Tag Archives: 2019

the ICAEW savages HMRC over latest retrospective tax stunt


ouch

Presented without commentary, here are a few extracts from the Institute of Chartered Accountants of England and Wales (ICAEW)’s response to HMRC’s “Tackling Disguised Remuneration” technical* consultation – a.k.a. “the Osborne Ultimatum”

“We are very concerned about the proposals in the consultation document as they contravene
generally accepted notions of fairness and break the constitutional convention against
retrospective legislation, imposing tax charges in cases where taxpayers already had legal
certainty that none were due.
(…)
It is not acceptable for HMRC to create a retrospective tax liability where none currently exists,
especially as HMRC has been aware of loans to employees (referred to in the consultation
document – and adopted here for convenience only – as disguised remuneration (DR)
schemes) since at least 1999.(…)

To introduce legislation which affects transactions which were entered into up to 17 years ago (measured from the current year) where HMRC
has taken no timeous action despite knowledge of the alleged avoidance is likely to lay the proposed legislation open to challenges under the Human Rights Act (…)

HMRC should apply existing legislation rather than giving the impression of
being unable to take action by proposing new legislation duplicating what is already there.

On the international scene these proposals when considered in the light of other recent and
proposed changes to employer taxes and payroll, benefits-in-kind and expenses reporting
processes are making the UK appear a more ‘difficult’ country in which to locate staff, which
may not be desirable in today’s fragile economic climate.

Is it us, or is a can of worms about to be opened?

* “we intend to make it happen whether you like it or not, just need to work out the details”

 

The Osborne Ultimatum: are we all being played?

Osborne ultimatum

Some serious food for thought for all victims of APNs regarding the infamous “2019 charge” on Contractor Loans (from gordo at the AccountingWeb forum)

“Tax planning, tax avoidance, tax mitigation…however you want to describe it, it is perfectly in order to resist HMRC from putting the largest shovel in one’s stores. So long as it is within the law.

Interesting that many are happy to give their opinions (not fact) on how the law should have worked and then back HMRC in their wish to dispense with tradition and rules and propose a law sometime in the future, which impacts upon planning undertaken many years ago within the law that existed at that time. Interesting that many seem to know better than the QC’s. However, HMRC do not make the law. They may propose something, but it’s Parliament that creates the law and seeks Royal assent.

I find it intriguing that HMRC have positioned this 3 years hence and then work on getting Accountants to influence clients to throw in the towel, despite the fact that there is no such law as things stand, further, we don’t know what the law might be if it arrives and therefore what settlement would amount to. The idea that the 3 year period is to allow loans to be repaid is misleading and does not explain why the Government did not act to stop any new loans being created from the date of the budget.

I also find it intriguing that HMRC think it better to employ, no that’s wrong, not employ but contract the services of behavioural psychologists to influence peoples’ behaviour, rather than work within the law.

Any behavioural psychologist would know that one way to create stress is to remove any feeling of certainty and create an atmosphere of uncertainty.

Check Companies House for Behavioural Insights Ltd. A company apparently part owned by the Treasury and part by individuals…and part by an EBT! (DS: and whose motto is “enabling people to make ‘better choices for themselves’” – you couldn’t make it more Orwellian if you tried!).
This company achieved Turnover of £4.8 million and profit of £1,4 million in it’s first period of trading. Impressive for a start-up. Who are/is its main customer(s)?

(https://www.gov.uk/government/organisations/behavioural-insights-team)

Imagine for a moment, now I am not saying this is true, but just imagine that I could convince everyone to give in and settle between now and 2019 under threat of what the law might be one day….then I wouldn’t actually need the law to be passed.

Addendum 20/09/2016 : to further understand the inconvenient truth behind HMRC’s operation, read also this article