The contracting world is based on successful relationships. Parties enter into contractual relationships for mutual benefit. Successful relationships contain agreement, consideration and good faith. Parties willingly work together on agreed terms. It is therefore alarming of the acceptance by some to be led into abusive relationships. Without over stating the fact it shakes at the core foundation of contracting. It undermines the legitimacy of working relationships on a contract basis.
We are all aware “that if something is too good to be true, it usually is”, when discussing taxation this is not true. When discussing taxation “if something is too good to be true IT IS”. This review is not to act scare monger it is to give a sense of reality. It is not acceptable to walk into the local supermarket and walk out without paying for it. “Taxation is not to be treated as a game where taxpayers can indulge in inventive schemes in order to eliminate or reduce their tax liability.” Much in the same way putting a rotisserie chicken under your jumper is not an inventive way to reduce the cost of the weekly shop. The GAAR attempts to establish the principle that tax payers should “pay their fair share” and Bright Sky Contracting fully support this.
Like a fad diet, with long lasting health repercussions, there are contracting and payroll providers claiming to have solutions that are counter intuitive in every way. What is sold as ingenuity and creativity is actually a ticking time bomb. The GAAR gives HMRC the power to counteract any tax advantages that people try to gain by using abusive tax arrangements, even where those arrangements are not specifically prohibited by other existing tax laws. Individuals who entered into abusive tax arrangements on or after 15 September 2015 are captured by this wide scope.