173 players, 40 clubs and 38 Agents - HRMC investigate

[Maesknoll Red]

https://www.itv.com/news/2019-01-21/record-number-of-footballers-under-investigation-by-hmrc-over-tax-avoidance/

Could be some big fines coming if the courts follow Spain’s example....

https://www.bbc.co.uk/news/world-europe-46957605

[Lrrr]

'the tax office is mainly trying to recoup money from football through civil, rather than criminal proceedings'

Not quite the same as the Spanish cases 

[phantom]

40 clubs in a massive number 

[cider hoss rules]

6 minutes ago, phantom said:

40 clubs in a massive number 

and you'd need a pretty hefty bag for all of them

[Lorenzos Only Goal]

Quote

Clubs can pay a player's IRC as part of their wages and they would be liable for 19% corporation tax rather than 45% as an employee. That represents a saving to the player of £26,000 on every £100,000.

Sensationalist crap, that's incorrect, its only half the story, how do you get money out via company profit is though a dividend issue which is also liable for tax.  It means an effective rate of tax of 39% vs 32% on a 100K looks less appealing, its more likely the revenue is going after aggressive tax avoidance schemes.

[BTRFTG]

Of course what the gobshite Stride fails to point out is there are already criminal laws with which to charge persons/organisations who seek to defraud The Treasury, or have previously so acted. He also fails to highlight the utterly scandalous situation that HMRC have the power not only to retrospectively change legislation as to what taxes, duties and levies are due in a period but may thereafter charge punitive damages for sums settled wholly in respect of the liability calculated at the time yet deemed insufficient years later post retrospective changes. In some cases this may be 900% of sum later deemed 'unpaid'. Government permit HMRC to do so given they're so utterly incompetent at drafting tax proposals in the first place.

My reckoning is the vast sums quoted here fall into the category of retrospective liability and are not deliberate evasion.

[Davefevs]

3 hours ago, Lorenzos Only Goal said:

Sensationalist crap, that's incorrect, its only half the story, how do you get money out via company profit is though a dividend issue which is also liable for tax.  It means an effective rate of tax of 39% vs 32% on a 100K looks less appealing, its more likely the revenue is going after aggressive tax avoidance schemes.

Exactimundo, and should be investigated.

[Guest]

5 hours ago, hodge said:

'the tax office is mainly trying to recoup money from football through civil, rather than criminal proceedings'

Not quite the same as the Spanish cases 

Most likely a quirk of our legal system. We have criminal and civil tax offences, but civil is much easier to prove as it's a lower burden of proof. Still looking at very, very hefty penalties as a % of tax saved, on top of the tax due , on top of interest. It probably doesn't represent lesser culpability. 

5 hours ago, Lorenzos Only Goal said:

Sensationalist crap, that's incorrect, its only half the story, how do you get money out via company profit is though a dividend issue which is also liable for tax.  It means an effective rate of tax of 39% vs 32% on a 100K looks less appealing, its more likely the revenue is going after aggressive tax avoidance schemes.

Would that be personal service co and killed by the new rules next tax year? Isn't there some corporate facilitation of tax avoidance law now too? expect that will kill clubs getting involved in anything aggressive.

[Lrrr]

27 minutes ago, 29AR said:

Most likely a quirk of our legal system. We have criminal and civil tax offences, but civil is much easier to prove as it's a lower burden of proof. Still looking at very, very hefty penalties as a % of tax saved, on top of the tax due , on top of interest. It probably doesn't represent lesser culpability. 

Could make people more co-operative? No threat of criminal charges against them, Spain having that suspended sentence thing for under 2 year sentences.

[Guest]

23 minutes ago, hodge said:

Could make people more co-operative? No threat of criminal charges against them, Spain having that suspended sentence thing for under 2 year sentences.

Agree. Do a deal, as Ronaldo seeminglh has with their authorities. HMRC have had a few disclosure schemes before where you could come forward hands up and the penalties were less. Remember hearing about a Leichenstein disclosure arrangement which was quite wide. 

Could be wrong but I think there are some civil offences where the penalty is 200% of the tax unpaid, plus the tax not paid, plus interest... Could be worse than porridge haha 

[BTRFTG]

34 minutes ago, 29AR said:

Most likely a quirk of our legal system. We have criminal and civil tax offences, but civil is much easier to prove as it's a lower burden of proof. Still looking at very, very hefty penalties as a % of tax saved, on top of the tax due , on top of interest. It probably doesn't represent lesser culpability. 

It's also perhaps the point I made about the extraordinary and draconian powers HMRC hold. Lack of criminal charges often indicate that, er, no criminal offense has taken place. When HMRC retrospectively change tax policy (yes the liability gets backdated,) it becomes an offense not to comply in making revised payments demanded but no offense would have been committed prior to the change as, at the time, all monies payable had been. The fact HMRC may also 'fine' for incorrect filing, incorrect payment, interest et al against retrospective changes is disgraceful. In practice they 'negotiate' - pay us the additional tax we're now raising and we'll forgo any additional penalties we are empowered to levy. Interestingly, the shyster accountancy companies who often provided the tax advice in the first place have the get out of not having provided inappropriate advice (clients can't sue for losses,) even though it ends up leaving clients majorly out of pocket.

[Guest]

14 minutes ago, BTRFTG said:

It's also perhaps the point I made about the extraordinary and draconian powers HMRC hold. Lack of criminal charges often indicate that, er, no criminal offense has taken place. When HMRC retrospectively change tax policy (yes the liability gets backdated,) it becomes an offense not to comply in making revised payments demanded but no offense would have been committed prior to the change as, at the time, all monies payable had been. The fact HMRC may also 'fine' for incorrect filing, incorrect payment, interest et al against retrospective changes is disgraceful. In practice they 'negotiate' - pay us the additional tax we're now raising and we'll forgo any additional penalties we are empowered to levy. Interestingly, the shyster accountancy companies who often provided the tax advice in the first place have the get out of not having provided inappropriate advice (clients can't sue for losses,) even though it ends up leaving clients majorly out of pocket.

As far as I know, but I bow to greater knowledge, it is quite rare for tax policy changes to be retrospective. Didn't Dawn Primorolo get one through? 

Again bowing to greater knowledge but wasn't there some ECJ case where the courts said 'against the flavour of the legislation' basically saying the accountants might be smart arses, but if they clearly go against the purpose of the legislation by finding a quirk, f em. Actually I'm not against that; I like the purposive approach, don't look at the Oxford dictionary meaning of the law, think what  was written and what it was intended to protect against and apply it like so, don't play fox and chicken. 

Tax payer might have a claim against his tax advisor for negligent advice anyway

[BTRFTG]

1 minute ago, 29AR said:

As far as I know, but I bow to greater knowledge, it is quite rare for tax policy changes to be retrospective. Didn't Dawn Primorolo get one through? 

Again bowing to greater knowledge but wasn't there some ECJ case where the courts said 'against the flavour of the legislation' basically saying the accountants might be smart arses, but if they clearly go against the purpose of the legislation by finding a quirk, f em. Actually I'm not against that; I like the purposive approach, don't look at the Oxford dictionary meaning of the law, think what it was written and what it was intended to protect against and apply it like so, don't play fox and chicken. 

Two things here but HMRC do it all the time (and I've friends who've been seriously impacted.) 

1. Under GAAR one is obligated to be just and reasonable in one's affairs based upon the 'intent' of what the respective legislation was designed to achieve, even though it may not be what the policy/statute says. That covers off things like Rangers 'BIG TAX CASE' where use of SPVs and non-repayable loans were designed to (then) legally exploit loopholes in the drafting. That's now illegal and a criminal offense.

2. There are also instances where the policy/statute was so unclear or badly drafted as to what it's intent was, often unintended consequences (things like offsets against 'luxury' items that become commonplace business tools - Hamilton and his private jets say.) Intent was reasonable business expenses might be offset but nobody considered there to be a few individuals for whom use of such a tool is akin to you or I taking the train and for them wholly reasonable. For example, HMRC are able to specifically rule that private jets ,say,  may not be classed as...back date the revised policy and claim the difference. In Hamilton's case it was also confounded by an element that would now fall under GAAR in respect of VAT on imported goods ( he first registered his aircraft in the Isle of Man.) In this second category HMRC have pretty much free reign in what powers they have. Max penalities can be 900% of the sum levied.

[Guest]

20 minutes ago, BTRFTG said:

Two things here but HMRC do it all the time (and I've friends who've been seriously impacted.) 

1. Under GAAR one is obligated to be just and reasonable in one's affairs based upon the 'intent' of what the respective legislation was designed to achieve, even though it may not be what the policy/statute says. That covers off things like Rangers 'BIG TAX CASE' where use of SPVs and non-repayable loans were designed to (then) legally exploit loopholes in the drafting. That's now illegal and a criminal offense.

2. There are also instances where the policy/statute was so unclear or badly drafted as to what it's intent was, often unintended consequences (things like offsets against 'luxury' items that become commonplace business tools - Hamilton and his private jets say.) Intent was reasonable business expenses might be offset but nobody considered there to be a few individuals for whom use of such a tool is akin to you or I taking the train and for them wholly reasonable. For example, HMRC are able to specifically rule that private jets ,say,  may not be classed as...back date the revised policy and claim the difference. In Hamilton's case it was also confounded by an element that would now fall under GAAR in respect of VAT on imported goods ( he first registered his aircraft in the Isle of Man.) In this second category HMRC have pretty much free reign in what powers they have. Max penalities can be 900% of the sum levied.

But Gaar doesn't apply to VAT, I'm sure I heard that but could be wrong because VAT has abuse of principle.  Hamilton.  I always found odd, because when the jet was then leased to him, he couldn't reclaim so it was only ever cashflow wasn't it?  

[BTRFTG]

8 hours ago, 29AR said:

But Gaar doesn't apply to VAT, I'm sure I heard that but could be wrong because VAT has abuse of principle.  Hamilton.  I always found odd, because when the jet was then leased to him, he couldn't reclaim so it was only ever cashflow wasn't it?  

Possibly a poor example and not sure of the detail but there was an advantageous arrangement of using differential tax rates by flipping ownership via IoM, think he owned the planes he leased back to himself. In that respect I believe GAAR principle applies to all taxes and dues. And that's the problem, there isn't a strict definition and HMRC retrospectively close what they unilaterally decide as badly drafted policy. Note in the Rangers case HMRC lost the first two cases but kept appealing until they got their way.

[Guest]

4 minutes ago, BTRFTG said:

Possibly a poor example and not sure of the detail but there was an advantageous arrangement of using differential tax rates by flipping ownership via IoM, think he owned the planes he leased back to himself. In that respect I believe GAAR principle applies to all taxes and dues. And that's the problem, there isn't a strict definition and HMRC retrospectively close what they unilaterally decide as badly drafted policy. Note in the Rangers case HMRC lost the first two cases but kept appealing until they got their way.

Yeah the way someone explained the Hamilton case to me was if he bought outright he couldn't get his VAT back as a private person, but by the structure he put in place he put it through a 'leasing business' which meant it could,,, but then when that leasing business chartered flights to Hamilton they would have charged him VAT, which he as an individual couldn't reclaim. So it was basically getting the VAT back upfront and repaying it over time. I think the issue would have been if he was dodging the invoices to himself. Pub talk, totally unreliable haha. 

[Erithacus]

Possibly part of the probe: Cobblers' chairman "untrustworthy and unreliable".

Seems the local council lent the club some £10million for upgrading the site, but a large part strangely ended up in rebuilding his home. Curious...   

https://www.bbc.co.uk/news/uk-england-northamptonshire-46988169