BN66 - hope for freelance contractors

Pistachio · 13-07-2009, 09:56 AM

Just seen this over on the main site:

BN66 - hope for freelance contractors

Whatever you think of the scheme (personally I think it stinks to high heaven), HMRC's actions here could lead to a dangerous precedent so good luck to them.

Light_Box · 13-07-2009, 10:13 AM

Quote:

Originally Posted by Pistachio

Just seen this over on the main site:

BN66 - hope for freelance contractors

Whatever you think of the scheme (personally I think it stinks to high heaven), HMRC's actions here could lead to a dangerous precedent so good luck to them.

I stumbled across this story on another site recently. It's indeed very worrying that the Inland Revenue can apparently legislate retrospectively. I agree that it could lead to a dangerous precedent but I disagree that the scheme "stinks to high heaven". If a scheme is being promoted as compliant (or compliant at that time), why shouldn't people sign up? Some may argue that such a high take home is unreasonable when everyone else is stuck on plain old PAYE but you have to remember most people view the Inland Revenue as the enemy and want to avoid paying tax whenever possible.

LB

Azeey · 13-07-2009, 10:25 AM

Far be it for me to condone anything that this government does, but this isn't retrospective. They haven't actually changed the existing law.

Get your facts right before you blindly support them.

Pistachio · 13-07-2009, 10:42 AM

I think you need to get YOUR facts right Azeey.

BN66 talked about introducing text to clarify the existing legislation so that it would have the effect it always intended, i.e. producing their own convenient interpretation of the law 20 years later. This was then put in the Finance Act 2008.

HMRC claimed they didn't know this was happening. Of course they did. I'm sure they tried to sign up to this provider a couple of times to see what they were up to.

This stinks to high heaven.

Malvolio · 13-07-2009, 10:50 AM

Quote:

Originally Posted by Pistachio

I think you need to get YOUR facts right Azeey.

BN66 talked about introducing text to clarify the existing legislation so that it would have the effect it always intended, i.e. producing their own convenient interpretation of the law 20 years later. This was then put in the Finance Act 2008.

HMRC claimed they didn't know this was happening. Of course they did. I'm sure they tried to sign up to this provider a couple of times to see what they were up to.

This stinks to high heaven.

Just playing devil's advocate here, why do you think it was any part of HMG's original legislation to allow a UK citizen living in the UK and earning money in the UK to pay no UK taxes? The scheme gives them 85% of the gross and the scheme providers 15%. Nothing goes back to the UK economy. Is that fair?

Agreed it shouldn't be retrospectively applied, and agreed HMRC have known of these schemes for years and done nothing about them. That side is utterly unacceptable. But the schemes themselves...?

Pistachio · 13-07-2009, 11:49 AM

Malvolio, the clue of my viewpoint is evident in my first post:

"Whatever you think of the scheme (personally I think it stinks to high heaven)"

I don't agree with it (I'm all for tax avoidance but not evasion), but this whole thing stinks to me of rewarding HMRC for being slow to react. Seriously, tell me they didn't know about such schemes?

Malvolio · 13-07-2009, 12:18 PM

Quote:

Originally Posted by Pistachio

Malvolio, the clue of my viewpoint is evident in my first post:

"Whatever you think of the scheme (personally I think it stinks to high heaven)"

I don't agree with it (I'm all for tax avoidance but not evasion), but this whole thing stinks to me of rewarding HMRC for being slow to react. Seriously, tell me they didn't know about such schemes?

They did, that's the point. Had they suddenly realised that the rules were being misinterpreted (in their eyes) and moved to correct them there may be a small justification for retrospection. Since they did know about them (after all, most if not all of them would have been registered), and have done for at least 7 years, then there is absolutely no excuse.

The SMG · 13-07-2009, 12:25 PM

Quote:

Originally Posted by Malvolio

They did, that's the point. Had they suddenly realised that the rules were being misinterpreted (in their eyes) and moved to correct them there may be a small justification for retrospection. Since they did know about them (after all, most if not all of them would have been registered), and have done for at least 7 years, then there is absolutely no excuse.

If they're successful in introducing retrospective tax law under BN66 what's to stop HMRC doing something similar for Umbrella Companies (expenses) or Personal Service Companies / Owned Managed Companies (dividends)?

Malvolio · 13-07-2009, 12:53 PM

Umbrellas are already in the frame over expense policies; the problem they face is that their "clients" are legally employees already. I'm not at all sure how that will turn out, but it will probably hinge on what represents a temporary workplace.

Small businesses (and DO NOT use Gay Gordon's term "PSC", it has no meaning!

) would require new laws and they cannot be retrospective.

The SMG · 13-07-2009, 01:30 PM

Quote:

Originally Posted by Malvolio

Small businesses (and DO NOT use Gay Gordon's term "PSC", it has no meaning!

) would require new laws and they cannot be retrospective.

sorry Mal, I've touched a raw nerve! BTW - take a look at just how many companies have picked up on the term "PSC". There are some out there that have literally created an entire PSC brand for that particular service offering. Just so we're clear though, I won't mention that term (PSC) ever again...I promise....