MOO - A Question of Interpretation

HMRC has been accused by Dave Chaplin, CEO and founder of ContractCalculator, of misleading the chancellor of the exchequer and the Treasury over the off-payroll IR35 rules, in particular with regards to the mutuality of obligation (MOO) aspect which is necessary to assess employment status.

Mr Chaplin claims that the HMRC has supposed that MOO is present for all contractors, and this assumption was built into the HMRC’s Check Employment Status for Tax (CEST) tool. As a result, he believes around 750,000 CEST results will need to be re-examined, alongside thousands of blanket decisions made by organisations like the NHS.

This interpretation of MOO was repeated by chancellor Philip Hammond in a letter to the environment secretary, Michael Gove:

“Mutuality of obligation refers to any existing agreement where an individual provides services and receives payment for doing so – better understood as a contract existing between the two parties. CEST assumes as its starting point that a contract either exists or is being discussed.”

Financial secretary to the Treasury, Mel Stride, also repeated this interpretation in a letter to many constituents.

Dave Chaplin said:

“We doubt the Chancellor or the Financial Secretary to the Treasury have any idea about what MOO is which is why they appear happy to trot out – albeit unwittingly – HMRC’s falsehoods regarding MOO and CEST.

HMRC has been propagating its erroneous claims to public authorities and IR35 Forum members of late, but it’s a grave concern when these false claims are coming from the country’s key economic and fiscal decision makers. Questions must be asked.”

Mr Chaplin has called for a full inquiry before any further changes to IR35 are considered.

IR35 seeks to prove that workers are employees, and should be taxed as such. HMRC inspectors can disregard written contracts through intermediaries and consider the actual working practises to decipher whether a person should be classed as an employee.

However, according to ContractCalculator, MOO means that the employer would be obliged to offer work, and the worker would be obliged to accept.

As per ContractCalculator judgement day is coming:

"It’s been nine months, multiple delays and many excuses in the making, but HMRC has finally confirmed in a Freedom of Information (FOI) response to ContractorCalculator that it will confirm its stance by the end of July 2018."

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



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HMRC Use "Nudge" Techniques To Persuade People To Give Up Their Legal Rights - Thread

HMRC presented evidence to the Public Accounts Committee in Dec 2012 that they were going to conduct an experiment to see if they could manipulate people to give up their legal rights in a legitimate dispute with HMRC which HMRC had historically been unable to win in the Courts pic.twitter.com/ZlWAyqwUDG

— Gordon Berry (@wealthagent) June 20, 2018

The thread is live, and worth reading.


Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

David Bunting To Become Interim HMRC General Counsel

Last week I noted that Gill Aitken, HMRC’s General Counsel and Solicitor, is to leave HMRC on 30 June, to take up a new role as Registrar at the University of Oxford.

Whilst HMRC start the "open" recruitment process an interim appointment will be made.

Step forward David Bunting, who currently works in the cross-government Border Delivery Group, as its interim general counsel and solicitor.

Civil Service World reports that Bunting trained in the Inland Revenue and has more than 20 years’ legal experience. He has led HMRC legal teams dealing with tax policy and legislation in relation to UK business and environmental taxes including Corporation Tax, VAT, Customs and Excise duties, oil and gas taxation, Landfill Tax, Climate Change Levy and betting and gaming duties. He has also led HMRC’s litigation activity.

In 2008 he became a senior civil servant, and in 2012 was appointed legal director at HMRC. In 2017 he moved to the Border Delivery Group – a cross-government team led by HMRC’s director general for border coordination Karen Wheeler, which focuses on the operational and practical impacts of Brexit on UK borders.

On 1 July, Bunting will become director general of the Solicitor’s Office and Legal Services Group and will join the department’s executive committee, reporting to chief executive Jon Thompson.

There will be an open recruitment process in the coming months to fill the role permanently, and HMRC said it would confirm any new arrangements in the Border Delivery Group in due course.
Aitken has been at the tax agency since 2014. Commenting on her departure, Thompson said: “She has helped to shape our departmental strategy and I’ll really miss her wise counsel.”

What's the betting that Bunting becomes permanent?

New arrangements in the Border Delivery Group will be announced (decided) in due course.


Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Beware HMRC's Enablers - Crassly Ignorant Reporters Looking For a Cheap Headline

Bruce Forsyth 'dodged inheritance tax' by leaving £11.7m to wife over kids

Is this was what HMRC campaigns and media hysteria about tax planning has really come to? Criticising use of the IHT spouse exemption? Quite frightening. https://t.co/mk2i6UXbdw

— Mark McLaughlin (@charteredtax) June 19, 2018

IHT spousal exemption is not "tax dodging"!

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

HMRC Harasses Those With Mental Health Problems

HMRC has been criticised for failing to recognise mental health issues after it continued to target vulnerable taxpayers despite being issued with warnings from medical professionals.

The Telegraph states that is has been contacted by some of its readers who said their mental health had deteriorated because of the way they had been hounded for cash by HMRC.

In some cases this pursuit continued even after HMRC acknowledged that they were vulnerable. In one instance a high-profile figure attempted suicide after HMRC failed to correctly note his vulnerable person status and continued to contact him.

Others have been left unable to work after suffering anxiety and depression as a result of HMRC inquiries, while one reader asked solicitors to intervene on his behalf.  These cases highlight the lack of recognition and protection for those with mental health difficulties.

HMRC apologised for not meeting its own guidelines, losing letters and failing to return calls.

Andrew Neil, an IT contractor from Llandudno, sent multiple letters from doctors to HMRC, which ignored them.

HMRC acknowledged that Mr Neil was a vulnerable person in November 2016, but continued to send letters and contact him by telephone. The taxman also lost a letter sent by Mr Neil for almost four months and failed to call his wife back after she tried to intervene.

It has apologised for each of these oversights.

Mr Neil and others are among the thousands of people targeted by the taxman because of the way they structured their finances in the past, using loans instead of payments for their income.

These tax arrangements, which were generally considered legal at the time, have since been challenged by HMRC.

Those who have fallen foul now face large tax bills and penalties, sometimes in the hundreds of thousands of pounds. Because of the way HMRC is seeking to collect the tax, the “loan charge” payments due could be much higher than the amount originally owed.

HMRC told Telegraph Money it had safeguards in place to support those with mental health problems.That's all very well, but from the above it seems that HMRC does not follow its own rulebook on the subject of mental health!

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance




HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"

Tax Gap £33BN

The tax gap slightly increased to £33bn (5.7%) in 2016/17, up from the previous year's revised figure of 5.7% (£32bn). This year, despite the gap increase, the percentage remained at 5.7%.

The tax gap is the difference between the amount of tax that should be paid to HMRC and what is actually paid.

HMRC note that 41% of the tax gap came from small businesses. The group is responsible for an overall gap of £13.7bn. Large businesses accounted for a further £7bn.

The majority of the tax gap came from failing to pay income tax (IT), national insurance contributions (NICs) and capital gains tax (CGT), amounting to a total of £13.5bn. Unpaid value added tax also contributed £11.7bn to the tax gap and corporate tax added £3.5bn.

The tax gap was driven by failure to take reasonable care (£5.9bn), by criminal acts (£5.4bn), tax evasion (£5.3bn), legal interpretation (£5.3bn), non-payment (£3.5bn), error (£3.2bn), hidden economy (£3.2bn) and finally tax avoidance (£1.7bn).

In other words, despite government and HMRC BS, avoidance is not the key issue!

Catherine Robbins, partner at Pinsent Masons, is quoted in economia:

“Very few businesses are engaged in tax avoidance schemes now and as HMRC hunts for new sources of revenue, it is increasingly coming down hard on basic, almost routine errors.”

Basically HMRC will go after low hanging fruit, ie:

- SME's
- Individual taxpayers

Tax does have to be taxing.

Professional Cover Against the Threat of Costly TAX and VAT Investigations

Insurance to protect you against the cost of enquiry or dispute with HMRC is available from several sources including Solar Tax Investigation Insurance.

Ken Frost has negotiated a 10% discount on any polices that may suit your needs.

However, neither Ken Frost nor HMRCISSHITE either endorses or recommends their services.

What is Solar Tax Investigation Insurance?

Solar Tax Investigation Insurance is a tax-fee protection service that will pay up to £75,000 towards your accountant's fees in the event of an HM Revenue & Customs full enquiry or dispute.

To find out more, please use this link Solar Tax Investigation Insurance



HMRC Is Shite (www.hmrcisshite.com), also available via the domain www.hmrconline.com, is brought to you by www.kenfrost.com "The Living Brand"