Am I the only one that has noticed an increasing number of questions seemingly looking for workarounds to dodgy practices on this forum?
"Can we get away with this?", "Is there a way that HMRC will not find out?" etc.
Notwithstanding the continuing lousy backend software, shouldn't sift be more pro-active in removing or disallowing questions that are seeking advice on breaking the law?
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Sift don't care. Not about this issue, not about the site, not about the members ... do you see the theme?
Regarding you post though, you should see the stickied thread in the insolvency forum.
Sift are in this for the clicks.
FFS - hadn't seen that thread before or ever spent much time on that forum.
Its one for all the 'blokes down the pub' giving out free 'advice'.
Had never seen that site before! Frightening levels of ignorance displayed there. Trouble is, probably very often those methods work and HMRC don't have the resources to pursue people who use them.
Don't get me started on that guy, he is a crook. HMRC should track him down via his IP address and administer him a massive kick in the nuts.
Don't get me started on that guy, he is a crook. HMRC should track him down via his IP address and administer him a massive kick in the nuts.
In what way is he a crook? I used the "spongebob" plan before it even existed, following advice on the insolvency website. The plan is perfectly legitimate for those who are genuinely insolvent, and don't have sufficient assets to pay a liquidator.
I wholeheartedly agree that the plan is abused, and is seen as a get out clause by directors who have not set aside enough to pay their taxes, but (as far as I'm aware) spongebob has never suggested that people should abuse it. (I haven't been on the insolvency forum for 2-3 months though)
My rant is that the Govt turns a blind eye, and doesn't do enough to investigate companies that are being struck off where outstanding taxes are concerned, sure they object a few times, but then roll over. If taxes are outstanding, they should investigate to see if DLA is overdrawn, if it is, they should go for the Director personally, and collect all outstanding taxes.
Glennzy wrote:
Don't get me started on that guy, he is a crook. HMRC should track him down via his IP address and administer him a massive kick in the nuts.
In what way is he a crook? I used the "spongebob" plan before it even existed, following advice on the insolvency website. The plan is perfectly legitimate for those who are genuinely insolvent, and don't have sufficient assets to pay a liquidator.
I wholeheartedly agree that the plan is abused, and is seen as a get out clause by directors who have not set aside enough to pay their taxes, but (as far as I'm aware) spongebob has never suggested that people should abuse it. (I haven't been on the insolvency forum for 2-3 months though)
My rant is that the Govt turns a blind eye, and doesn't do enough to investigate companies that are being struck off where outstanding taxes are concerned, sure they object a few times, but then roll over. If taxes are outstanding, they should investigate to see if DLA is overdrawn, if it is, they should go for the Director personally, and collect all outstanding taxes.
He isn’t just a crook, he’s a charlatan too.
In what way is he a crook, you ask? Let’s have a look at some of his quotes from the Spongebob Plan:
‘You should be aware that there is a possibility that should a liquidator ever be appointed that he may seek to claim back from the bank any monies paid into the company account after the date when the company ceased trading. The effect of this would be to return the director to exactly the same position that he was in to start with; there is no penalty for breaching the law in this way so long as no intent to defraud can be proved – which is extremely difficult to do. Consequently, it is almost certainly worth taking the chance. ‘
And this
‘and there is a credit balance in the company bank account (however unlikely that may be!) take out the money and put it somewhere safe. If the company does get struck off the bank will freeze the account. The funds and any other assets then become the property of the Crown.’
So in the plan, despite what you say, he’s encouraging people to break the law and put cash outside the reach of creditors.
Then there’s comments unrelated to the SB Plan, such as:
http://www.ukbusinessforums.co.uk/threads/is-there-a-simple-way-to-pay-s...
http://www.ukbusinessforums.co.uk/threads/vat-reg-for-wedding-photograph...
Oh right, thanks. I obviously haven't read the actual spongebob plan in it's entirety. I do agree with the principle of the plan though, that without sufficient assets to appoint a liquidator, you should apply for voluntary
strike off. Any assets should be monetised imo, and used to pay creditors pro rata, same with cash.
The plan is a genuine way out for some people who get it trouble through no fault of their own.
SpongeBob advocates some very shady practices about what you can get away with and probably not get caught doing, as oppose to good advice.
I remember one post where someone had managed to get enough together to pay off half his creditors.
SB advice was just take the money for yourself as you probably have not taken wages for a while. When the reality is most of these people are contractor style operators who spend all the money paid to them as if its net pay then bump the company when CT is due.
Many are not small earners either judging by CT liability they are avoiding and figures of £20k/£30k indicating earnings of £100k plus and not paying a bean in tax.
Nice work if you can get it.
Thanks Glenn, it could be legitimate to take the cash as wages but would these not have to show as transferred to DLA?
Thanks for pointing out what I wasn't aware of. I occasionally go on and have a gander, but wasn't aware of the advice you and mrme89 have highlighted.
What I find annoying is he comes across as if he is a specialist in his field, which I find disrespectful to the few good IP on the site who put a lot of time in trying to help genuine cases.
He is not a specialist but simply someone who has repeated failed businesses that has worked out that if you dont file anything you can probably get away paying any tax and no one will bother chasing you and encourages others to do the same as if it were a legitimate business tool he uses.
Most of them are contractors who earn £100k spend £100k
so have had more than the salary and dividends they are entitled then just close the company with the CT liability unpaid then do it again with a new company.
I suppose some of these will also now have personal tax liabilities on the dividends drawn if they bother to file and SA return.
Most of them are contractors who earn £100k spend £100k
so have had more than the salary and dividends they are entitled then just close the company with the CT liability unpaid then do it again with a new company.I suppose some of these will also now have personal tax liabilities on the dividends drawn if they bother to file and SA return.
Fair comment, and one that I agree with. However this is where HMRC needs to take a much stronger line and insist on final books submitted before strike off can be given. They must be losing stacks of money by not doing so.
Dodgy practices is loose term , in principle we should not transgress on people 's right to free speech and everybody is entitled to try and arrange their tax affairs in a reasonable matter, if we are helping to do this all well and good - maybe the way to combat evasion questions is to stop anonymous postings
Wasn't it Justice Godard who claimed in 1948 the it is the right of every tax payer to order his affairs to pay the minimum amount of tax.
I may be paraphrasing it a bit
I rather like the Lord Clyde quote:
Ayrshire Pullman Motor Services v Inland Revenue [1929] 14 Tax Case 754, at 763,764:[10]
"No man in the country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or property as to enable the Inland Revenue to put the largest possible shovel in his stores. The Inland Revenue is not slow, and quite rightly, to take every advantage which is open to it under the Taxing Statutes for the purposes of depleting the taxpayer's pocket. And the taxpayer is in like manner entitled to be astute to prevent, so far as he honestly can, the depletion of his means by the Inland Revenue"
Ah, but the Government claim that that won't apply to HMRC. They're a different bunch of people.
The pertinent line in this instance is "so far as he honestly can"
Taking company money for yourself that is legally due to creditors in the hope that nobody can prove you shouldn't have done so is not honest.