Tax avoiders to be deliberately bankrupted.....?..
Discussion
Eric Mc said:
REALIST123 said:
At the end of the day, it's not rocket science. Any reasonably numerate and literate person, with application, should be able to understand what's needed.
We had four Budgets in the 12 month period March 2015 to March 2016.
We are scheduled to have three budgets in 8 months this year - although so far we've only had one and the second budget has gone missing - so it may not happen.
This year, HMRC has announced that it's own computers cannot cope with the tax changes made to dividends and interest and as a result they will be issuing incorrect tax calculations to thousands of taxpayers. HMRC will not fine anybody if they pay the wrong amount IF the person points out to HMRC that they thought that HMRC's incorrect calculations were really correct/
At the moment tax policy in the UK is a completely shambolic and disorganised. Being logical and literate is of little help. Indeed, it might even be a hindrance at the moment.
Alpinestars said:
I set out my understanding at page 3. It was ostensibly a tax deferral scheme, not really an avoidance scheme.
At a basic level the business bought rights from Disney, income was supposed to accrue over 20 years or so, and it was financed with a loan from Barclays. The "magic" was that the interest on the loan was paid in year 1, giving an up-front tax deduction for investors, which was worth significantly more than the money invested by them.
Had the business run its course, no tax would have been avoided.
It failed not because it was a deferral or avoidance scheme, but on a technicality. The Court ruled that the partnership was not trading for tax purposes (it was ruled to be an investment partnership), which meant that no deduction was available for the interest - accelerated or not.
Much appreciated. As always.At a basic level the business bought rights from Disney, income was supposed to accrue over 20 years or so, and it was financed with a loan from Barclays. The "magic" was that the interest on the loan was paid in year 1, giving an up-front tax deduction for investors, which was worth significantly more than the money invested by them.
Had the business run its course, no tax would have been avoided.
It failed not because it was a deferral or avoidance scheme, but on a technicality. The Court ruled that the partnership was not trading for tax purposes (it was ruled to be an investment partnership), which meant that no deduction was available for the interest - accelerated or not.
It was years ago now, but out of the blue I received a letter and notice of fine from HMRC, for failure to do a self assessment, they insisted I had been notified of the need to do this 3 years prior to the actual date, and had reminded me via letter numerous times, when challenged about which address they were sending to it transpired they had the wrong address on file, and continued to use it. I wrote back pointing out that they were informed of my present address, and also knew exactly where to find me if I was not responsive to these letters as I had worked for the same company on a PAYE basis for over 8 years!. I filled in the required self assessment forms(turned out 3 were needed), and got a refund for the first one, while the next 2 were correct with nothing owing in either direction, they also cancelled the fine, once I pointed out how simple it would have been to contact me via my employer !
They are not perfect, but given reasonable arguments to their reasoning in my case, they backed down, are they really as draconian as suggested? I am of course willing to admit my result is not necessarily the norm, so is not representative of all interactions with them.
They are not perfect, but given reasonable arguments to their reasoning in my case, they backed down, are they really as draconian as suggested? I am of course willing to admit my result is not necessarily the norm, so is not representative of all interactions with them.
Of course they can be draconian and in some cases, with justification.
You seem to be suggesting that the way they dealt with your problem was OK - and by the sound of it, it was. But the problem should never have arisen in the first place. The fact that they sorted out your problem in a reasonable manner was good - but that is not always the case.
I am more concerned about -
the increasing complexity of the tax system
the inability of HMRC to get basic things right (like not having correct addresses for taxpayers)
the current issue that their own tax software can't cope with their own tax rules
the situation where the law says that HMRC can fine you even if the problems are caused by them
You seem to be suggesting that the way they dealt with your problem was OK - and by the sound of it, it was. But the problem should never have arisen in the first place. The fact that they sorted out your problem in a reasonable manner was good - but that is not always the case.
I am more concerned about -
the increasing complexity of the tax system
the inability of HMRC to get basic things right (like not having correct addresses for taxpayers)
the current issue that their own tax software can't cope with their own tax rules
the situation where the law says that HMRC can fine you even if the problems are caused by them
Eric Mc said:
Of course they can be draconian and in some cases, with justification.
You seem to be suggesting that the way they dealt with your problem was OK - and by the sound of it, it was. But the problem should never have arisen in the first place. The fact that they sorted out your problem in a reasonable manner was good - but that is not always the case.
I am more concerned about -
the increasing complexity of the tax system
the inability of HMRC to get basic things right (like not having correct addresses for taxpayers)
the current issue that their own tax software can't cope with their own tax rules
the situation where the law says that HMRC can fine you even if the problems are caused by them
Oh, I agree that it should never have occurred in the first place, and maybe that's why they backed off, as you say, it's a ridiculous state of affairs when they admit their own system cannot cope with coming changes.You seem to be suggesting that the way they dealt with your problem was OK - and by the sound of it, it was. But the problem should never have arisen in the first place. The fact that they sorted out your problem in a reasonable manner was good - but that is not always the case.
I am more concerned about -
the increasing complexity of the tax system
the inability of HMRC to get basic things right (like not having correct addresses for taxpayers)
the current issue that their own tax software can't cope with their own tax rules
the situation where the law says that HMRC can fine you even if the problems are caused by them
I run a large dept in a bank, if we ran our business this way, we would have no clients in about a week, and that possibly is the real answer, HMRC have a closed market, and know it, so don't particularly care one way or the other about the end user?
PurpleMoonlight said:
Isn't this covered by the fact that it is the taxpayers responsibility to pay the correct tax, not HMRC to ask for the correct tax?
So we have to understand their system perfectly even when it's so complicated that they themselves don't understand it? Sounds fair & reasonable to me............................BlackLabel said:
The bold Barry owes £1.5 million and has accumulated the fantastic asset value of £3k. Either he has some smart advisors or is thick as s
t!Granfondo said:
BlackLabel said:
The bold Barry owes £1.5 million and has accumulated the fantastic asset value of £3k. Either he has some smart advisors or is dumb as s
t!James_B said:
johnfm said:
Can't be bothered reading the entire thread - but there is a distinction in my view between the obvious tax evasion scams (Chris Moyle being a 'car dealer' making huge losses when he never in fact ever traded any cars) and the Ingenious Film projects - which have recently been through the courts and deemed to be avoidance schemes.
Ingenious made a shedload of successful films as far as I can tell. How they've been put in the same class as an avoidance scheme is beyond me.
A large part of it was that the tax benefits had nothing to do with the profitability. The whole point was to avoid tax, not to fund films.Ingenious made a shedload of successful films as far as I can tell. How they've been put in the same class as an avoidance scheme is beyond me.
I had a couple of friends who invested in this. They may well lose their houses over it, and although ai feel their pain, I can't feel sympathy. I pay my taxes, which are far higher than theirs, and don't try to evade them. They shouldn't have tried it either.
My tax affairs are - or at least should be - really simple.
Although I have a variable component to my salary, my basic takes me into the higher rate, so there presumably shouldn't be too much difficulty calculating my tax due on my salary.
There's a few quid a year here or there in gift aid and interest (but under £200), but as employer contributions make it well worth my while jamming everything I can into my pension which is obviously also deducted at source, I've got very little variability there either.
A few years ago, HMRC wrote to me and told me I no longer had to complete a self-assessment form.
Given that they've failed to get my tax right first time on a single occasion for at least the last 15 years, I told them I'd much rather keep the self assessment please! I did this more to make sure I got back what I was owed in the years where I'm overcharged, but with hindsight, given what has been said on this thread, I'm now bloody glad I kept it for the years where they'd undercharged me as well!!!
Having said that, whilst I do think that ignorance should be a permissible defence for PAYE employees where their own employer's payroll department and HMRC haven't been able to get it right, I still think that the subjects of the original topic deserve everything they get for something which is obviously as bent as it comes!
Although I have a variable component to my salary, my basic takes me into the higher rate, so there presumably shouldn't be too much difficulty calculating my tax due on my salary.
There's a few quid a year here or there in gift aid and interest (but under £200), but as employer contributions make it well worth my while jamming everything I can into my pension which is obviously also deducted at source, I've got very little variability there either.
A few years ago, HMRC wrote to me and told me I no longer had to complete a self-assessment form.
Given that they've failed to get my tax right first time on a single occasion for at least the last 15 years, I told them I'd much rather keep the self assessment please! I did this more to make sure I got back what I was owed in the years where I'm overcharged, but with hindsight, given what has been said on this thread, I'm now bloody glad I kept it for the years where they'd undercharged me as well!!!
Having said that, whilst I do think that ignorance should be a permissible defence for PAYE employees where their own employer's payroll department and HMRC haven't been able to get it right, I still think that the subjects of the original topic deserve everything they get for something which is obviously as bent as it comes!
James_B said:
Alpinestars said:
There was no evasion involved. It was an issue of timing of deductions, not evasion.
I'd say that that crosses the semantic line into what it's fair to describe as evasion on a non-legal forum.They were doing what it turns out they weren't allowed to do, and rightly (in my opinion) are getting nailed for it.
It pains me when I am handed £x each Christmas for my work and leave with £0.53.x after tax, so whether we want to classify this with a different word, I'm happy that they are going to be made to pay back what they failed to pay.
As it transpired, not only will the investors pay tax on the profits (as they would have done anyway), they will not get a deduction for interest costs. And that's because of the nature of the investment.
Some contractors aren't happy.
"Thousands of workers hit with massive tax avoidance bills
The 2019 loan charge means ill-advised IT and NHS contractors face staggering bills from HMRC"
https://www.theguardian.com/money/2019/feb/16/thou...
"Thousands of workers hit with massive tax avoidance bills
The 2019 loan charge means ill-advised IT and NHS contractors face staggering bills from HMRC"
https://www.theguardian.com/money/2019/feb/16/thou...
"ill-advised" my foot. I've been an IT contractor/consultant for almost three decades now, I remember these loan schemes coming up, the people who went for them were the same ones that went to the trouble of being paid offshore until that got closed down etc. They all knew they were signing up to dodgy schemes, the clue is very much in the word "loan", any halfwit knows that a genuine loan has an expectation that it will be paid back at some point.
I didn't ever partake in any such scheme, I've always paid my due tax each year without evading any of it, so no sympathy from me.
I didn't ever partake in any such scheme, I've always paid my due tax each year without evading any of it, so no sympathy from me.
It's not just megabuck earning IT contractors, my friend taught for a large London Academy for a short period and he had to go through the agency to get paid and they used one of these schemes, only know about it as I caught up with him at Christmas and he had the HRMC on his back about it.
I think it's unfair to penalise low paid workers who had no choice but accept the agencies terms compared to contractors on £500+ per day who willingly chose this scheme to keep under the 40% tax bracket.
I think it's unfair to penalise low paid workers who had no choice but accept the agencies terms compared to contractors on £500+ per day who willingly chose this scheme to keep under the 40% tax bracket.
untakenname said:
It's not just megabuck earning IT contractors, my friend taught for a large London Academy for a short period and he had to go through the agency to get paid and they used one of these schemes, only know about it as I caught up with him at Christmas and he had the HRMC on his back about it.
I think it's unfair to penalise low paid workers who had no choice but accept the agencies terms???? compared to contractors on £500+ per day who willingly chose this scheme to keep under the 40% tax bracket.??
I remember these schemes from doing agy work in the early 00's, you could choose to have the agy tax your pay, or be paid through a composite company some of whom stopped your tax etc but allowed you certain benefits like entering expenses etc, and some of whom simply took 2 or 3 percent and gave you the lot. Last was popular with Oz/kiwi etc on 2 year work permits as they figured they'd be long gone before hmrc ever got round to them. Noone was under any illusion that it wasn't a bit dodge.I think it's unfair to penalise low paid workers who had no choice but accept the agencies terms???? compared to contractors on £500+ per day who willingly chose this scheme to keep under the 40% tax bracket.??
One question for those in the know - I thought the tax man only went back 6 years?
kev1974 said:
"ill-advised" my foot. I've been an IT contractor/consultant for almost three decades now, I remember these loan schemes coming up, the people who went for them were the same ones that went to the trouble of being paid offshore until that got closed down etc. They all knew they were signing up to dodgy schemes, the clue is very much in the word "loan", any halfwit knows that a genuine loan has an expectation that it will be paid back at some point.
I didn't ever partake in any such scheme, I've always paid my due tax each year without evading any of it, so no sympathy from me.
This I didn't ever partake in any such scheme, I've always paid my due tax each year without evading any of it, so no sympathy from me.
The Sunday Times had sob stories about this as well. In that case with pilots being paid the minimum wage (via an agency) with the rest of their remuneration being a "loan".
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