[Football] HMRC

[Birdie Boy]

I would say footballers who exploit loop holes to pay less tax are better than the tens of thousands of plumbers, carpenters, electricians, window cleaners and all other trades people who defraud HMRC of VAT, Tax & NI on jobs where they are being paid in cash.

You missed out hair dressers with 2 diaries/books and no card machine, ie everything cash.. you don't see many skint hairdressers..

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[One Teddy Maybank]

There seemed to be a flurry of arrests and investigations into West Ham and Newcastle, but nothing seems to have come of that. I suppose it is still ongoing.

Needs to conclude and the appropriate 15 point penalty implemented.


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[Weststander]

The simple answer is if you dont like the subject dont read or post on it. I am intrigued as to why a footballer should consider any of his income should not be subject to tax or why some schemes should be acceptable to reduce the tax and some not.

What a coicidence that your question about why “a footballer ...” falls this particular week.

Smells of not so subtle gossip / shit stirring.

 

[father_and_son]

Not only footballers but other sportspeople too have got themselves caught up in tax dodges. Generally a case of unscrupulous advisers and naive and greedy clients.

The issue with a number of these "dodges" is that they were legitimate, authorised and registered schemes that have been referred to, reviewed and approved by HMRC. This is nothing to do with "unscrupulous advisers and naive and greedy clients". This is all above board and a way to reduce your tax liability.

The HMRC can then decide that the activity is no longer acceptable.

Any normal person would expect HMRC to announce that said scheme was no longer acceptable, people could react, move their money, etc etc and from the following tax year no-one would be allowed to use that scheme anymore... but OH NO! HMRC can and do *RETROSPECTIVELY* make a previously approved scheme unacceptable and go after everyone who has used that scheme to limit their liability. As the scheme was previously approved and registered, it is very easy to find out who used the scheme.... THE CODE APPEARS ON THEIR TAX RETURNS!

This is clearly completely f*cked up but HMRC are a bunch of CJTCs and the reversal of decisions is often challenged and over-turned but in the meantime they will issue fines against everyone and aggressively pursue both the fine and the tax even before the legal challenge is heard.

Your options are then...

Pay the fine & back tax *AND* pay for a Solicitor to challenge the reversal... if you win you get the fine and tax back but NOT your legal fees.
Negotiate a deal to pay the tax and a reduced fine but waive your right to challenge the ruling.
or...If you haven't got the cash to actually pay and HMRC refuse to agree a deal, take your chances in court being prosecuted for Tax Evasion. Win and you get to keep your money... but win OR lose, if you are public figure, you will always be branded a Tax Cheat.

 

[BensGrandad]

You just couldn’t help yourself could you...? Why always you? There’s a clear thread sticky at the top and you go and risk getting people in trouble. And don’t give us the whole ‘I wasn’t mentioning a player’ crap because we all knew where this thread would go. Poor. Attention seeking again.

See post no 54 which explains that it was nothing whatsoever to do with any current issues. As posted by another member there has been mention of West Ham and Newcastle and I just asked why this should be so prevalent in football.

 

[Buzzer]

You missed out hair dressers with 2 diaries/books and no card machine, ie everything cash.. you don't see many skint hairdressers..

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I can't comment about all of them obviously but I used to work in practice and had a few hairdressers as clients and I didn't come across many hairdressers who looked like they were on very, very good money. I'd also add that HMRC have favourites that they love to go after: cash businesses where there's usually a sole trader who might not keep the best of books - hairdressers, taxi drivers and the like and I've seen for myself just how hard HMRC come down on these businesses, the penalties and fines imposed and how petty they can get about expenses claimed. This isn't just me speculating, take this quote from one of the UK's top accountancy firms in one of the top tax periodicals:

Roy Maugham, Partner at UHY Hacker Young, commented: "HMRC appears to be aggressively going after small businesses as 'easy pickings' and it's possible they will look to accelerate investigations next year and beyond to further close the gap, rather than going after big enterprise."

https://www.tax-news.com/news/HMRC_Raises_Extra_GBP489m_Through_SME_Crackdown____70931.html

This is why it angers me as a chartered accountant and as a taxpayer when I see HMRC doing deals with Google and Vodafone and Starbucks on how much tax they'd like them to pay, the lack of visibility about fines or interest charged and any warnings about future conduct. It also angers me with super-rich individuals like Gary Lineker who play to the gallery when moaning about NHS funding but then you discover he got involved in a complicated scheme to avoid paying tax on the sale of his Barbados holiday home. It also infuriates me when we look to plug shortfalls by cuts in spending in benefits rather than increasing tax revenues.

I don't agree with pretty much anything Labour spout about tax except for their comment that one of the best ways of proving your patriotism is to pay your bloody taxes.

 

[Springal]

It also angers me with super-rich individuals like Gary Lineker who play to the gallery when moaning about NHS funding but then you discover he got involved in a complicated scheme to avoid paying tax on the sale of his Barbados holiday home.

Was that true? Did not think it was

 

[BensGrandad]

Some years ago a friend of mine had a fish and chip shop in Epsom and fell foul of HMRC as they went into his shop at 2pm on a Friday and demanded that he count the morning takings then based his weekly takings on that. Everybody bar HMRC know that Friday was the busiest days trading but they wouldnt accept that and argued that it was just a typical day.

 

[Buzzer]

Was that true? Did not think it was

Very true, sadly.

https://www.theguardian.com/news/2017/nov/09/revealed-scheme-gary-lineker-tax-barbados-home

 

[Driver 8]

The issue with a number of these "dodges" is that they were legitimate, authorised and registered schemes that have been referred to, reviewed and approved by HMRC. This is nothing to do with "unscrupulous advisers and naive and greedy clients". This is all above board and a way to reduce your tax liability.

The HMRC can then decide that the activity is no longer acceptable.

Any normal person would expect HMRC to announce that said scheme was no longer acceptable, people could react, move their money, etc etc and from the following tax year no-one would be allowed to use that scheme anymore... but OH NO! HMRC can and do *RETROSPECTIVELY* make a previously approved scheme unacceptable and go after everyone who has used that scheme to limit their liability. As the scheme was previously approved and registered, it is very easy to find out who used the scheme.... THE CODE APPEARS ON THEIR TAX RETURNS!

This is clearly completely f*cked up but HMRC are a bunch of CJTCs and the reversal of decisions is often challenged and over-turned but in the meantime they will issue fines against everyone and aggressively pursue both the fine and the tax even before the legal challenge is heard.

Your options are then...

Pay the fine & back tax *AND* pay for a Solicitor to challenge the reversal... if you win you get the fine and tax back but NOT your legal fees.
Negotiate a deal to pay the tax and a reduced fine but waive your right to challenge the ruling.
or...If you haven't got the cash to actually pay and HMRC refuse to agree a deal, take your chances in court being prosecuted for Tax Evasion. Win and you get to keep your money... but win OR lose, if you are public figure, you will always be branded a Tax Cheat.

If you are referring to DOTAS then the acknowledgement that a scheme exists and issuing of a reference number does not signify the HMRC “approve” the scheme, it simply enables them to keep track of who is using it so they know who to go after if they can prove that it is evasion.

 

[Buzzer]

Some years ago a friend of mine had a fish and chip shop in Epsom and fell foul of HMRC as they went into his shop at 2pm on a Friday and demanded that he count the morning takings then based his weekly takings on that. Everybody bar HMRC know that Friday was the busiest days trading but they wouldnt accept that and argued that it was just a typical day.

I think there may have been something lost in translation when relating the story. I have heard of HMRC reviewing takings for specific days for businesses and then making assessments of earnings based on existing stats and records that they have for that business sector. If that is the case then it would make sense to take the details for the busiest day as it is the one day that's least likely to be subject to huge fluctuations because of weather or whatever.

Something along the lines of Fred's chippy took in £XXXX on that Friday. He employs 3 staff, he's open 6 hours and from data from similar sized chippies that represents 45% of an average week's takings. Therefore HMRC calculate his weekly takings based on this.

Even then, every taxpayer has the right to appeal and if what you say is actually true then his accountant should be sacked for incompetence if they didn't challenge HMRC assessing a week's taking on Friday's income x 6 days. Tribunal panels are independent of HMRC so would give any business a fair hearing.

 

[BensGrandad]

I think there may have been something lost in translation when relating the story. I have heard of HMRC reviewing takings for specific days for businesses and then making assessments of earnings based on existing stats and records that they have for that business sector. If that is the case then it would make sense to take the details for the busiest day as it is the one day that's least likely to be subject to huge fluctuations because of weather or whatever.

Something along the lines of Fred's chippy took in £XXXX on that Friday. He employs 3 staff, he's open 6 hours and from data from similar sized chippies that represents 45% of an average week's takings. Therefore HMRC calculate his weekly takings based on existing stats and records that they have for that business sector.
Even then, every taxpayer has the right to appeal and if what you say is actually true then his accountant should be sacked for incompetence if they didn't challenge HMRC assessing a week's taking on Friday's x6. Tribunal panels are independent of HMRC so would give any business a fair hearing.

Possibly, because people dont always tell you the whole story when relaying it and I can only say what I was told by the owner as a warning to me having another cash business ie a pub. Mind you this was 30 years ago so things could have changed.

 

[FatSuperman]

"Call me Dave" Cameron declared that tax avoidance was "immoral" but never did anything to make tax avoidance schemes illegal (as tax evasion is). Again, I wonder why!

Well I assume a lot of his mates, and most other politician's mates use these sorts of loopholes. I did read a while ago that closing the loopholes meant lots of pensions and that sort of thing would have to make changes, as this is what they were originally intended for. Seems to me it can't be that difficult to deal with sensibly.

 

[Stat Brother]

Really? You're really that intrigued? Is it beyond your wit to work out why?

Or is it that on the back of recent events your saw an excuse to stir the pot?

Gotta love not properly accepting any genuine answer that posters have taken their time to give him.

 

[FatSuperman]

I disagree completely. The problem with being prescriptive is that it is still open to debate about definitions of words and also it doesn't future proof against new situations and also requires the declaration of what is and isn't to be absolutely watertight. With the best will in the world, it rarely is ever the case.

The current system works well as long as there is proper HMRC oversight. The onus is on the taxpayer who has a framework and principles to work within. Yea, the current system allows for abuse but if HMRC suspect abuse then they can strip it all away and declare it null and void.
Your comments about their reluctance to go after the biggest companies is a very fair comment though imo. They should definitely do a lot more than they are doing.

All very true I suppose, although I take issue with some of the stuff HMRC are doing, or perhaps trying to do (I'm not sure it's approved yet). I believe that they are changing the legislation, and backdating it a decade (something like that). So something that was previously 'just a loophole', will now be considered unpaid tax. It's absolutely right that they close this and go after all offenders, but surely backdating it is seriously risky.

I worry massively if they do this because I run a Ltd co for my work and whilst I'm currently on the right side of the legislation, I have no idea what they might do down the line.

 

[Hamilton]

Gotta love not properly accepting any genuine answer that posters have taken their time to give him.

Time. That is the issue. He has all the time in the world.

He must be one of the regular Argus letters page writers as well.

 

[Buzzer]

All very true I suppose, although I take issue with some of the stuff HMRC are doing, or perhaps trying to do (I'm not sure it's approved yet). I believe that they are changing the legislation, and backdating it a decade (something like that). So something that was previously 'just a loophole', will now be considered unpaid tax. It's absolutely right that they close this and go after all offenders, but surely backdating it is seriously risky.

I worry massively if they do this because I run a Ltd co for my work and whilst I'm currently on the right side of the legislation, I have no idea what they might do down the line.

Yep and see my later comment and link to the article about HMRC going after soft targets rather than the big boys. I empathise fully with you about worrying about tax compliance. You're expected to be able to run your business, keep all the necessary records and be (effectively) your own tax compliance officer when you've probably not got the time nor the skills in that specific area whereas the very biggest companies have whole departments of people whose sole job is to deal with the tax side.

If you fall foul of the law though, you won't get asked to negotiate how much tax to pay. You'll be told, you'll be fined, you'll be charged interest.

 

[Buzzer]

Possibly, because people dont always tell you the whole story when relaying it and I can only say what I was told by the owner as a warning to me having another cash business ie a pub. Mind you this was 30 years ago so things could have changed.

You know yourself as an ex-publican that stocktakers take a similar approach when they do their job and if a mark-up on a particular beer is below a certain percentage (I seem to recall from my dim and distant past as an accountant in practice that 56% was a popular figure) then alarm bells are raised. There's absolutely nothing wrong in having a cash business, just make sure you get a good accountant and if necessary a book-keeper.

 

[BensGrandad]

If the figure dropped below 56% you needed paper proof of promotions etc to explain the drop. I retired 17 years ago but wouldnt want a pub or any other business now, as you say there is too much red tape as well as trying to make the business profitable.

 

[NooBHA]

I fully accept that but what particular aspect of it makes players/ clubs believe they are not liable to declare it and pay the tax as they do any other income. Is it to do with the fact that most players are now private sole traders for tax purposes? I know that when Gary Stevens left us for Tottenham his company Gary Stevens Enterprises were paid by Spurs and his company then paid him.

That doesn't work and never has done.

A well known former player by the name of David Beckham. His Tax Advisers threatened to do a ''Test Case'' on this. They put it to HMRC that they intended to invoice Manchester United for his Salary via his company on the grounds that his salary former only a minor part of his annual income and as such they were entitled to treat this as fee income as opposed to Schedule E Employment income.

They were told in no uncertain terms That if they even made an attempt to do this then HMRC would fight it to the Highest Laws of the land because it would threaten the whole of the UK Tax Laws in general. Not only did they threaten to fight that through the Courts but they told that particular firm of Advisers that they would also move against them for ''Malpractice'' and seek to have their Licence to Practice revoked.

There is nothing to stop players having fee income from image rights or Sponsorship deals or TV income through their companies but in no way can they have their Club Employer income paid that way.