"Possibly the Worst Tax Avoidance Scheme Ever" - report on Property118's buy-to-let tax scheme

[Dyson Fury]

By the way, if you are going to look at the P118 website, do please access it using a link from HPC.  Mark likes to think that his P118 website is worth a fortune, because of its high level of traffic, with his expert SEO optimisation for people searching online for "buy-to-let", "landlord tax advice" or similar. It really annoys him when he looks at his web traffic statistics and sees a high proportion of pageviews coming from links on HPC...

[Man of Kent]

On 17/11/2023 at 10:59, regprentice said:

it will be interesting to see what feedback these get when they go out. 

P118 havent written anything about Dan since his 2nd article on the 9th and they have deleted some of the more recent threads on the topic. i think they might go completely silent now. The way their forum works appears to be that you submit a request for a thread to be opened. i doubt they'll open a thread on this topic for their punters to use as a soapbox. 

They've gone awfully quiet, haven't they? I'd love to know what's going on behind the scenes. 

[2buyornot2buy]

15 hours ago, Man of Kent said:

They've gone awfully quiet, haven't they? I'd love to know what's going on behind the scenes. 

I expect you know what's going on... lots control shift delete and noticeable increases in small particulate matter. 

Edited November 19, 2023 by 2buyornot2buy

[Frankie Teardrop]

Was Jeremy Chunt a client?

 

[jd678]

Anyone else spot this in the Autumn Statement:

 

Tackling the Tax Gap

The government is committed to a tax system that is easy for businesses and individuals to engage with, and where everyone pays their fair share. The Tackling the Tax Gap package of measures is the largest since 2016, raising £5 billion of tax revenue over the next five years, which will contribute to funding our public services.^{[footnote 54]}

The government is investing in HMRC’s ability to support individuals and businesses who are unable to pay their tax debts by increasing HMRC’s debt management resource. This will allow HMRC to better target their debt collection activity, pursuing those with tax debts that can afford to pay, and providing support to those that are temporarily unable to pay. The government is also taking action against those who continue to bend or break the rules, by reducing opportunities for tax fraud in the construction industry and taking strong action against promoters of tax avoidance.

[Orb]

7 hours ago, jd678 said:

The government is investing in HMRC’s ability to support individuals and businesses who are unable to pay their tax debts by increasing HMRC’s debt management resource. 

Jesus Christ, only the government could put two words such as "tax" and "debt" together like that, and make it into a thing. 

[Si1]

Evidence suggests the eye of sauron/HMRC has settled its gaze on property118 etc

https://www.taxpolicy.org.uk/2023/11/28/what_happened/

 

[2buyornot2buy]

1 hour ago, Si1 said:

Evidence suggests the eye of sauron/HMRC has settled its gaze on property118 etc

https://www.taxpolicy.org.uk/2023/11/28/what_happened/

 

P118 lurkers on here, of which I'm sure there are a few, Dan has some of the best free advice you'll get. 

"Affected clients should sack Property118 and appoint an appropriately qualified independent accountant or lawyer". 

Chop chop. 

 

 

[Loving The Crash]

On 19/11/2023 at 19:46, Frankie Teardrop said:

Was Jeremy Chunt a client?

Looked up his company at Companies House:

 

Geared up to the eyeballs?

[Man of Kent]

Looks like the lawyers have scented blood in the water. 

[msi]

Just now, Man of Kent said:

Looks like the lawyers have scented blood in the water. 

Christmas has come early

[2buyornot2buy]

5 hours ago, Man of Kent said:

Looks like the lawyers have scented blood in the water. 

Someone smells blood in the water. 

Not that I care but I'd encourage anyone affected to do their research before engaging with any firm. 

[regprentice]

18 minutes ago, 2buyornot2buy said:

Someone smells blood in the water. 

Not that I care but I'd encourage anyone affected to do their research before engaging with any firm. 

This Podcast will be an interesting listen. im sure it'll help this lot drum up business.

i'm surprised by how happy lawyers, accountants and so on are to casually discuss their business on podcasts.in this day and age. Surely they're giving away their gameplan to the defendants brief? 

[bumble bee]

How big is the interest-only mortgage timebomb - and what can people do?

 

Quote

 

I've got an interest-only mortgage - and no way to pay it off

The interest-only timebomb facing some homeowners has been a major concern for some years in the mortgage market.

It refers to a sizeable chunk of borrowers with interest-only mortgages and no plan to repay them.

In the past those affected tended to be those whose endowment policies hadn’t performed well enough to clear their debts, but the early-2000s boom also created a chunk of homeowners who borrowers tempted to borrow big on interest-only by banks, with no plan of how to pay that off.

...

https://www.thisismoney.co.uk/money/lunchmoney/article-12809751/Ive-got-mortgage-no-way-pay-LUNCH-MONEY.html?ico=mol_desktop_money-newtab&molReferrerUrl=https%3A%2F%2Fwww.dailymail.co.uk%2Fmoney%2Findex.html&_gl=1*tzhkzq*_ga*MTA4ODI4Mzc3Ny4xNzAxMzgwMjA2*_ga_XE0XLFFF16*MTcwMTM4MDIwNi4xLjEuMTcwMTM4MDI2NC4wLjAuMA..

 

 

[Man of Kent]

On 30/11/2023 at 20:34, regprentice said:

This Podcast will be an interesting listen. im sure it'll help this lot drum up business.

i'm surprised by how happy lawyers, accountants and so on are to casually discuss their business on podcasts.in this day and age. Surely they're giving away their gameplan to the defendants brief? 

Here you go.

[Will!]

On 30/11/2023 at 20:34, regprentice said:

i'm surprised by how happy lawyers, accountants and so on are to casually discuss their business on podcasts.in this day and age. Surely they're giving away their gameplan to the defendants brief? 

It's all disclosed at case management meetings.

[NorthamptonBear]

Less Tax For Landlords - LT4L - this popped up in my feed

Complaint to ICAEW (accountant org/"regulator")

https://www.taxpolicy.org.uk/2023/12/01/bailey_complaint/

[Man of Kent]

Do the ICAEW sell popcorn at their misconduct hearings? Asking for a friend.

[regprentice]

10 hours ago, Man of Kent said:

Here you go.

Thanks for that. Interesting ...but very much a 45 minute sales pitch for lawyers.

Night and day diffrence between the interviews with Dan and with the solicitors - Dan explains everything in plain english but the Lawyers are parroting broad generalisations "we'll have to work really hard, its really difficult, when i write a letter my letters are 25 pages long, get registered with us as soon as possible, times running out, you dont need to pay me anything now..." all with a gentle push to "no win no fee" where they'd expect to rake it in when the cases are won.

I didn't get any sense from that podcast that the lawyers involved had any particular skill here, and theyre leaning heavily on the Tax Policy Associates articles...  "Dan Needle, in one of his excellent articles, identified something called 'causation' ". i'd be genuinely worried if thats the first time my lawyer has come across causation.

Its quite clear the Lawyers here want to paint the landlords as innocent "client victims" of P118. One of them says "tax avoidance here is debatable"... i dont think it is mate. its the sole purpose of the whole scheme. But he seems to argue that the "client victim" solemnly intended to sell the property and pay the correct CGT at some point in the future and the fact that theyve got a CGT bill unexpectedly overdue now is because a big boy did it and ran away. 

Edited December 2, 2023 by regprentice

[17clarence]

8 hours ago, regprentice said:

Thanks for that. Interesting ...but very much a 45 minute sales pitch for lawyers.

They can smell blood, and desperate, greedy mugs who can be fooled twice.

[spyguy]

9 hours ago, regprentice said:

Thanks for that. Interesting ...but very much a 45 minute sales pitch for lawyers.

Night and day diffrence between the interviews with Dan and with the solicitors - Dan explains everything in plain english but the Lawyers are parroting broad generalisations "we'll have to work really hard, its really difficult, when i write a letter my letters are 25 pages long, get registered with us as soon as possible, times running out, you dont need to pay me anything now..." all with a gentle push to "no win no fee" where they'd expect to rake it in when the cases are won.

I didn't get any sense from that podcast that the lawyers involved had any particular skill here, and theyre leaning heavily on the Tax Policy Associates articles...  "Dan Needle, in one of his excellent articles, identified something called 'causation' ". i'd be genuinely worried if thats the first time my lawyer has come across causation.

Its quite clear the Lawyers here want to paint the landlords as innocent "client victims" of P118. One of them says "tax avoidance here is debatable"... i dont think it is mate. its the sole purpose of the whole scheme. But he seems to argue that the "client victim" solemnly intended to sell the property and pay the correct CGT at some point in the future and the fact that theyve got a CGT bill unexpectedly overdue now is because a big boy did it and ran away. 

Dan the man is concerning the legal dos n donts, the airy fairy abstract stuff.

The geordie barrister is handling the aftermath, the clean up, legal mops n buckets.

I listened to it yesterday whilst working.

In short -

Youve fked up.

Start a claim against the P118s PI insurance.

Get new solicitor/accountant and throw yourself on HMRC mercy.

Start the PI claim ASP as the insurers are going to try and run the claim out of time.

 

 

[Locke]

On 24/11/2023 at 19:06, jd678 said:

taking strong action against promoters of tax avoidance.

That is ominous.

[Locke]

On 02/12/2023 at 22:27, regprentice said:

"tax avoidance here is debatable"... i dont think it is mate. its the sole purpose of the whole scheme.

It is debatable....was it tax avoidance or was it tax evasion? 

Anything advertised as "pay less tax" is tax avoidance. Putting money into SIPP is tax avoidance.

[Dyson Fury]

1 hour ago, Locke said:

It is debatable....was it tax avoidance or was it tax evasion? 

Anything advertised as "pay less tax" is tax avoidance. Putting money into SIPP is tax avoidance.

You are absolutely correct... I was taught that keeping your (legally acquired) savings money under your mattress was technically "tax avoidance", because by not earning any interest on your savings you were not having to pay any tax on it.

Unfortunately, HMRC no longer use this simple distinction.

https://www.gov.uk/guidance/tax-avoidance-an-introduction

Quote

Tax avoidance involves bending the rules of the tax system to try to gain a tax advantage that Parliament never intended.

It often involves contrived, artificial transactions that serve little or no purpose other than to produce this advantage. It involves operating within the letter, but not the spirit, of the law.

I think they now reserve "tax evasion" to mean just not paying tax that is due, e.g. not reporting income from shares, property etc that you know to be taxable.

[msi]

8 minutes ago, Dyson Fury said:

You are absolutely correct... I was taught that keeping your (legally acquired) savings money under your mattress was technically "tax avoidance", because by not earning any interest on your savings you were not having to pay any tax on it.

Unfortunately, HMRC no longer use this simple distinction.

That's simply incorrect.  You can always choose to put your money under the mattress and forgo interest. That isn't avoidance as you are earning no interest to start with.  By your logic, every dole claimant is 'avoiding tax' by not working and paying income tax.

Arranging your affairs to pay less (or even no) tax when you were due to pay tax, by taking advantage of allowed mechanisms, is tax avoidance.  Using an ISA is a perfect example of this. 

Quote

https://www.gov.uk/guidance/tax-avoidance-an-introduction

I think they now reserve "tax evasion" to mean just not paying tax that is due, e.g. not reporting income from shares, property etc that you know to be taxable.

Tax Evasion is an illegal attempt by misrepresent your situation to avoid Tax or to take advantage of mechanisms that were not intended for you. 

 

In between is a deliberate grey area of aggressive borderline tax avoidance.  Where folk try to misrepresent their situation or take advantage of mechanisms that were not intended for them, but haven't yet been formally deemed illegal even though they have no leg to stand on as past precedents don't support them.  This is why wheezes such as the P118 have to be declared and given a unique reference.  Once identified and judged they neatly move from the grey into Tax Evasion.