BN66 - Time to fight back (Chapter 3)

[TheBarCapBoyz]

It is interesting that no mention has been made regarding the fact that Labour announced in 2005 budget that tax avoidance schemes would be closed down in future and back dated to DEC 2004.

Maybe they intend to use this as a contingency.

Does anybody know what is going on with the various 'loan' based scheme's that have been operating for many years? It seems unjust that none of these blatent artificial schemes have been treated in the same way.

Why is one tax avoidance scheme using loans more "blatant" than one using family trusts? All tax avoidance schemes are essentially artificial in nature.

What a bizarre thing to say.

[BlasterBates]

It is interesting that no mention has been made regarding the fact that Labour announced in 2005 budget that tax avoidance schemes would be closed down in future and back dated to DEC 2004.

Maybe they intend to use this as a contingency.

Does anybody know what is going on with the various 'loan' based scheme's that have been operating for many years? It seems unjust that none of these blatent artificial schemes have been treated in the same way.

some loans schemes have been closed down, and contractors have had their fingers burnt. I think you will find the ones that are still doing so are fairly recent, and contractors who haven't yet been f**ed by the scheme run a high risk of doing so in the future.

[DonkeyRhubarb]

Head of PCG

John Brazier has signed the petition.

I believe we have Brillo to thank for this.

[DonkeyRhubarb]

Retrospection, certainty and legitimate expectation

Taxpayers (even tax avoiders) have a right to certainty in the tax system.

If retrospection is the new paradigm, then it needs to be absolutely clear under what circumstances this is to be applied. It is not acceptable for this to be arbitrary, where some arrangements are closed retrospectively and others are not, simply at the whim of Government or HMRC.

Furthermore, it should not be used as a cover for bureaucratic incompetence. If HMRC screw up then they should face the consequences for this, not be let off the hook by using time travel to clean up their mess.

It also needs to be signalled well in advance so that people know what to expect. People who joined the MTM scheme in 2001 were given no warning that retrospective legislation might be used 7 years down the line.

[ASB]

People who joined the MTM scheme in 2001 were given no warning that retrospective legislation might be used 7 years down the line.

Actually I think they were given that warning with the disclosure regime. The PMG provided the statement on 2nd December 2004.

You can find the text in appendix to this document:-

http://www.icaew.co.uk/index.cfm/route/116406

The budget notes also specifically referred to DTA treaty abuse:-

http://www.hm-treasury.gov.uk/d/bud0...utions_115.pdf

27. Double taxation relief
Authorises the Finance Bill to amend the double taxation relief legislation
(including provision for retrospective effect) in order to close down known
avoidance schemes including ones that were notified under the avoidance
disclosure rules. Some of the proposals were announced at PBR and apply
from 2 December 2004.

I'm not saying it is right, simply that to say no warning isn't entirely true.

[BrilloPad]

John Brazier has signed the petition.

I believe we have Brillo to thank for this.

I will go and put something on the PCG forum now!

I would like to propose a vote of thanks for the PCG for supporting us. After all, they do not have many members affected.

[PlaneSailing]

Actually I think they were given that warning with the disclosure regime. The PMG provided the statement on 2nd December 2004.

You can find the text in appendix to this document:-

http://www.icaew.co.uk/index.cfm/route/116406

The budget notes also specifically referred to DTA treaty abuse:-

http://www.hm-treasury.gov.uk/d/bud0...utions_115.pdf



I'm not saying it is right, simply that to say no warning isn't entirely true.

The PMG's statement is very controversial. It says, somewhat
bizarrely, we can't be bothered chasing schemes or writing laws,
we'll just do whatever we fancy. Vince Cable did have a go at
her about it when he had more strident views on retrospection.

http://www.publications.parliament.u...t/51215-23.htm

As for the double taxation mention in the Budget Note, does this
refer to a change made in the 2005 budget and not really anything
to do with us at all? I'm sure we'd have heard a lot sooner if it did.
It's not like they didn't have EVERYTHING disclosed to them.

[ASB]

The PMG's statement is very controversial. It says, somewhat
bizarrely, we can't be bothered chasing schemes or writing laws,
we'll just do whatever we fancy. Vince Cable did have a go at
her about it when he had more strident views on retrospection.

http://www.publications.parliament.u...t/51215-23.htm

As for the double taxation mention in the Budget Note, does this
refer to a change made in the 2005 budget and not really anything
to do with us at all? I'm sure we'd have heard a lot sooner if it did.
It's not like they didn't have EVERYTHING disclosed to them.

I'm not saying I agree with them. However, if I were a user of any avoidance scheme (which I'm not) I would be expecting HMRC to attempt to apply it back to 2004 - assuming they actually won of course. The only point I was making is that "no warning" isn't really true, there was prior warning.

What I do find particularly odd is this was done in the 2005 budget. However this is not related to the more specific measures targetting DTA abuse and backdating to '87.

Personally I feel that the statements made about backdating to 2004 were desgined so that they would frighten individual users of various schemes over a period of a few years to stop using them and for promoters to find them much more difficult to market. They were effectively saying "we can't keep tabs on everything, so well try and frighten them into a natural death".

[DonkeyRhubarb]

Actually I think they were given that warning with the disclosure regime. The PMG provided the statement on 2nd December 2004.

Even if that were the case, which others will no doubt disagree, then the retrospection should only go back as far as 2004.

No warning was given in 2001/2/3 when I was using the scheme but I've still been slapped with a bunch of closure notices including 40% interest.

[Emigre]

I don't think that PMG was referring to our arrangements at all. Reading her comments they are clearly targeted at employers and employees. We are in business on a self-employed basis and as such do not fall into either category.

Her constant reference to Finance Bill 2005 would suggest that er hum "clarification" (God I hate that word) of her comments would be made there. As such there is no reference whatever to anything that we have been doing. Therefore I don't think we could have been on notice since then.

With respect to the comments made by Vince Cable in debate it is absolutely clear that he believes that retrospective taxation fails the HRA test.