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Retrospective Taxation

Is Retrospective Taxation Fair?

I am a professional IT contractor who worked and lived very happily using the ‘prescribed’ and accepted method of operating through a limited company with few breaks from 1987 until 1999. Coinciding with Labour coming into power, IR35 and off-shoring came into existence both of which adversely affected, and still do, the contract market.

After an alarming and almost continuous 5-year break (containing just a 3-month contract and 6 months of factory work paying little more than minimum wage), I returned to contracting in 2006 to a very different financial and administrative landscape as off-shoring continued and IR35 ‘evolved’. As a consequence I was advised by those around me to use an arrangement rather than utilise the traditional Limited Company – I must stress I did not create or seek out the arrangement, it was created as a reaction to IR35 by providers many of whom still exist and still advertise their products today and these arrangement providers/promoters so far seem exempt from investigation despite still making huge profits.

During my brief time using the arrangement HMRC opened enquiries and said they would “let me know if something was wrong”. They did not until nearly ten years later. I eventually resigned from the arrangement soon after starting as to me, something did not seem right. Again, HMRC remained silent but early in 2016 after I questioned HMRC regarding their inactivity, they told me it was my responsibility to ask them to close their enquiries.

Now, my career is as good as over – off-shoring has seen to that. And if work does miraculously appear, “improved” IR35 makes freelancing very unattractive: we work under intense pressure, often have to relocate at our own expense but would have to pay at least as much tax as permanent employees but receive none of their benefits and could face crippling court cases and fines if we are “proved” to fall within IR35 but originally declared (and it can be strongly argued this is the correct position) outside.

I now feel it is now too dangerous to work as a freelancer even if I could. Remaining on benefits is a much better option until I am (if at all) fortunate enough to be offered a position that pays little more than minimum wage (the only work outside IT I have ever managed to secure). I was once a productive IT professional contributing to the economy by paying much tax and living expenses – not any more. I am now entering my tenth year of unemployment, claiming benefit for the third time.

To cover 10 years of HMRC inactivity, the 2019 Loan Charge has been created. If implemented is as HMRC suggest, the 2019 Loan Charge is retrospective taxation at its most aggressive. Retrospective taxation to a contractor makes working freelance itself unattractive since however much tax it is agreed I pay at the end of any given tax year, that may alter significantly in years to come as changes are made and then applied retrospectively, with fines and interest added even though at the time, the “current” rules were obeyed. Right now, I may have a fine to pay  with interest accruing from this date on for a charge yet to be created – I cannot prepare for this, take alternative action or seek advice (from HMRC or other advisors) as that rule does not currently exist. Maybe it will in another ten or so years. This sounds ludicrous but that is exactly the position we are in now as retrospective taxation gathers ‘acceptance’ – rules are introduced regularly to maximise tax in ways that even tax specialists find draconian and extreme – bad accountancy in HMRC’s favour would not have produced a tax bill remotely close to the figure HMRC want from us to settle added to which will be penalties, interest and potentially Inheritance Tax (had HMRC carried out their enquiry in a timely manner (as specified in their Charter), I would have been made aware of all of these at the time, paid my tax and avoided what are now crippling additions that have accumulated during HMRC’s nearly 10 years of silence).

Like me, most of the people I have spoken with want to settle but the ludicrous amounts HMRC want and the time given to pay (often 90 days) prevents this. A mutually acceptable settlement must be reached.

HMRC’s rules stipulate an enquiry must be opened within a six year window once the tax return for that year has been submitted, the tax position resolved and the enquiry closed. Enquiries that HMRC opened (and it appears incorrectly for many I might add – this is still being investigated) based, in my case, on returns for tax years 2005-06 and 2006-07 are still open right now and I have been informed, will never close as investigation and potential litigation may be required. Furthermore, the 2019 Loan Charge now effectively opens any year during which an arrangement was used regardless of its previous status. It appears HMRC are continually moving the goalposts not just in all three physical dimensions but in time too. This also suggests to me that anyone who has ever paid tax could be investigated as there appears to be no distinction between open and closed tax enquiries within any time frame. This situation does not provide a solid work and life foundation.

Will I eventually be retrospectively taxed on my benefits I wonder?

I enjoy a simple life. I have my home and my health although the latter has been affected. And If HMRC has its way, I may lose the former too, and most of my possessions, and all to pay an alleged dept on the grounds that HMRC believes the arrangement I used simply “didn’t work”.

How can this be even remotely acceptable let alone fair?

I was no better off having used the arrangement compared with a Limited Company (where claiming for expenses was allowed but not so in the arrangement), it just simplified my tax position (so I thought) allowing me to focus on work rather than the bureaucracy. Now of course, with the continuation of off-shoring, ‘improved’ IR35 and the 2019 Loan Charge, I am fighting a stressful battle just to find work let alone keep it and to attempt to avoid or prepare for potential bankruptcy.

I have come to terms that at 54 my career is as good as over. What I cannot come to terms with is that HMRC want to penalise me with maximum tax, penalties and potentially Inheritance Tax because of that one mistake I made over ten years ago that was, and still, isn’t illegal. It’s just that HMRC don’t like it. That is all.

After I presented the above in the form of an email to my MP I received what appeared to be a template letter that addressed little. It simply repeated what I had originally pointed out but did add that the Government are grateful for the contribution we make – they then reward us with Retro Tax, ‘improved’ IR35 and continued off-shoring.

 

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By Anonymous Contractor

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53 thoughts on “Retrospective Taxation”

  1. Anna Garden

    Sadly an all too familiar story. I used an umbrella arrangement to avoid IR35 and admin complexity and am now caught up in this whole retrospective tax mess. I can’t eat or sleep for worry of what it will mean for my family ( I have 3 young children) as bankruptcy is certain. And there are around 40 thousand contractors in the same boat – a lot of whom are unaware of the 2019 Charge. HMRC and the govt should be targeting the promoters and QCs who designed and approved these arrangements not the end users who trusted in professional advice.

    • Jason

      I am not a contractor but utilised a DOTAS scheme. As we all know these schemes are legal as was the arrangements used by contractors involved with IR35.
      My mistake was believing that I would be treated honestly and in a timely and cost effective manor by hmrc, as quoted in their handbook.
      What I have learned is that when hmrc are faced with a situation that does not suit them, they will use any means possible to put the tax payer in a position where he/she can no longer put up a fight, i.e. The use of APNs and retrospective action.
      If you cannot afford to pay the APN the fight is over and hmrc declare victory.
      They know they cannot win without retrospective action, the powers that hmrc possess are routinely abused as they attempt to force people to settle.
      A big issue for me is accountability, an hmrc officer can basically do and say anything he/she chooses and take as much time as they like doing so, safely knowing that if someone’s life is ruined and a family unit destroyed, or worse, they will never have to justify their actions. This is fundamentally wrong, they are literally playing with people’s lives and do not care what the consequences are, because there is no recourse.
      In all professions I can think of, the conduct of employees is scrutinised in the event of wrongdoing, not so hmrc, this must change.

  2. R

    I am in the same boat. HMRC want £300k from me for “underpaid tax” over the past 20 years. All I did was took professional advice around tax efficiency and reduced admin. Of course I am fighting this but If HMRC get their way, I’ll lose my house, be declared bankrupt and therefore lose my job and career as I work in the financial services industry. The stress is damaging my health. I don’t sleep at night and I’ve contemplated suicide many times.

  3. Lila

    I am in the same boat. HMRC knew about the schemes, allowed them to exist, they even assigned them DOTAS numbers. We declared everything on our tax returns. This act transpires into an entrapment, whereby, it allows HMRC to then open enquires. They then sat on these enquires, nothing was done or communicated for nearly a decade.
    Then, no litigation, access to courts or appeals for us the people whist HMRC introduce retrospective taxation! So bypassing all due process.
    This is an abomination, and the question any intelligent person would ask is why retrospective, what were HMRC doing for 10-20 years whilst these schemes were operating? I have spoken to lawyers in another country who think this is illegal, lunacy and should never be allowed. I had to explain this is now common practise in the UK citing Section 58 2008 Finance Act.
    So, UK Gov introduce a massive unworkable problem called IR35, Schemes start sprouting offering people some certainty. HMRC raise enquires, we agree to test cases, HMRC never brings test cases – continuosly change goal posts, instead they introduce retrospective tax + interest – section 58.
    Then they are now trying it again, bypassing all due process and introducing a new LAW that is backdated 20 years – it is utter lunacy that seems to be accepted as common practise in UK now.
    Lets not forget MPs have exempted themselves on this and section 58. So, we have MPs that vote on ‘LAW’ that they themselves exempt themselves from. How is any of this fair!?
    The human cost in health and finances is beyond torture for most of us,and this human cost is never taken into consideration.

    • Fubar Saunders

      You’re right, Lila. But the only option is to not vote for them. Vote for another party that will reform the tax system. Until people do that, this will continue to happen.

      And if more people vote in favour of it than not, regardless? Well, maybe some of us, if at all possible, should take our trades and skills elsewhere.

      • Mark

        I have moved to Singapore where the tax rate starts at 2% and caps at 20% once you pass 200k SGD (roughly 90k GBP).

        The weather is hot. Cost of living lower so long as you dont own a car (standard 13mile uber ride during rush hour comes to about 10 quid). Standard of living is higher! Facilities and infrastructure are amazing (aircon on tubes, full mobile signal on tubes even in tunnels, standard fiber BB is 1gb and costs about 30 quid a month)

        And to top it off im paid more here than i was in london. Oh did I mention they have the lowest unemployment rate of just about any developped country at 2.3%.

        UK nationals can travel here and receive 3 month renewable tourist visas for as long as it takes them to find a job. Once a job is found the sponsoring organisation applys to the government on your behalf for a visa that is seldom turned down…

      • AlreadyLeft

        “move elsewhere”
        exactly what I did.
        Best decision I ever made.

      • Phil

        Let’s not forget, I am furious that the Tories brought in stealth taxes on contractors dividend allowance and PAYE, but it was Labour that brought in IR35, don’t think for a second Libs would lift anything. So who do you vote for?

  4. Oliver James

    UK is a F*****g s******e, the Gov’s policies are anti hard working, they happily pay to people who do not work, and claim benefits and on other hand, they want to punish the hard working and risk taking few who left permanent jobs or lost their jobs in recession and had to take up freelance work and trying to earn a little more than the other permanent employed, but without any job security, working odd hours which the normal employed would not do.. and contributing to the economy by providing ad-hoc workers rather than companies had to signup more permanent employees which would have added overheads to their expenses. Yet this great contribution of the contractors to the economy is easily ignored and UK Gov has taken up to extortion. You make a representation against the APN, and HMRC responds ignoring all the technical faults you raised about the APN which literally invalidates it, but HMRC responds in a tone that what they say is RIGHT. And then you ask them to address the points raised in the representation and they acknowledge the representation received, yet the DMB chases you like hungry dogs sending extortion letters. And you keep reminding HMRC that a representation is still not addressed and the collection should be put on hold, and again HMRC says they are putting it on hold and again DMB knocks at your door. This is a terrible psychological torture.
    HMRC or UK Government has no level of decency, they offer sweet deals to Google, I wonder at what terms.. and Google can get 1% tax deals and people are not supposed to know the actual deal, UK general population is too Dumb to understand what is happening. Their is no FAIR treatment in UK.

  5. austint

    Same position, same shock, same despair.
    I almost feel fortunate in comparison to others in my profession who are being attacked: there only 4 years that HMRC are going retrospective for.
    Which means my house is gone, of course, but at least no bankruptcy. The agency I went through is insisting that all this HMRC lunacy is planned for, and they’re planning some “day in court” and this may all come to naught — but frankly my faith in them, this country, and its institutions has now reached rock-bottom.
    I have an ejector seat, dual citizenship, which means I can probably find somewhere to carry on. And I would have already gone, I think, if it wasn’t for a hospitalised family member that I am loath to abandon.

    • David

      So, the “dodgy” tax evading schemes have finally caught up with you. The entire self-employed system was long overdue for an overhaul.

      HMRC has always worked on the premise that you can be investigated for any amount of tax dodged, at any part of your life.

      Did I use one of these schemes – yes I did. For a perod of about 3 months. Why did I stop using said scheme – it was in my opinion just too good to be true. If something seems too good to be true then it generally is.

      So then I went down the Ltd company route. So instead of dodging my rax via a shady sheme, I dodged my tax be means of a legitimate scheme. 23% Corporation tax paid by the company and some £90k a year, tax free split between my wife and myself with minimal NI contributions was the reward.

      An overhaul has long been required of the system – HMRC quite simply are losing out on huge revenue streams due to self-employment (both true and false). For as long as only the rich elite of the country used these methods of avoiding tax, HMRC turned a blind eye.

      When they became common practice amongst even electricians, bricklayers and blue collar contractors they decided enough is enough and started to come after us.

      Yes there was a huge furore over the NI contributions change this year, but just wait until January when the tax returns start to be felt for 2015-2016. 7% Dividend tax for a basic rate taxpayer, 34.5% for a higher rate tax payer.

      That is when we shall hear the screaming all the louder.

      • Fubar Saunders

        Grow up David. “Dodged”. You didnt “dodge” anything. You paid what the system said you had to pay. Nobody who played by the rules would call themselves a “dodger”. And, plainly if one of the schemes, you found too good to be true and went down the PSC route, you wouldnt call yourself a “dodger”, unless you were really self loathing.

        Quit trolling, man for gods sake. Not everything is an opportunity for self loathers like you to virtue signal.

        • ETruter

          Using an aggressive scheme clearly designed to avoid tax so clearly outside of the spirit of the law = dodgy.

          The people entering these arrangements fall into one of 3 categories.

          1) Greedy
          2) Stupid
          3) Greedy and Stupid <= Majority of overpaid, piss taking contractors.

          • Tom Redfern

            In five years time, when HMRC come knocking on your door for the tax due based on 20 years using a PSC Ltd co vehicle to aggressively avoid tax, I hope you remember writing these words.

  6. Carl Hamer

    Boo hoo.

    You deserve everything you get.

    I too was approached several times about joining an IOM scheme. Spent about 5 minutes thinking about it before I came to conclusion that is was too good to be true, and if I joined it would be a risky, immoral path to take.

    Take responsibility. No body forced you into this situation, you only have yourself to blame. You were driven by greed and nothing else, so don’t play the innocent victim.

    If it was sooo “difficult” contracting in this environment, then why didn’t you consider working through an umbrella or permanent work?

    Doesn’t add up.

    Pay up like the rest of us have to and stop whingeing.

    • MarkusK

      @Carl Hamer

      “you deserve everything you get”

      Yep, it’s called karma.

      And you also deserve everything you get:
      Compassion is NOT it!

    • Gary

      Carl, you are absolutely right that no one forced us into this situation, and good for you that you feel so morally right.

      My trusted family accountant of 30 years recommended this approach. I’m in IT and tend to leave specialists to their own roles. The fact that it seemingly had approval from HMRC by having a DOTAS number allocated added to my comfort that my accountant knew what he was doing.

      When I first started I didn’t even know it was based in the Channel Islands. It was only when I got an enquiry from HMRC about 4 years later.

      Of course I regret my choice to take my accountants advice. Perhaps in future I should ignore the electricians advice and wire up my own sockets, the outcome

    • Andy IT

      “I now feel it is now too dangerous to work as a freelancer even if I could. Remaining on benefits is a much better option”

      So…. you’d prefer to claim state benefits than take on a contract that’s potentially within IR35?

      Surely t he solution would be to take on a contract and if it’s inside IR35 you should have nothing to worry about retrospective tax being taken, and if it isn’t then perhaps put aside the additional that IR35 would cost you for a rainy day OR just declare all contracts as within IR35.

      You’re either hugely underpaid or massively over claiming on benefits for benefits to pay over contract work.

    • HandsomeBob

      Someone hurt you as child Carl. Or is the I’m alright Jack complex you clearly display. Have some humility man.

  7. Fubar Saunders

    Well, y’all keep voting for the same old same old – New Labour/Blue Labour/Red Tories, as opposed to anyone else who will try and flatten the tax system and get rid of these kind of anomalies.

    For as long as everyone keeps voting these plums back in, it’ll keep happening and nothing will be done about it.

    I dont think this is necessarily about IOM schemes or anything like that. IR35 is a lot more broadbrush than that and certainly in its early years, it was more of an irritant than a real threat. But, now, it is easy to see it for what it really is; regressive, punative, vindictive.

    The entirety of the British tax system is no longer fit for purpose, no matter how you slice and dice it. It is far far too complex, is full of holes that large corporates and globalists drive a coach and horses through with impunity.

    But, in the words of Paul Weller, “the public wants what the public gets”. Will they ever get sick of it? So long as someone else is paying, probably not. There is nothing more that modern day Britain likes than seeing someone get their perceived comeuppance, whether it is warranted or not. Public sympathy is pretty short these days where income is concerned.

    That doesnt mean that punative regressive taxation is right or fair or that the system is fit for purpose.

    I am of a similar age to the OP and I too accept pretty much that my freelancing days, which were a lot shorter than his, are over for largely the same reasons. I’m not giving up on whats left of my career as an IT Professional like he has though, not yet, but all of our journeys are different. I would like to think that an awful lot would have happened by 2019 and by then this odious plan will have gone down the gurgler, but… we shall see.

    Depends on who is in Downing Street by then and what kind of vision they have. Just hope it isnt McDonnell. If you think its bad now, you’ve seen nothing yet.

  8. Brian

    I saw the writing on the wall, moved to permanent employment with a good final salary scheme. 10 years later they closed the final salary scheme and I retired early. I have been asked to contract since then, but why bother if HMRC is so punitive, this is just creating a skills gap for the country.

  9. Tzctcont

    There is no point for you to whine here, if you don’t organise a pressure group to defend your interests and make noise in the press you will be taken, one by one, by the HRMC snippers.

    As for the 2 or 3 righteous childish people gloating about their superior morality, in which way can we make you understand that these schemes were declared and people were upfront about them?

    And as for HRMC pursuing tax bills forever, why there isn’t a statute of limitation? Let’s say 10 years and they shouldn’t be able to pester you, and certainly no change should be retroactive, it is ridiculous that such an obvious measure of fairness is even in doubt, even many banana republics don;t allow retroactivity in the dealings with the government for obvious reasons.

  10. Hard Worker 1667423

    Retrospective legislation is plain wrong. End of.

    Those commenting based on self righteous beliefs have missed the point

  11. Thq Q

    The hypocrisy of the tax man on this is a joke.

    Unless these schemes or individuals really were taking the piss ( “law of unintended consequences” etc) , then going back umpteen years is particularly spiteful. More so if some of those schemes were IR-approved.

    But as always, the IR know very few of you have the finances/time/resolve to fight your case in court.

  12. joolsey86

    I signed with a company in 2003 to 2006 as we were recommended by a colleague a scheme which bypassed the draconian ir35 law and was approved by Counsel.

    The QC Counsel, even sent me an email confirming that the scheme was legal and approved.

    I am faced with 3 years worth of loans. I got out in 2006 when Gordon Brown introduced the Dotas and smelt a rat. I had no idea 14 years later they would be going after me.

    I cannot believe this is a Conservative government. They have no sense of fair play.

    They should be penalising the people who can afford to pay. The qualified QCs and the qualified accountants that sold us these schemes.

  13. AlreadyLeft

    I see only two solutions. The first personal, the second for society as a whole.
    1. Leave the country. I did, and took my money with me, and the UK can suck it until wither I die, or it’s all gone and I come back and live off the state which drove me out in the first place.
    2. People en-masse stop paying tax until the government realises it can’t bully them like this without social collapse. The government is supposed to serve us, remember? If it doesn’t it needs to be dismantled and replaced.

  14. Ying Tong

    Oh come on. Reward is directly proportional to risk. You embark on a high risk strategy against an organisation with infinitely greater powers and resources. For that you obtain the increased “reward” of unrealistically low levels of taxation. You make no provision for the risk going against you. You consume the reward. You come on here and blame everyone but yourself. A fool and his money are soon parted.

    • AlreadyLeft

      You’re either ignorant, stupid, or both.
      I never had a permanent job in my life.
      Temping to contracting, with plenty of spells of no work, no benefits, and no stability for my family.
      I had no choice but to try and maximise what income I had when I had it in whatever way I could, whether legal or not.
      These schemes are a way of employers minimising costs, with the responsibility loaded onto the individual. It’s a scam of which we are also victims. But the HMRC refuses to see it that way.
      So, I left with that little money I had, and will stay gone until I die, or until the money runs out and I have to come back to the UK and live off the state. And yes, fuck the UK if it treats its own people like this. I’ll use it any way I have to, like it used me.

      • AintDatSo

        “I had no choice but to try and maximise what income I had when I had it in whatever way I could, whether legal or not.”

        This really is the best comment ever.

        Sheesh.

    • AintDatSo

      Ain’t that the truth.

      Fools the lot of them. Greedy fools at that.

      I wouldn’t waste your time arguing with these idiots (You know what they say about arguing with an idiot), I gave up a long time ago trying to make them see sense. Justice has been served and I for one am very happy about this.

      • Jacko

        Agreed, these tax avoiders blame everyone but themselves when the net closes on them. You were all trying to pay as little tax as possible lets be honest. You will never beat HMRC backed by the government and the general public mood for tax avoiders. HMRC will keep changing the law until they win. Pay up chaps. The game is over.

  15. Etruter

    Just look at all these greedy, self-important overpaid little piggies screaming because they’ve had to pay their taxes fairly like everybody else does.

    It’s sublime.

    Now back to your overpaid troughs pigs. Oink Oink !

    • JayMcl

      Totally sympathise with the OP.

      I joined a famous IOM DTA scheme in 2000 and stayed in it for 6 years because the IR35 rules meant I would end up paying almost 60% in tax. I owe literally hundreds of thousands to that criminal organisation HMRC

      I have always gone private when it comes to healthcare. My 3 children are at private school all of which I PAY out of my own pockets. Ive saved over a million in my SIPP pension and own several properties. All of which I’ve paid for OUT OF MY OWN POCKET.

      I’ve never claimed any benefits or handouts and never will.. So why the hell should I pay any tax whatsoever to help pay for the lazy and feckless. If society are too stupid or lazy to work and pay their way through life then screw society. I don’t want to be a part of it.

      Someone mentioned immoral. Well Retrospective taxes are totally inmoral. And to all those celebrating then I hope they come after you and all your families. Seven curses on the lot of you. I wish you nothing but pain you smug b*****ds

      • Jacko

        Sounds like it couldnt have happened to a more appropriate person. Well done HMRC. I hope they tax you at 99% including penalties for been a dim witted moron.

        • Jaymcl

          Fuck you dickhead. And your family.

          Me? I’m fine. Got more than enough to retire on now even after HMRC steal what’s rightly mine.

          Besides, I emigrated to Australia a few years ago and won’t be returning. So you can keep your pathetic society and your jealous sour grapes. I’ll just enjoy my retirement in a far superior country that rewards success.

          • ExContractor

            I left last year. Never to return.
            To me, as an outsider, the UK is becoming a 3rd world country. Only works if you are in the 1%.
            Open your eyes people and stop turning on each other.
            Oh, one last thing to those morally superior knobs. “If you tolerate this your children will be next”.

          • Jacko

            I am from Sydney.

            You post was at 5.32pm UK time (1230 WAST / 230am AEST the next day) then 9.17pm UK time (417 WAST / 617am AEST the next day). On a Wednesday.

            If, indeed, you are in Australia you must work nightshift in a warehouse on a low income?

            People who list their wealth usually have very little.

            6 years in schemes to only owe a few hundred thousand means you were on a pittance of an income.

            The fact you are so angry about a few hundred thousand (which is peanuts) means you are worth very little.

            I conclude you are a liar.

            I am just very happy it is affecting you very badly.

    • HandsomeBob

      I’m still richer than you though 🙂

  16. Backrubber

    Is there anyone out there who worked through Actinium Management Ltd from about 2003 to 2007? I’m trying to find out if anyone who received a tax enquiry letter from that period has ever heard anything since.

  17. Hard Worker 1667423

    There seems to be a minority of comments on here which smack of someone who has spent 10 years spitting and grinding their teeth, while wishing they had the opportunity or entrepreneurial spirit to work and arrange their finances in a perfectly legal way which made them and their families better off, only to find out, due to retro legislation, it wasn’t better so can now come out blowing raspberries like the kiddies in the playground. Shame.

    Look beyond the retro-jealousy and current relief to see the bigger problem people. I feel for the author.

    • Another Hard Worker

      I worked as a contractor for 25 years, sometimes as a Ltd company contractor, sometimes as a sole trader, and for a couple of years through a “scheme” provider.

      I don’t feel any “retro-jealousy” about any of the ways in which I worked. For me, the frustrating thing is the amount of time it takes HMRC to determine how much money is owed (if anything) after someone receives a tax enquiry letter.

      As far as I can tell, it’s perfectly ok for HMRC to keep an enquiry open for as long as they want.

      I have a couple of years myself when I received such letters, both dating from about 12 years ago now. I have never heard a single word from HMRC since. At the time, I was told (by the scheme provider) not to contact HMRC directly myself, so I don’t know if I owe anything. I would gladly settle with HMRC so that I can draw a line under the mistake that admit I made … quite a long time ago now.

  18. Hard Worker 1667423

    Keep looking over your shoulder contractors… the tax man is waiting with his next tranche of retro legislation.

    I genuinely feel for anyone who has a ltd company, uses an umbrella, sole trader or similar. If your partner took dividends, you took divis and minimum salary… whatever it is.

    Nothing is certain any more (well, not as far as tax goes anyway).

    • Tax Rate

      Isn’t this a bigger fear than the tax: the loans being called in for repayment?

    • The Q

      “Nothing is certain any more (well, not as far as tax goes anyway).”

      As far as retrospective tax goes, though the jobsworth Nazis in the IR would no doubt like to retro attack everything and anything as far back as they can, their limit will be anything that :

      1. would cause an utter PR sh*t-storm against them in the wider community

      2. catch someone in their net with very deep pockets who will see them in court and probably win (we know the IR are scared silly of large legal bills + case precedents being set against them)

  19. Chris

    Let’s imagine the govt suddenly decided that anybody who purchased a house since 2000 now had to pay a retrospective tax of 25% of the purchase price and that everybody would also have to pay interest and fines on any amount owed.

    People would cry out “But that’s not fair, we played by the rules at the time, you can’t do this”. This is no different.

    If we let the govt keep introducing retrospective legislation like this there is no limit to what they could impose this crap on next.

    • Tax rate

      Is anyone willing to volunteer what tax rate they paid, expected to pay or “saved” using these schemes?

    • Another Hard Worker

      These things do happen …

      After the unification of East and West Germany, the German government “invented” some retrospective taxes in order to help pay for the unification. The taxes were totally unfair, but the government did it just because they could.

  20. Mac p

    Having read this thread would like to add my comments:

    The Government must be held to account on indistinct early IR35 rules making people scared of indistinct legistation thus making genuine hard working contractors suseptable to these schemes, at the time and even now legal schemes.
    I genuinely feel very sorry for some of the stories listed here, and am quite discusted at the ‘tough luck you deserved it ‘ comments – to all these authors dont forget an IR35 enquiry is only round the corner for your business . I hope the long awaited Taylor Report will shed some light to the Government on to how to clarify clearly what is inside IR35 and what is outside as time goes on

  21. Shibu

    These companies are from developed world and this is how they become developed ? by looting and invading taxes from other countries ? Why should not India or any other country not ask for a rightful tax ? Sorry to say, these countries maybe developed but not civilised yet. They don’t know how to conduct business even with a little bit ethics or civil sense. If India is giving its resources (electricity, land, spectrum) giving access to its market of 1.3 billion people, it has every right to demand a rightful tax as per countries law. If they don’t learn how to conduct business, nobody is forcing them to conduct unethical business in India. India has not opened a charity for people to come and simply use all it resources, access market and take away all the profit. We should be more concern about promoting unethical business than some bullshit ranking (if it favours unethical business). These companies do the same kind of business in Africa, South America… where people are not aware of DOUBLE STANDARD accounting rules. They twist the accounting numbers just to escape rightful taxes. Why didn’t they paid the taxes or atleast reverted, when asked. Its a shame, sometimes It will be Indian accountants how will help them in doing so.

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