Matthew B., London:
“I made the transition in 2007 to become a contractor as I had ambitions to build a successful business outside of work, which would require funding to get started. The father of my partner at the time was an IFA and he immediately sat me down and suggested that there were companies who could handle your contracts in a more tax efficient manner. This resulted in you having more money in the hand, which I could then invest in my business. He was a professional IFA, the details he showed me were all HMRC compliant and legal so of course, I assumed this was a perfectly legitimate way of doing things and proceeded to sign up.
I have followed this company and the permutations it went through over the years, believing at no time anything that I was doing was wrong or not permitted. I checked regularly that the methods were disclosed and checked with HMRC to ensure I stayed above board and was reassured that this was the case. Friends of mine were operating through limited companies for tax efficiency, companies employed accountants to minimise their tax bill and HMRC had no issues with the methods my accountants were using as they were fully disclosed and up front on the tax return each year. There was no reason whatsoever to believe there was any issue with how I was operating.
HMRC have now declared their intentions to change the law about what is and isn’t allowed, and to backdate this for all the years when I was using these methods. I find this a complete breach of trust, integrity and morality. You cannot tell people it is ok to do something, then jump on them when they aren’t looking and suddenly change the rule years after you gave them permission, back dating the law. I would fully support them deciding to change the law to prevent operating tax in a certain manner but to do so with retrospective effect is nothing more than extortion and abuse of power.
Not only that, the vast sum to be demanded will likely be in excess of £300,000. I have already paid a significant portion of my income in tax and accountancy fees for the methods I was using and the money I managed to save, was invested in a business which failed because of the financial crisis and timing, losing me over £250,000. I have just recovered from paying off those debts, the punishment for my ambitions and trying to build something that would benefit Britain and employ many of its citizens. I have certainly not benefited from the slight increase in income.
Now the government have betrayed me, having allowed me freely to pay my taxes in a certain way for over eight years, then done a U turn and told me they have changed their mind and I now owe them a vast sum for tax. They have taken away my freedom and right to manage my financial affairs, they are tyrannically declaring how much money I owe them with no proof, no evidence, no appeal. And it is a sum so vast that there is no way I can feasibly pay it off.
I have never wanted to operate anything outside of the law and I have fastidiously checked the legality of what I was doing every step of the way. There was no malice, no intent to defraud the system. I have not used any public taxpayer services to any degree and have made more contribution over the years than I have cost. But the most important factor is HMRC gave me the green light to do it. If they are now saying it was illegal, then they coerced me to operate in an illegal manner, which is entrapment, plain and simple and they should be answering for that crime, not given the power to demand more money from me than I can ever pay in a lifetime.
I am now with my partner of eight years, who is a tetraplegic in a wheelchair for life as a result of a freak accident falling down some stairs, wanting to start a life with her, get married, have children and own a home. I am the sole provider for us and have to support every aspect of our lives, including allowances for her carers if we go away for the weekend. Taking this responsibility on fully, I now have the prospect of bankruptcy ahead of me because of the completely outrageous prospect of HMRC being able to change the law with back dated effect, having done nothing wrong and followed their rules every step of the way. There is no way we can own a house now, children will be difficult and we won’t have the money to be able to see my family who live on the other side of the world. Our future is now bleak, lacking in hope and my career prospects may be destroyed by insolvency, after dedicating 16 years to building my career working in technology in the city.
HMRC must be stopped before they become a power answerable to no-one, able to hit whomever they wish for tax to plug the hole in the public coffers, with no justification, no morality and no fairness. This would set the precedent for them to decide how much they want to claim and to pick any group of people to target to make it possible. Every human being should be able to know the law of the country they live in, to live within that law and feel safe from persecution. What’s next, changing the legality of smoking and back-dating it so anyone who has smoked for ten years now has to pay a fine or tax? Changing benefit laws with retrospective effect so those living in poverty now have to pay back ten years of benefits? This is illegal, draconian and outside any concept of a democracy or fair society. HMRC need to be publicly accountable, not a bunch of thugs with no law to answer to.”