BN66 - Time to fight back (Chapter 3)

[HalfMonkey]

keep up the good work

I have posted before. still reading the posts in my lunch hour.

Funnily enough, HMRC sent me a letter querying my 06/07 return again just the other day. Have forwarded to montp.

I'm sure I have already responded to this request so am thinking they are just harassing me at the moment. Hey ho, i'm not that bothered by it.

I think we will win this eventually, hope everyone can keep their chins up until then.

Cheers
Monkey

[poppy01]

does anyone know how the appeals process works?
since appealling my returns I've received nothing but notification that collection the tax is temporarily suspended... I thought I might have been asked questions by now.

since I dont know how MP phrased the appeal I was wondering if it had to wait until the outcome of the JR was known, or could it be rejected prior to that?

[AlbionRovers]

For those who have received CNs, what does the Government Gateway show as owing? Is it the exact figure to a penny?

[DonkeyRhubarb]

does anyone know how the appeals process works?
since appealling my returns I've received nothing but notification that collection the tax is temporarily suspended... I thought I might have been asked questions by now.

since I dont know how MP phrased the appeal I was wondering if it had to wait until the outcome of the JR was known, or could it be rejected prior to that?

As it has been explained to me, the normal appeals process works as follows:

1) HMRC issue a closure notice
2) The taxpayer lodges an appeal, and optionally asks for payment to be suspended
3) The appeal goes forward to a tribunal (Commissioners) for determination
4) The Commissioners rule for/against the taxpayer
5) If it goes against the taxpayer, then they can appeal to a higher court

There is the possibility for the taxpayer to settle between steps (2) and (3), but failing that the process automatically moves on to a tribunal.

In our case, there is nothing stopping HMRC proceeding to step (3) but no-one expects them to with a JR pending.

I suppose HMRC may write to you at some point inviting you to settle but apart from the usual bully boy tactics, I would not expect any other correspondence from them.

PS. if you want to know more, take a look here:

http://www.generalcommissioners.gov....ealProcess.htm

[zippo]

One for all and all for one

I have posted before. still reading the posts in my lunch hour.

Funnily enough, HMRC sent me a letter querying my 06/07 return again just the other day. Have forwarded to montp.

I'm sure I have already responded to this request so am thinking they are just harassing me at the moment. Hey ho, i'm not that bothered by it.

I think we will win this eventually, hope everyone can keep their chins up until then.

Cheers
Monkey

Hey All,

I have been here preety much from the start of this forum but havent realy posted to many times. I also have had a letter from HRMC querying my 06/07 return the other day.

Who knows what HRMC are up to these days but I realy hope we have our day soon

[poppy01]

As it has been explained to me, the normal appeals process works as follows:

1) HMRC issue a closure notice
2) The taxpayer lodges an appeal, and optionally asks for payment to be suspended
3) The appeal goes forward to a tribunal (Commissioners) for determination
4) The Commissioners rule for/against the taxpayer
5) If it goes against the taxpayer, then they can appeal to a higher court

There is the possibility for the taxpayer to settle between steps (2) and (3), but failing that the process automatically moves on to a tribunal.

In our case, there is nothing stopping HMRC proceeding to step (3) but no-one expects them to with a JR pending.

I suppose HMRC may write to you at some point inviting you to settle but apart from the usual bully boy tactics, I would not expect any other correspondence from them.

PS. if you want to know more, take a look here:

http://www.generalcommissioners.gov....ealProcess.htm

Thanks DR, it must really chap their ass to have to follow process like this.

[DonkeyRhubarb]

Padmore legislation

For anyone who is interested, here is a transcript of the debate on the 1987 legislation (Clause 62) introduced as a result of Padmore vs IRC.

http://hansard.millbanksystems.com/c...f-partnerships

[DonkeyRhubarb]

Very interesting

There was an ammendment made to "Section 112 ICTA 1987" in 2005, and the Government made the following very unfortunate statement.

http://www.opsi.gov.uk/acts/acts2005...3/05en05-r.htm

It was intended, in the case of income tax, that the 1987 legislation should do no more than remove the exemption claimed in the Padmore case.

Therefore, it can't apply to us.

============
PS. the above is starkly at odds with HMRC's response to the JR application:

HMRC had made both the general public and professional market well aware of its view in 1987 that “partner” and “member of a firm” included any person entitled to a share of the profits of a partnership. HMRC say that this obviously includes a life tenant of a trust where the trustee is a partner.

PPS. it is also at odds with what Stephen Timms stated in a letter forwarded by my MP:

The Government does not believe that the scheme achieved its purpose since the 1987 legislation clearly applied to it.

[Toocan]

Gold

For anyone who is interested, here is a transcript of the debate on the 1987 legislation (Clause 62) introduced as a result of Padmore vs IRC.

http://hansard.millbanksystems.com/c...f-partnerships

That is a very interesting read. It is clear that the intent of the 1987 retrospective legislation was to stop anyone who had not claimed DTA relief from the claiming it as a result of hearing of the Padmore judgement.

But that does not justify the 2008 retrospection because the Montpelier scheme depended on flaws that still existed in the legislation.

Or to put it another way, the 1987 retrospection was to prevent taxpayers from claiming back tax that they had already paid and believed that had to pay. It was not to force taxpayers who believed that they were not due the tax (and had not paid the tax) to pay the tax.

(Or in another (third!) way, the tax man kept what had been paid, and the taxpayer didn’t have to pay any more.)

The 1987 retrospection does NOT set any “authority” or precedent for the 2008 retrospection in the way that Jane Kennedy suggested to the finance committee when debating Finance Act 2008.

The transcript is actually a goldmine of information, especially with respect to retrospection and why it was used in the 1987 case.

I have to say, with regret, that the debate was far more honest back in 1987 too – even Tony Blair (one day to be Prime Minister) – compared to what happened last year. New Labour have really damaged our country. It’s sad. So very sad.

[Toocan]

There was an ammendment made to "Section 112 ICTA 1987" in 2005, and the Government made the following very unfortunate statement.

http://www.opsi.gov.uk/acts/acts2005...3/05en05-r.htm

It was intended, in the case of income tax, that the 1987 legislation should do no more than remove the exemption claimed in the Padmore case.

Therefore, it can't apply to us.

============
PS. the above is starkly at odds with HMRC's response to the JR application:

HMRC had made both the general public and professional market well aware of its view in 1987 that “partner” and “member of a firm” included any person entitled to a share of the profits of a partnership. HMRC say that this obviously includes a life tenant of a trust where the trustee is a partner.

PPS. it is also at odds with what Stephen Timms stated in a letter forwarded by my MP:

The Government does not believe that the scheme achieved its purpose since the 1987 legislation clearly applied to it.

There is another subtlety there that I had not comprehended:

Pre-Padmore:
A UK resident partner of a Jersey resident partnership was exempt from tax.

Post-Padmore:
United Kingdom resident partner of a Jersey resident partnership is no longer exempt.

Montpelier setup:
The IoM resident partner of an IoM resident partnership is a IoM resident trust and therefore not affected by the Padmore change and is exempted from UK tax.

The Montpelier setup would have worked both before Padmore and after. And the debate on the 1987 change did not cover trusts at all. Which means there is no “intent of Parliament” on this point – it was not raised.

When the faceless voice of HMRC says that “in its view in 1987 that “partner” and “member of a firm” included any person entitled to a share of the profits of a partnership.”, I refer them to the words of Norman Lamont who said “One crucial point, which the hon. Member for Sedgefield made fairly and rightly, is that what the Inland Revenue understands to be the law is not necessarily what is widely accepted to be the law.”

I think it is quite clear that HMRC’s basis for using retrospective legislation is completely without merit. Their justifications are completely without merit. Their claim that the Montpelier scheme didn’t work is completely without merit.

That is not to say that Parliament may not have wanted the law to be what it now is back in 1987 – but that was not put to them 1987. Parliament were not asked to make that choice.

Perhaps the JR is taking a while to come through because HMRC cannot find a barrister willing to tar their reputation by taking on such a ridiculous case.

I wonder if HMRC knows who John Galt is?