Retrospective taxation campaign

[Steffan]

Gene Vincent said:

Steffan said:

The word retrospective used in this context implies generally looking back at what has already taken place. That is not what happened here. there has been no retrospective legislation.

The use of the title retrospective taxation in the topic is misleading because there has been no retrospective legislation. It is not retrospective. It was always unlawful. If it was not then new legislation would be needed to outlaw the scheme. No legislation has been required simply because it was always illegal. Therefore it cannot be retrospective.

The topic is about as well founded as the tax scheme. It was simply wrong.

I have no difficulty in perceiving their mistake. I presume you do.

That's a very long winded way to say you were wrong, but fair enough.

It would appear you do not understand the argument.

[Gene Vincent]

Steffan said:

Gene Vincent said:

Steffan said:

The word retrospective used in this context implies generally looking back at what has already taken place. That is not what happened here. there has been no retrospective legislation.

The use of the title retrospective taxation in the topic is misleading because there has been no retrospective legislation. It is not retrospective. It was always unlawful. If it was not then new legislation would be needed to outlaw the scheme. No legislation has been required simply because it was always illegal. Therefore it cannot be retrospective.

The topic is about as well founded as the tax scheme. It was simply wrong.

I have no difficulty in perceiving their mistake. I presume you do.

That's a very long winded way to say you were wrong, but fair enough.

It would appear you do not understand the argument.

No, and I understand you as well.

You used the term 'codify', yet the codex already had a definition, a definition that did not include those now affected within it.

The codex was changed to do so, but not from the time the codex was changed but 'retrospectively'.

Now, keep dancing and I'll happily pull the strings for as long as you want to dance.

[Steffan]

Gene Vincent said:

Steffan said:

Gene Vincent said:

Steffan said:

The word retrospective used in this context implies generally looking back at what has already taken place. That is not what happened here. there has been no retrospective legislation.

The use of the title retrospective taxation in the topic is misleading because there has been no retrospective legislation. It is not retrospective. It was always unlawful. If it was not then new legislation would be needed to outlaw the scheme. No legislation has been required simply because it was always illegal. Therefore it cannot be retrospective.

The topic is about as well founded as the tax scheme. It was simply wrong.

I have no difficulty in perceiving their mistake. I presume you do.

That's a very long winded way to say you were wrong, but fair enough.

It would appear you do not understand the argument.

No, and I understand you as well.

You used the term 'codify', yet the codex already had a definition, a definition that did not include those within it.

The codex was changed to do so, but not from the time the codex was changed but 'retrospectively'.

Now, keep dancing and I'll happily pull the strings for as long as you want to dance.

I prefer to be relevant to the Post.

[deckster]

Steffan said:

Gene Vincent said:

Steffan said:

The word retrospective used in this context implies generally looking back at what has already taken place. That is not what happened here. there has been no retrospective legislation.

The use of the title retrospective taxation in the topic is misleading because there has been no retrospective legislation. It is not retrospective. It was always unlawful. If it was not then new legislation would be needed to outlaw the scheme. No legislation has been required simply because it was always illegal. Therefore it cannot be retrospective.

The topic is about as well founded as the tax scheme. It was simply wrong.

I have no difficulty in perceiving their mistake. I presume you do.

That's a very long winded way to say you were wrong, but fair enough.

It would appear you do not understand the argument.

I presume you have read my post, looked up the text of the Finance Act 2008, read the CIOT paper and the transcripts of the judgements handed down by the High Court and the Court of Appeal? You are of course entitled your own opinion, but you must admit there is a fair body of evidence to suggest that you might like to reconsider.

And, of course, when you say that "No legislation has been required", you are quite simply wrong.

[Gene Vincent]

Steffan said:

I prefer to be relevant to the Post.

You mean like your constant refrain 'that it's not retrospective legislation' when we have all talked about taxation... the title of the thread... sure you do sonny, sure you do... keep dancing.

[Steffan]

deckster said:

Steffan said:

Gene Vincent said:

Steffan said:

The word retrospective used in this context implies generally looking back at what has already taken place. That is not what happened here. there has been no retrospective legislation.

The use of the title retrospective taxation in the topic is misleading because there has been no retrospective legislation. It is not retrospective. It was always unlawful. If it was not then new legislation would be needed to outlaw the scheme. No legislation has been required simply because it was always illegal. Therefore it cannot be retrospective.

The topic is about as well founded as the tax scheme. It was simply wrong.

I have no difficulty in perceiving their mistake. I presume you do.

That's a very long winded way to say you were wrong, but fair enough.

It would appear you do not understand the argument.

I presume you have read my post, looked up the text of the Finance Act 2008, read the CIOT paper and the transcripts of the judgements handed down by the High Court and the Court of Appeal? You are of course entitled your own opinion, but you must admit there is a fair body of evidence to suggest that you might like to reconsider.

And, of course, when you say that "No legislation has been required", you are quite simply wrong.

On a point of interest what legislation was enacted to make this activity illegal? Was there a change in the law required?

[Steffan]

coyft said:

I read somewhere that the effective tax rate of using this scheme was about 3.5%?
That's a very high risk/reward ratio, an unforeseen risk was that any changes in the law would be applied retrospectively.

Entirely my view. But there are some who prefer not to look at the outcomes.

[Gene Vincent]

coyft said:

I read somewhere that the effective tax rate of using this scheme was about 3.5%?
That's a very high risk/reward ratio, an unforeseen risk was that any changes in the law would be applied retrospectively.

Ex post facto legislation is relatively new and became a favourite of the myopic uber-twonk Gordon Brown, whom, as i have said already couldn't frame roger rabbit, let alone control the framing of the initial law.

[deckster]

Steffan said:

deckster said:

I presume you have read my post, looked up the text of the Finance Act 2008, read the CIOT paper and the transcripts of the judgements handed down by the High Court and the Court of Appeal? You are of course entitled your own opinion, but you must admit there is a fair body of evidence to suggest that you might like to reconsider.

And, of course, when you say that "No legislation has been required", you are quite simply wrong.

On a point of interest what legislation was enacted to make this activity illegal? Was there a change in the law required?

Ref. my post at 18:50 today. Section 58 of the Finance Act, 2008.

[sugerbear]

I can honestly say that I think its great that these schemes have been well stopped. Why should someone who lives and works in the UK and who just wants to avoid what the rest of us have to pay be treated any differently to any other tax dodger. The issue has been swirling around for years.

If IR35 didn't give you enough of a wakeup call then I think you deserve everything you get. You can always sue your advisor or the IOM umbrella company I suppose...

[Gene Vincent]

sugerbear said:

I can honestly say that I think its great that these schemes have been well stopped.

I think we all can agree on that, but if you set out your affairs for a number of years only to find the goalposts moved then that is simply unfair.

We all sort of know that car manufacturers make their cars fall into that lower band don't we, now imagine if the Gov't dropped the numbers by just 10 points due to a new definition of output and then made it retrospective so that if your car is on the cusp they wanted back tax for the last 10 years or so...

Although the intricacies of the law are different the effect and the effect of the change is the same... you get a bill despite you buying a car that had the lower tax band, that has been taken away from you.

[Steffan]

Interesting legislation. On balance I prefer the view of the Courts and handed down in the judgement. Complex matter but IMO never really worth the candle. There is always the risk with very complex strategies in taxation avoidance that the revenue will take the legality to task.

I do appreciate the sense of unfairness that such an approach can bring. That is why I have always tended to avoid complex and very artificial tax structures in business. I think it can be counterproductive.

Simple straight forward well recognised mechanisms to avoid tax are fine. But the really clever stuff has always attracted the attentions and concerns of the IR. Best kept at a distance if at all possible.

[Lucozade]

A few of you are missing a key point perhaps because your not directly affected by retrospective legislation.

If the scheme didn't work then why did the law need to be changed ?

HMRC provided stats to Parliament in which it was deemed that very few people would be affected. They misled the MPs. The very MP - David Gauke, whom is now in charge of HMRC banged the drum that this draconian measure should never be past. But now in power he's the key one arguing in its favour.

Parliament now has rules called Rees Rules which prevent this kind of thing happening again. Plenty warning must be given first. In the case of Section 58 HMRC admitted in an internal document TE63 that they couldn't challenge the scheme as it was perfectly legal to do under European laws. Instead of telling the scheme users in 2002 to stop using the scheme they waited until 2007. And now they are trying to collect the money plus back interest.

Oh and anybody running a limited company - tell if your accountant doesn't set up your affairs to lower your tax bill.

I'm not looking for sympathy not to make friends through this. You win some you loose some in life and I will accept what's coming.

Don't lecture me over tax avoidance. Every single one of us does it in some way or another. Perhaps avoiding VAT when buying from a "mate".

[Rovinghawk]

Elroy Blue said:

People who undertake serial tax avoidance are no better than the feral types who 'legally' receive benefits they have no right too. Both are bleeding the country dry.

I do not have a public sector pension; instead, my company pays money into a pension scheme to fund my retirement. The payments have been made every month for the last 15 years.
These pensions are tax-deductible, ie I (as owner of the company) avoid tax because of them.

This makes me a serial tax avoider. How does providing for my eventual old age equate me with benefit scroungers?

RH

[singlecoil]

Rovinghawk said:

I do not have a public sector pension; instead, my company pays money into a pension scheme to fund my retirement. The payments have been made every month for the last 15 years.
These pensions are tax-deductible, ie I (as owner of the company) avoid tax because of them.

This makes me a serial tax avoider. How does providing for my eventual old age equate me with benefit scroungers?

RH

If the payments are tax deductable, then not paying tax on them isn't really tax avoidance, it's just not paying tax on something that is deductible. 'Avoidance' usually means participating in a scheme that is specifically set up to take advantage of the tax rules to pay less tax.

SC

[sugerbear]

Gene Vincent said:

sugerbear said:

I can honestly say that I think its great that these schemes have been well stopped.

I think we all can agree on that, but if you set out your affairs for a number of years only to find the goalposts moved then that is simply unfair.

We all sort of know that car manufacturers make their cars fall into that lower band don't we, now imagine if the Gov't dropped the numbers by just 10 points due to a new definition of output and then made it retrospective so that if your car is on the cusp they wanted back tax for the last 10 years or so...

Although the intricacies of the law are different the effect and the effect of the change is the same... you get a bill despite you buying a car that had the lower tax band, that has been taken away from you.

Tax dodging and VED changes are totally different. A better example would for a government to change tax bands and ask for the last x years retrospectively, that would be unfair. The difference is that contractors have not paid the full tax. That is the reason why you are being asked to pay back the last x years and perfectly normal for the revenue.

Its unfair to you because you are right up a certain creek having paid part of your salary to scheme in the IOM which you will never recover. How long did you expect the HMRC to ignore the schemes ? Probably ok during a booming economy, but as soon as the bad times hit they will look around for every possible source of revenue (or maybe you have never been through a recession before ?) But there are plenty of people that have lost their jobs after setting their affairs out in a certain way only to find their house repossessed. And dont forget that keeping your taxes low has the effect of increasing everyone elses.

OK, drawing parallels with the American company I work for. They could just restructure the UK offshoot company so that all employees were now employed by a US umbrella company (in Texas, low income tax rates there), who would then invoice the UK company for my time and my salary would be paid for by the umbrella company. It never works like that though because it would be shot down in flames by the HMRC.

It would also work in Europe if they set the umbrella company in Albania which has a very low tax rate. Again, dont think that is going to happen anytime soon.

Makes you wonder why contractors have been suckered into this "deal" and big companies have not. Maybe big companies have much better tax advice and legal representation.

And i was offered this deal about 4 years ago, I decided then that it was too good to true.

[Gene Vincent]

In my defence I just used car tax as this is (ostensibly) a car forum. But your analogy is better and I defer to it.

[deckster]

sugerbear said:

Tax dodging and VED changes are totally different. A better example would for a government to change tax bands and ask for the last x years retrospectively, that would be unfair.

An even better example would be to take something like a double-cab pickup. These, as we all know, became very popular when people realised they they were classed as vans for tax purposes, but also made perfectly good family cars. Therefore, people started putting these pickups through their companies, thereby getting the advantage of a company-funded family car without the associated tax. Classic tax avoidance, exploited by many and assuredly not what was intended by HMRC. Consider now what could happen if HMRC decided to close this loophole and tax people on the full value of the vehicle, rather than the nominal £3,000 that currently happens. Consider further what might happen if they said that this wouldn't just apply from now on, but also for the last ten years. You would, justifiably, complain. But then, according to you, people who have done this have not paid the 'full tax' for the benefit of having a company-provided car, and therefore that's OK.

The real point is of course that 'full tax', 'fair tax', 'right amount' and other such terms are meaningless. All that matters is the amount that is due by law, and that is a very, very difficult thing to define.

sugerbear said:

Makes you wonder why contractors have been suckered into this "deal" and big companies have not. Maybe big companies have much better tax advice and legal representation.

Really? Better tell that to Vodafone, Barclays, M&S, Amazon and the countless other 'big companies' who have had run-ins with HMRC over what is the 'full tax' that they were bound to pay.

[not260]

I get the impression that this scheme is much like fronting with car insurance. In that those affected have chosen to hide behind an organisation in an effort to reduce their costs.

It also sounds to me like the HMRC have questioned the legitimacy of the scheme for a number of years, personally I would have taken that as a warning but who knows what I would have done in similar circumstances.

Why do people think they should be allowed or encouraged to dodge paying income tax whilst living in the UK no doubt taking advantage of public services.

I do have some sympathy and understanding for those whom have been caught out. I can only wish my salary was large enough to get me in to this kind of bother.

[Steffan]

not260 said:

I get the impression that this scheme is much like fronting with car insurance. In that those affected have chosen to hide behind an organisation in an effort to reduce their costs.

It also sounds to me like the HMRC have questioned the legitimacy of the scheme for a number of years, personally I would have taken that as a warning but who knows what I would have done in similar circumstances.

Why do people think they should be allowed or encouraged to dodge paying income tax whilst living in the UK no doubt taking advantage of public services.

I do have some sympathy and understanding for those whom have been caught out. I can only wish my salary was large enough to get me in to this kind of bother.

Entirely me view. The nature of such schemes involves risk. Best avoided INO.