagrams to eliminate the wishy-washy artiness. I've regarded the description "wilful" as a compliment for several decades now, thanks.

Do you seriously believe that posting anonymous comments and observations on a forum with no fee extracted could be interpreted as professional advice? Are you really involved in the sale of financial products?
Advice can be pro bono....

Maybe you should put your mind to rewriting tax law. The people who have tried in the past clearly don't have your vision.

Or maybe aren't internet experts.

Edited by Alpinestars on Wednesday 7th December 08:53
You're very kind, is there a fee available? Although don't we already pay substantial amounts of tax to MPs and civil servants to get the legislation right?

Professional advice should generally create income (perhaps as a fee) to justify the risk to PI cover, although there are exceptions.

bga

8,134 posts

251 months

Thursday 8th December 2016
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V8 Fettler said:
The corporate may well be regarded as sophisticated, but can still employ a professional adviser to transfer risk.
You only transfer the risk if the provider accepts liability for a negative outcome or there is insurance policy covering the event. Using a professional adviser can demonstrate that a company exercised due diligence and made a decision fully aware of the risks. Only if the advisor failed in the latter then there would likely be recourse.

anonymous-user

54 months

Thursday 8th December 2016
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As far as I am aware you can't transfer risk for a tax liability.


Alpinestars

13,954 posts

244 months

Thursday 8th December 2016
quotequote all
V8 Fettler said:
You're very kind, is there a fee available? Although don't we already pay substantial amounts of tax to MPs and civil servants to get the legislation right?

Professional advice should generally create income (perhaps as a fee) to justify the risk to PI cover, although there are exceptions.
Perhaps it's a bit too complicated for them eh?

Step up Mr Fettler. Not only would you put the world to rights, you'd make many gold sovereigns doing it. And you'd go down in history as the man who wrote laws that were simple and undefeatable.

Eric Mc

122,032 posts

265 months

Thursday 8th December 2016
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desolate said:
As far as I am aware you can't transfer risk for a tax liability.
New changes to tax law will make professional advisers liable for some of the penalties incurred by taxpayers who relied on their advice.

Alpinestars

13,954 posts

244 months

Thursday 8th December 2016
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Eric Mc said:
New changes to tax law will make professional advisers liable for some of the penalties incurred by taxpayers who relied on their advice.
I don't think it's some of THE penalties. It's a penalty in its own right. Up to 100% of the fee from memory.

anonymous-user

54 months

Thursday 8th December 2016
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Eric Mc said:
New changes to tax law will make professional advisers liable for some of the penalties incurred by taxpayers who relied on their advice.
But not the underlying tax liability.

Eric Mc

122,032 posts

265 months

Thursday 8th December 2016
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No - but with some penalties equal to the tax liability - they will definitely hurt.

V8 Fettler

7,019 posts

132 months

Thursday 8th December 2016
quotequote all
bga said:
V8 Fettler said:
The corporate may well be regarded as sophisticated, but can still employ a professional adviser to transfer risk.
You only transfer the risk if the provider accepts liability for a negative outcome or there is insurance policy covering the event. Using a professional adviser can demonstrate that a company exercised due diligence and made a decision fully aware of the risks. Only if the advisor failed in the latter then there would likely be recourse.
Again, the financial adviser may attempt to use weasel words within the contract to avoid responsibility in the event of poor advice, but the contract can be amended with or without the consent of the financial adviser.

V8 Fettler

7,019 posts

132 months

Thursday 8th December 2016
quotequote all
Alpinestars said:
V8 Fettler said:
You're very kind, is there a fee available? Although don't we already pay substantial amounts of tax to MPs and civil servants to get the legislation right?

Professional advice should generally create income (perhaps as a fee) to justify the risk to PI cover, although there are exceptions.
Perhaps it's a bit too complicated for them eh?

Step up Mr Fettler. Not only would you put the world to rights, you'd make many gold sovereigns doing it. And you'd go down in history as the man who wrote laws that were simple and undefeatable.
MPs typically have only a short term interest (to the next election), civil servants typically dislike rapid and widespread change, they would rather tinker at the margins.

Alpinestars

13,954 posts

244 months

Thursday 8th December 2016
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V8 Fettler said:
Again, the financial adviser may attempt to use weasel words within the contract to avoid responsibility in the event of poor advice, but the contract can be amended with or without the consent of the financial adviser.
Give some examples of where that's happened in tax.

Otherwise, we can all use weasel talk to "prove" our point.