Thousands of workers hit with massive tax avoidance bills

[spyguy]

8 hours ago, Fletcher said:

"It's legit mate. Signed off by a tax barista n everyfink!"

 

Oh fk dont start this...

I socailiase where a lot of oilies drink.

They go 'xx says its fine'

I go - They dont decide hmrc opinion of law.

But they are a barrister.

I dont care, there's loads of barirtsers, they are scammign for business.

Who goes to jail who pays the tax owed - them or you?

I get massively p1ssed of with these idiots and their idiots schemes.

[Cryptotrader]

19 hours ago, Pop321 said:

To be fair they used pensions and limited companies to mitigate some tax....

To be even fairer, the Government changed the law in the Nineties making it mandatory for contractors to use Limited Companies. Self employment was not an option.

Then, they used IR35 to make having one income stream and any level of 'direction' by the client, 'disguised employment'.

So, telling people that they had to pay taxes on their training, work related travel, work equipment but take all the risks involved with being self-employed.

It's not black & white - the government and clients are equally culpable for all of this.

[elephant]

9 hours ago, Fletcher said:

"It's legit mate. Signed off by a tax barista n everyfink!"

 

No wonder the advice was so bad, if it’s come from the staff at the local Costa!!

[PaulParanoia]

21 hours ago, Pop321 said:

However, unfortunately the IT guys and project managers who work for the same finance company were a different matter. Whilst not defending those IT guys,  but I guess it could be argued IT and project managers are low skilled in everything but projects and IT. They don’t know finance. 

I have to disagree with this.  I was a developer working contracts when these schemes first came about.  Speaking with other contractors at the time, it was clear the majority were aware that such schemes were at best borderline legitimate tax avoidance (which would be scrutinised) and at worst outright fraud (declaring money as a loan when you knew it was no such thing). 

You're right that IT contractors who entered into these schemes weren't qualified accountants.  But for them to think they could pay close to zero tax legitimately, at a time when it was so well publicised that HMRC were cracking down on disguised employment via IR35 and other means was pure greed and wishful thinking.

Edited February 26, 2019 by PaulParanoia
Grammar.

[Houdini]

2 hours ago, Cryptotrader said:

To be even fairer, the Government changed the law in the Nineties making it mandatory for contractors to use Limited Companies. Self employment was not an option.

Then, they used IR35 to make having one income stream and any level of 'direction' by the client, 'disguised employment'.

So, telling people that they had to pay taxes on their training, work related travel, work equipment but take all the risks involved with being self-employed.

It's not black & white - the government and clients are equally culpable for all of this.

The Limited Company rules  were introduced back in the 70's when agencies started to use self employment to avoid paying people properly. 

At the time it didn't make much difference to take home pay that only arrived far later when the tax treatment of companies started to differ from employment taxation. 

Nowadays with dividend tax payment the difference in tax rates between a limited company contractor and an employee isn't that different.

[Exiled Canadian]

On 26/02/2019 at 09:47, elephant said:

No wonder the advice was so bad, if it’s come from the staff at the local Costa!!

Other coffee outlets (who shall remain nameless) seem far more au fait with minimising tax

Edited February 27, 2019 by Exiled Canadian

[Pop321]

3 hours ago, Exiled Canadian said:

Other coffee outlets (who shall remain nameless) seem far more au fait with minimising tax

I’m giving that a 9/10. I actually did laugh (well chuckle) out loud  ???

[mattyboy1973]

On 16/02/2019 at 17:57, Ah-so said:

For IT staff, they were not even satisfied with the contractors' trick of working through a shell company and paying themselves dividends. They had to go one step further and try and pay no tax at all.

To be fair, the situation went from one of being unfairly skewed in favour of contractors (split the company with your wife, pay yourself both minimum wage and the rest in divs thus avoiding employers and employee NI and PAYE almost completely) to one of being slightly unfair in the other direction after the introduction of IR35. The issue then (and now) was that you have to pay yourself all of your available earnings as income, with PAYE, emmployees NI and - the big one - an extra 13% of employers NI. I don't know why they couldn't just put the tax footing the same as an employee.

Despite all that I have to say that I was contracting when IR35 came in and immediately complied completely. There were plenty of people in the office who thought I was mad and at least some of them went for these crazy loan schemes. Smelt bad then and looks even worse now. I'm not in touch with them any more but I reckon there's a good chance at least a few of them are caught up in this.

Edited February 27, 2019 by mattyboy1973

[chronyx]

2 hours ago, Pop321 said:

I’m giving that a 9/10. I actually did laugh (well chuckle) out loud  ???

10/10 if he'd said "au lait" 

[goldbug9999]

On 26/02/2019 at 11:07, PaulParanoia said:

I have to disagree with this.  I was a developer working contracts when these schemes first came about.  Speaking with other contractors at the time, it was clear the majority were aware that such schemes were at best borderline legitimate tax avoidance (which would be scrutinised) and at worst outright fraud (declaring money as a loan when you knew it was no such thing). 

These schemes were obviously taking the piss and anyone stupid and/or greedy enough to sigh up for one deserves to get shafted.

[goldbug9999]

On 26/02/2019 at 12:18, Houdini said:

Nowadays with dividend tax payment the difference in tax rates between a limited company contractor and an employee isn't that different.

Indeed the main thing IR35 does is stop you keeping a "float" in your LtD co to tide you over lean times. Anyway its kind of moot now as with HMRCs  massive own goal in the form of the new IR35 rules, pretty much everyone will be working on outside IR35 projects.

[rockerboy]

Crikey, 5 pages - thats a lot of IT people on here - why are so many drawn to this site?

Genuinely interested here - For the "IT contractor" gentlemen on this site,  Do you think you are tending to see things more as "investments" than you should?

I'm thinking that the capacity to save each month might skew thinking more than realised. Consider that if you haven't bought a house by now (when you could have easily afforded it), why didn't you? After all, most people on a normal salary would be delighted to just get on the housing ladder (affordable etc).

So, to IT contractors, what was the reason for not buying a house - was it:

- Fear of "losing money"?

- Waiting to build up more savings?

- Wanting to time your "investment" in housing so you can buy the "house of your dreams" at a knockdown price - and this is why you are on this board?

- Divorce costs (never at home / work prioritised over partner)

- Other lifetime choice (did you do it though)

- Not wanting to be "shackled" to one place  - need to move around the country

Bearing in mind there is a cruel irony here, any sheeple who bought 5 years ago in London who just wanted a home,  unwittingly "bet" on what it seems to have been a winning financial investment and they probably didn't even know it at the time, or see things as you may do  - all the sheeple wanted was a "home of their own".

Edited February 28, 2019 by rockerboy

[chronyx]

I would imagine that IT people can spot systems that aren't working properly quite well 

In IT they fall over

In UK they get bailouts

[spyguy]

On 26/02/2019 at 09:44, Cryptotrader said:

To be even fairer, the Government changed the law in the Nineties making it mandatory for contractors to use Limited Companies. Self employment was not an option.

Then, they used IR35 to make having one income stream and any level of 'direction' by the client, 'disguised employment'.

So, telling people that they had to pay taxes on their training, work related travel, work equipment but take all the risks involved with being self-employed.

It's not black & white - the government and clients are equally culpable for all of this.

No.

They tightened up the rules on people having pretend self employment.

f you are a contractor you need to have more than one paying client in a tax year*

Otherwise, rightly, HMRC will classify you as an employee

Unless youve got some fixed term contract in a temporary site. dn then it has to be less than 2 years.

A contractor can still take training, travel cost from pre-tax income.

[spyguy]

21 minutes ago, rockerboy said:

Crikey, 5 pages - thats a lot of IT people on here - why are so many drawn to this site?

Genuinely interested here - For the "IT contractor" gentlemen on this site,  Do you think you are tending to see things more as "investments" than you should?

I'm thinking that the capacity to save each month might skew thinking more than realised. Consider that if you haven't bought a house by now (when you could have easily afforded it), why didn't you? After all, most people on a normal salary would be delighted to just get on the housing ladder (affordable etc).

So, to IT contractors, what was the reason for not buying a house - was it:

- Fear of "losing money"?

- Waiting to build up more savings?

- Wanting to time your "investment" in housing so you can buy the "house of your dreams" at a knockdown price - and this is why you are on this board?

- Divorce costs (never at home / work prioritised over partner)

- Other lifetime choice (did you do it though)

- Not wanting to be "shackled" to one place  - need to move around the country

Bearing in mind there is a cruel irony here, any sheeple who bought 5 years ago in London who just wanted a home,  unwittingly "bet" on what it seems to have been a winning financial investment and they probably didn't even know it at the time, or see things as you may do  - all the sheeple wanted was a "home of their own".

Nice try trolly.

I think anyone who bought 5 years in London is probably bricking it now.

 

 

[PaulParanoia]

1 hour ago, rockerboy said:

So, to IT contractors, what was the reason for not buying a house

What makes you think the IT folks on here didn't buy houses?  I originally came to these forums as I didn't like the way in which the housing market was becoming financialised, not because I was priced out.  I stayed for the insightful economic discussions with like minded people.

I'd guess there's a lot of IT folk on here simply because they are sat in front of a computer all day and have access to the internet.

[rockerboy]

1 hour ago, spyguy said:

I think anyone who bought 5 years in London is probably bricking it now.

You may be right for the last 5 years, but the land reg figures still show there has been a positive HPI since 2014  (for now at least).

However if you go back just another 3 years to 2011, you can see there was a rough HPI of 60% between the years 2011 and 2015  (if you believe the figures of course for a particular part of London). It seems that the price in 2019 is roughly the same as it was in 2015 but on a downward trend.

http://landregistry.data.gov.uk/app/ukhpi/browse?from=2010-02-01&location=http%3A%2F%2Flandregistry.data.gov.uk%2Fid%2Fregion%2Fcity-of-westminster&to=2019-01-01

I guess your reflection on the way things are going right now is that you have a "fear of losing" which is quite reasonable of course - I would have too.

But you are quite wrong to think that everyone thinks as strongly as you do - you have no evidence for it - especially if they bought in 2011 - it is just you thinking it yourself, and that is the point really

Edited February 28, 2019 by rockerboy

[Houdini]

4 hours ago, PaulParanoia said:

What makes you think the IT folks on here didn't buy houses?  I originally came to these forums as I didn't like the way in which the housing market was becoming financialised, not because I was priced out.  I stayed for the insightful economic discussions with like minded people.

I'd guess there's a lot of IT folk on here simply because they are sat in front of a computer all day and have access to the internet.

+1 - I have a lot of time to kill when on conference calls and this is one of many I visit

[simvastatin]

5 hours ago, rockerboy said:

Crikey, 5 pages - thats a lot of IT people on here - why are so many drawn to this site?

Genuinely interested here - For the "IT contractor" gentlemen on this site,  Do you think you are tending to see things more as "investments" than you should?

I'm thinking that the capacity to save each month might skew thinking more than realised. Consider that if you haven't bought a house by now (when you could have easily afforded it), why didn't you? After all, most people on a normal salary would be delighted to just get on the housing ladder (affordable etc).

So, to IT contractors, what was the reason for not buying a house - was it:

- Fear of "losing money"?

- Waiting to build up more savings?

- Wanting to time your "investment" in housing so you can buy the "house of your dreams" at a knockdown price - and this is why you are on this board?

- Divorce costs (never at home / work prioritised over partner)

- Other lifetime choice (did you do it though)

- Not wanting to be "shackled" to one place  - need to move around the country

Bearing in mind there is a cruel irony here, any sheeple who bought 5 years ago in London who just wanted a home,  unwittingly "bet" on what it seems to have been a winning financial investment and they probably didn't even know it at the time, or see things as you may do  - all the sheeple wanted was a "home of their own".

Because pornhub gets boring after a few years 

[tm_81]

On 26/02/2019 at 09:28, spyguy said:

Oh fk dont start this...

I socailiase where a lot of oilies drink.

They go 'xx says its fine'

I go - They dont decide hmrc opinion of law.

But they are a barrister.

I dont care, there's loads of barirtsers, they are scammign for business.

Who goes to jail who pays the tax owed - them or you?

I get massively p1ssed of with these idiots and their idiots schemes.

Actually, if they were solicitors OR registered financial services professionals, and they offered their professional opinion that this is legal, it could well be the grounds for a professional negligence claim.

Here is a similar precedent https://uk.practicallaw.thomsonreuters.com/w-008-5000

in this case, they didn't claim early enough (within six years), but it would have been a valid claim otherwise.

 

[Fletcher]

On 26/02/2019 at 09:47, elephant said:

No wonder the advice was so bad, if it’s come from the staff at the local Costa!!

?

[mrtickle]

13 hours ago, PaulParanoia said:

What makes you think the IT folks on here didn't buy houses?  I originally came to these forums as I didn't like the way in which the housing market was becoming financialised, not because I was priced out.  I stayed for the insightful economic discussions with like minded people.

I'd guess there's a lot of IT folk on here simply because they are sat in front of a computer all day and have access to the internet.

He won't answer the question. He's just trolling. It's a standard tactic of people taken in by the name of this website - they forget it's not called "renterswhowantahpc", but all their posts are worded as if it were called that. It's a frequent giveaway.

 

[hp72]

On 24/02/2019 at 07:34, Pop321 said:

Just listened to it.

It leans more to the ‘plight’ of these individuals and that 20 years is fairly unprecedented by HMRC (ie reserved for fraud). One contractor used an agency where this was the scheme so little choice. One individual received a tax bill a week before Christmas....and hearing their partner saying it was then that they broke down (inferred they can’t be interviewed themselves) does genuinely tug on the heart strings  

Despite HMRC saying no one will lose the MAIN home and no one going bankrupt....that seems to be the main argument by those impacted. 

The balance is that it does suggest that these people were at best naive. And one chap says he used the scheme but it wasn’t to avoid tax (albeit that is challenged in terms of the effect was it did avoid tax) but no explanation of why that individual, who owes £300k, did use the scheme if it wasn’t to avoid tax. 

What I find really annoying is that due to the distressed nature of those impacted no one asked “where is the extra money you saved?”. The chap with £300k has no assets. So to be fair he has enjoyed the money and now he pays. With no assets he may find himself better off that those who set aside the money and now have to pay it back. 

One chap owes £700k and retires in 2 years. No mention of age or the vast earnings set aside (or otherwise). Perhaps he may wish to consider option b. 

Other threads on HPC talk about retire early (involves saving hard). The chap who ‘saved’ £300k tax must have been earning big money...but the nature of that individual is earn it and spend it?  We are all different and spending isn’t a crime...but a suggestion of the financial affairs of some of those who have used this scheme, spent all the monies and may well lose little they had left. 

I know a person who has been doing this since the 1990s, getting £500 plus a day from that time with a big blue chip company. As a contractor which I have also been. My sympathy is minimal for those who are caught evading, when significant others are the doing the right thing.imho. now they are landlords to multiple btl properties but that's by the by.

Edited March 1, 2019 by hp72
Disambiguation

[Fletcher]

******ing hell, Paul Lewis is still banging the bleeding heart drum for these scumbags. 

Money Box - The loan charge : Mel Stride interview - @bbcradio4 http://www.bbc.co.uk/programmes/m0002ycr

Sounds to me like Paul I'm a Leftie Lewis has got some personal interest in this issue, not directly his own but probably either current or former colleagues or friends or both. He doth protest too much.

Quite unbelievable how anyone can attempt to mount any kind of sob story defence of these tax dodging scumbags but I guess if anyone's gonna do it it's gonna be a Leftie ?

[Pop321]

16 hours ago, Fletcher said:

******ing hell, Paul Lewis is still banging the bleeding heart drum for these scumbags. 

Money Box - The loan charge : Mel Stride interview - @bbcradio4 http://www.bbc.co.uk/programmes/m0002ycr

Sounds to me like Paul I'm a Leftie Lewis has got some personal interest in this issue, not directly his own but probably either current or former colleagues or friends or both. He doth protest too much.

Quite unbelievable how anyone can attempt to mount any kind of sob story defence of these tax dodging scumbags but I guess if anyone's gonna do it it's gonna be a Leftie ?

Good find.

As a liberal leftie myself.......I guess it depends on your interpretation of left and right. Also any commentators motives for defending these tax dodgers...

I might suggest to only person who was going to defend these scumbags to keep all the tax, retain their wealth and avoid paying into the system is a “righty”.?  Good old entrepeural iniitative. 

However I agree completely re Paul Lewis.....he “doth protest too much”. It would be great if it transpires a close family member is impacted and the bbc had to apologise.?