The founders realised that HMRC's indiscriminate campaign against tax anti-avoidance was reaching people who often had no conception that their planning was considered to be aggressive, or in some cases no realisation that their arrangements even constituted tax planning.
Additionally some of the tax planning structures from the era when tax breaks were enshrined in statute are very complex. Solving the tax issues without thought to all aspects to the arrangement is not sensible.
Consequently WTT looks to support those with limited knowledge of their alleged offence and also those with more to lose than just a tax relief promoted by Parliament.
Does WTT consult on general tax matters or specific areas of tax?
WTT's focus is on tax avoidance enquiries. This sees us acting on a vast spectrum of disciplines, including film and property investment, contractor and freelancer arrangements and corporate tax planning structures.
Increasingly however WTT is called upon for a view or comment upon prospective changes of law and whether arrangements can be legally used in a low risk manner.
How would you describe the current HMRC strategy towards the smaller business and contractor?
Unrelentingly aggressive.
The basic disconnect between a government making statements that small business is the lifeblood of the recovery and then HMRC using tricks that go to the limit of their own interpretation of their powers is difficult even for professionals to comprehend. How budding new enterprises cope is a tribute to their sticking power.
The most recent budget as an example has brought further uncertainty for the estimated 1.88m people working in the UK's contractor, freelance and PSC sector.
Often quoted as trying to reduce red tape and free business of the shackles of administration, the government now expects contractors to not only understand and apply 15 years of legislative changes to their own circumstances but also to make their end client aware of the implications for them. We are used to employers being asked to be unpaid tax collectors but now we're seeing contractors being asked to be unpaid tax advisers, often at the cost of not getting the engagement.
Do you advocate a change of thinking or planning for your current or potential clients?
Our clients in the contractor sector are initially often vaguely aware that they have, through no fault of their own, become a target for HMRC but have little conception of how a tax enquiry is operated. Once the sense of outrage has subsided, there remains a Hobson's choice.
Either accept what a largely uninformed and biased HMRC calculates is "fair" or seek the help of advisers who will charge a fee. Having paid fees already to use a "compliant" scheme, paying again to reduce what is seen as a retrospective tax imposition is anathema to most. Not surprising then that many choose the "do nothing and it'll all go away" route.
Our change in thinking is perhaps that it won't go away by itself. HMRC has already told government that there is money to be collected now and a reduction of future costs if more contractors are forced to be employees and they will not be permitted to ease off. Despite there being a backlog of tax enquiries (estimated at around 100 years of court time to resolve) common sense has yet to break out and contractors and others should realise that proactive engagement is the most likely route to resolution. WTT is based on creating that engagement and finding a fair resolution. Ignoring the situation is not an answer. Trying to argue complicated matters of law with an HMRC who have an inbuilt bias is not an answer. Get smart, get advised and take control.
Can HMRC decisions be influenced in any way and what would you hope to achieve if you could alter their thinking?
HMRC can be influenced but not quickly or easily. The agency collects information over a long period and creates an interpretation that is arguably based on maximum revenue generation.
Patient and careful analysis of facts and application of statute to those facts is the route to influence. Opposing HMRC's view of a situation based on little more than sticking to an opinion on a scheme that was arguably never valid and, ignoring all decisions in court and announced policy changes since inception, is not going to work.
If we had one wish it would be for HMRC to make decisions that are in part based upon the impact their "one size fits all" policy has on people who had no idea they were indulging in tax avoidance and did not have the resources to seek independent specialist advice. A bit of common sense and humanity would go a long way to resolving 65,000 and counting tax disputes.
WTT's
Big Group, is established specifically for
contractors and freelancers seeking tax advice from historic planning.
We have a private forum where members can interact and assist each other with
immediate concerns while the group also receives the benefit of expert tax
advice.
This action group and others operated by WTT for enterprise zone and business property investments carries the ability to resolve matters en bloc and continue to offer HMRC an opportunity to settle with large groups of taxpayers in a sensible and fair way.
What advice would you give to small business taxpayers to ensure they operate within the tax laws of the land in the next few years?
Each Finance Act introduces often significant changes to legislation for small businesses and contractors. It is sometimes many years before the full extent of the rules are known, not helped by revisionist analysis from HMRC. It is important that the anticipated effects are understood as far as possible.
In the absence of any HMRC clearance procedure, the best way to achieve this is to speak with an adviser who will take the time to explain the effects. No longer can taxpayers blindly entrust their advisers to manage their tax affairs, it must now become a joint effort allowing both parties to remain informed.
Don't be taken in by "too good to be true" schemes. The basic UK tax rate is 20%. If you earn more than £45,000, then it rises to 40%. Do a simple calculation. Multiply your income by these rates, find the effective tax rate and compare it to what is offered by a provider. If the scheme is significantly better, post fees, then the difference can ONLY come from tax savings. These WILL BE challenged.
And the future for WTT Consulting is?
Bigger groups of taxpayers coming together to solve common problems and educating them and HMRC as to the real effects of their actions and policies.
We find ourselves being sought after by those in more obvious tax planning arrangements who have seen the future and wish to remove themselves from HMRC's microscope. Either as individuals or groups, we can help them.
We have also been approached by individuals and professional firms seeking expert opinion not just in the tax position but also the commercial arrangements and importantly how to arrive at a holistic solution, preferably removing those parties who are sometimes seen as responsible for the situation.
As a small business ourselves, we are flexible in approach but with a keen focus on what we're best at.
For more information and to join the Big Group visit www.wttconsulting.co.uk
