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

[Troubleatmill]

Every couple of months I get an email or phone call from companies offering these services.

An accountant I used to use a long time ago was dallying with the idea and trying to sell it to me.


I sleep much easier knowing my business is pretty straightforward, HMRC paperwork comes in, accountant tells me what to pay, I pay it.... I get on with earning a crust.......

[Moonhawk]

Troubleatmill said:

I sleep much easier knowing my business is pretty straightforward, HMRC paperwork comes in, accountant tells me what to pay, I pay it.... I get on with earning a crust.......

Pretty much my attitude too.

I couldn't sleep with the spectre of HMRC in the back of my mind.

[TTmonkey]

Moonhawk said:

I know of a couple of contractors on the "umbrella company pays you via a loan that you never repay - giving you in effect 85% take home" scheme.

Apparently one of them has been had HMRC at their door two or three times - but they have simply gone away when this person provided them with the paper work they asked for.

Not sure how these people are getting away with it - but they do appear to be at the moment and have been for a number of years.

It will catch up with them. 6 or 7 years back many contractors got caught up with this. I've seen guys with bills of £130,000+ for just a few years in a scheme.

In fact I jnow a guy that's spent tens of thousands on legal advice. He's still going to have to pay.

[CountZero23]

A lass at work used to be earning big bucks as a contractor in the city and was using one of these sketchy schemes. Got worried about potential fallout and ditched it after 6 months.

Fast forward 10 years and she's got two kids, going through an expensive divorce and with impeccable timing, HMRC sends a letter saying they are investigating the scheme and she could be liable for 20k.

Not a fun situation for her but I have limited sympathy.

[anonymous-user]

I find this one a bit tricky, it seems aggressive avoidance, but they did make actual films and HMRC have a history of fecking people over as commented on above, but it involves Lineker and Geldoff, so crack on HMRC.....;)

[TTmonkey]

wsurfa said:

I find this one a bit tricky, it seems aggressive avoidance, but they did make actual films and HMRC have a history of fecking people over as commented on above, but it involves Lineker and Geldoff, so crack on HMRC.....;)

The issue is not that films were made, or that they were successful and generated money.

The issue is that the accountants spotted a flaw in the scheme intended to generate income in the film industry which would allow people to put some money in, mich if it borrowed, that would allow them to avoid paying large amounts of tax in their other incomes.

The scheme was exploited for the sole purposes of tax avoidance.

The Stars affected by this aren't being accused of tax evasion, so the whole arguement of avoidance = good and evasion = bad isn't relevant either. Proper methods of avoiding tax has to be approved by the authority, anything that isn't proper doesn't qualify and therefore isn't avoidance and the tax is due. Doesn't make it evasion, but does make it payable.

Do I feel sorry for some of the stars involved in this? Yes I do. They've been badly advised and most are not qualified to understand the rules, laws and implications. However, many have been living a life of luxury whilst nurses, teachers, soldiers etc have had no real pay rises in a decade.

Interesting list of people in the top 100 highest 'investors' in this club that includes many 'has been' Stars who I would imagine needed some clever investment advice to keep their lifestyles after their income streams started drying up.

[TTmonkey]

http://www.dailymail.co.uk/news/article-4568000/Th...

Worth looking at the list if ex sportsmen. Gone are the days of buying a pub for your retirement.

A footballers lifestyle is very expensive and staying in this wealth bracket must be very hard once the work dries up.

The super rich that are also involved? Wow, they know a level of greed that is astonishing. If the beckhams have 500 million in the bank you'd think they wouldn't need the kind of aggressive tax avoidance advice.

[Derek Smith]

The HMRC has powers that are quite draconian. There is limited oversight as well. If money is generated, no one seems to bother.

I've dealt with them twice as a police officer and both times I ended up sympathising with the person they were picking on.

Scary people.

[Alpinestars]

Derek Smith said:

The HMRC has powers that are quite draconian. There is limited oversight as well. If money is generated, no one seems to bother.

I've dealt with them twice as a police officer and both times I ended up sympathising with the person they were picking on.

Scary people.

They apply the same laws that any taxpayer should apply. They have certain powers of enquiry, and often try to extend beyond those powers. That's where people need professional advice. You don't have to comply with all requests.

[TTmonkey]

Derek Smith said:

The HMRC has powers that are quite draconian. There is limited oversight as well. If money is generated, no one seems to bother.

I've dealt with them twice as a police officer and both times I ended up sympathising with the person they were picking on.

Scary people.

Yes I agree, been on the wrong side of them myself over a releativly small matter, and have to admit it led to very real feelings that suicide would be an option.

Makes you wonder how this is affecting the individuals listed above. Many will face ruin if this goes on. How long before one of them does something terrible due to this?

Or indeed, has this already happened? Reading the list gives you an uncomfortable feeling with one of the names on there.

[Welshbeef]

TTmonkey said:

Yes I agree, been on the wrong side of them myself over a releativly small matter, and have to admit it led to very real feelings that suicide would be an option.

Makes you wonder how this is affecting the individuals listed above. Many will face ruin if this goes on. How long before one of them does something terrible due to this?

Or indeed, has this already happened? Reading the list gives you an uncomfortable feeling with one of the names on there.

They are worried as they broke the law took home far too much cash didn't pay the correct tax levels and lapped it up.

You play with fire you get burnt.

Pay the tax you are due avoid as much as possible be it ISA tax free allowance pension contributions fine wine etc.



(Watch out the Govt will be changing the law on classic cars soon to scoop up some of the lovely tax from all those stratospheric gains)

[TTmonkey]

Not sure they broke the law. They made a decsion based on advice that turned out to be incorrect, now the always due taxes are again due and they have to pay.

If they had broken the law the police would be investigating and people would face arrest. As far as I'm aware that hasn't happened.

[Sa Calobra]

The stars knew very well what they were doing. They took advice then weighed up exposure, risk and reward. You don't get rich and stay rich by being naive.

I personally can't wait for a paperless money society and more draconian enforcement. Then we won't have countless tradesmen etc etc getting cash in hand and businesses dodging tax. Greece struggled due to their endemic tax avoidance culture. We've got a stinking one here

Edited by Sa Calobra on Saturday 3rd June 10:26

[Jonesy23]

The simple test when it comes to tax arrangements is that if something seems 'clever' as a way of reducing your tax bill then it probably isn't a great idea. For one thing the tax man is perfectly capable of changing the rules of the game if he thinks you're playing him.

Personally I've always found HMRC to be OK. It was the Finanzamt who I worried about.

[HoHoHo]

I had a contractor on one of these dodgy deals and when I ended his contract he then took us to a tribunal suggesting he was an employee! It was sole, We were involved by a company offshore, they paid someone else and then he gets paid.....bingo.....f-all tax paid by said contractor.

The little st lost his tribunal claim but not before it cost £10k defending our side (well, our employment lawyers to be fair).

He had three jobs at the time and wanted his cake and to eat it, he fecking lost

Can someone please email me a telephone number and I'll make a call and will hopefully make his hole weak

[Alpinestars]

Welshbeef said:

They are worried as they broke the law took home far too much cash didn't pay the correct tax levels and lapped it up.

You play with fire you get burnt.

Pay the tax you are due avoid as much as possible be it ISA tax free allowance pension contributions fine wine etc.



(Watch out the Govt will be changing the law on classic cars soon to scoop up some of the lovely tax from all those stratospheric gains)

And how do they then deal with losses, that most people make.

[Plinth]

"You don't get rich and stay rich by being naive."
Indeed, but you can get rich and stay rich by being honest.

"I personally can't wait for a paperless money society and more draconian enforcement."
Be careful what you wish for.

"Greece struggled due to their endemic tax avoidance culture."
Contributary factor - yes.
Not the full story, though.

It has been argued by several leading analysts that Italy would have suffered financial collapse years ago without the black economy propping it up.
The impact on the whole of the EU would have been massive - a price worth paying?

I also wish to see a more honest society, but the solution is not a simple one.

[Welshbeef]

Alpinestars said:

And how do they then deal with losses, that most people make.

What?
these stars had earned the money but then invested it in a scheme to avoid paying the tax they were due. It matters not one jot if you lose or spend all of your cash the fact is you shouldn't have had all that cash to spend in the first place.

[Alpinestars]

Welshbeef said:

Alpinestars said:

And how do they then deal with losses, that most people make.

What?
these stars had earned the money but then invested it in a scheme to avoid paying the tax they were due. It matters not one jot if you lose or spend all of your cash the fact is you shouldn't have had all that cash to spend in the first place.

I was referring to your classic cars point.

[Welshbeef]

Alpinestars said:

I was referring to your classic cars point.

Same as any asset class