BN66 - Time to fight back (Chapter 3)

[DonkeyRhubarb]

There has been much discussion about the way in which we all, as MontP clients and victims of HMRC retrospective "clarification", might help our case by writing to our MP or mounting a PR campaign.

As HMRC have said in their newsletter even if we win the JR they are under no legal obligation to change the law which has already been passsed.

Assuming we win should we now be thinking about how to get HMRC to abandon any claims prior to April 08? We need to strike while the result of the JR is hot so that we are up and running when the result of the JR is announced.

Conversely, if heaven forbid we loose do, we need the PR company to advise on a co-ordianted pressure group to lobby for relief rather than let HMRC pick us off one at a time. United we stand, divided we fall.

A PR campaign can take many forms not just getting red top newspaper headlines. A co-ordinated campaign would be more effective than sporadic letters etc and bearing in mind the vast sums involved should we think about asking Mont P to appoint a PR company who could advise on the best form of action even if we all contributed say £50 to get the campaign off on a professional basis.

Any comments guys.

Writing to MPs was only ever a background activity. We knew it probably wouldn't make much difference but it couldn't do any harm. And at least it felt like we were doing something.

It is not easy to just put (blind) faith in someone (MontP) but sometimes that is all you can do.

In my last assignment I got very frustrated because the guy who hired me brought me in as an expert but couldn't bring himself to just let me get on with the job. He wanted to know all the minutiae even though it was of no help to him whatsoever.

Ironically, I found myself doing exactly the same thing recently when we had an extension built on our house, and I annoyed the hell out of the builders.

Hopefully, you get the point I'm making. Sometimes you just have to let the experts get on with their job.

[DonkeyRhubarb]

Reading between the lines, Mr. PCG says here http://www.shout99.com/contractors/s...id=52716;n=250 that it's our own fault as we were blatantly flouting the spirit of the law. Cheers and thanks for your support!

He agrees with the Government taking action but not retrospectively.

"We do not like the retrospection of this measure, however: the Government claims to be "clarifying" legislation passed in 1987 so that it works as intended. But if this is necessary, it cannot have worked like that up to now: so in reality they are introducing a new item of law with retrospective effect.

"This is a dangerous principle and the Government ought not to be setting such a reckless precedent. We want to see a fair treatment from the Government for freelancers who are in business on their own account and seek to meet their lawful tax obligations accordingly - retrospection has no place in such an arrangement."

[TheBarCapBoyz]

He agrees with the Government taking action but not retrospectively.

I think thats everyone's view more or less, which is why the PCG, if they genuinely object to the retrospective aspect of this legislation, should be getting involved in this fight.

[smalldog]

He agrees with the Government taking action but not retrospectively.

I think thats everyone's view more or less, which is why the PCG, if they genuinely object to the retrospective aspect of this legislation, should be getting involved in this fight.

after all, they need to protect their interest, us today but could be them tomorrow with a new piece of retrospecitve legislation...has anyone tried rallying the PCG?

[SantaClaus]

This is not an overseas case.

It's UK tax payers being victimised by HMRC with the help of the UK Govt.


Surely you're not implying the PCG is useless, are you?

Heretic.

Well I found them pretty useless when I was a member years ago. They started as an organisation speaking out for contractors but soon became an unwieldy beaurocracy. The members who ran it were more interested in self advancement than fighting the government. A bit like our current members of parliament.

Also, the PCG were more interested in hobnobbing with MPs and tiptoeing around the govt. asking how they can help them clarify the IR35 rules. When in fact the govt. were laughing their heads off at this toothless organisation who were under dillusions that they were being "consulted".

They PCG would love Montpelier to fail so they can say "we told you so, you should have used a Ltd company and bought IR35 insurance from us".

Sorry, but the PCG are a spineless bunch of twats.

[MuddyFunster]

They PCG would love Montpelier to fail so they can say "we told you so, you should have used a Ltd company and bought IR35 insurance from us".

Exactly. You can see that from his quote about it blatantly flouting the law. WTF!? It used a law that was ambiguous and took advantage of it. I wouldn't waste any time with those muppets.

[DonkeyRhubarb]

Response from Stephen Timms

A fellow poster received the following response, via their MP, from the new Financial Secretary to the Treasury.

Thank you for your letter of 7 September, which we received on 10 October, to Alistair
Darling enclosing correspondence from your constituent, Mr. xxxx about Clause 55 of the 2008 Finance Bill (now
section 58 of the 2008 Finance Act). I have been asked to reply.

Mr.xxxx is concerned about the retrospective nature of section 58 and his liability for tax
in respect of this scheme. He also believes that the legislation breaches his human rights
and in that context he draws attention to a judicial review being undertaken on behalf of
some of the scheme participants.

As Jane Kennedy indicated during the Parliamentary debate on the Finance Bill, section 58
prevents a tax avoidance scheme, one of the purposes of which was to abuse the UK's
Doubk Taxation Treaties. The scheme also set out to circumvent legislation introduced in
1987 for the same purpose and which itselfyvas retrospective in nature. By retrospectively
clarifying the 1987 legislation, section 58 makes it clear that this type of avoidance does not
work and never has done.

The Government does not believe that the scheme achieved its purpose since the 1987
legislation clearly applied to it. However, during 2007 both the number of scheme users
and the amounts of tax involved reached such a high level that the Government decided that
a legislative response was appropriate.

The Government has always limited the use of retrospection as far as possible, using it for
the worst cases of avoidance to ensure fairness and certainty for all taxpayers. That
continues to be Government policy. In exceptional circumstances, the Government
reserves the right to use retrospection, as in this instance, where it is fair, ptoportionate and
in the public interest to do so. Retrospective legislation does not in itself contravene the
European Convention on Human Rights.

The Government is aware of the Judicial Review proceedings that have been instigated. As
you will understand, I can make no further comment on this matter.

Where taxpayers have difficulty meeting their obligations, HMRC has established procedures
and guidelines which can be found at:

www.hmrc.gov.uk/howtopay/prob-indiv-comp.htm

Please pass on my thanks to Mr xxxx for taking the trouble to raise his concerns about
this with us.

[SantaClaus]

Exactly. You can see that from his quote about it blatantly flouting the law. WTF!? It used a law that was ambiguous and took advantage of it. I wouldn't waste any time with those muppets.

I agree Muddy.

We were just arranging our tax affairs in the most efficient manner. Nothing illegal at all about that.

[SantaClaus]

A fellow poster received the following response, via their MP, from the new Financial Secretary to the Treasury......

Wow, there's so much ambiguity in that letter, my head is spinning!

"The Government does not believe that the scheme achieved its purpose since the 1987 legislation clearly applied to it. However, during 2007 both the number of scheme users and the amounts of tax involved reached such a high level that the Government decided that a legislative response was appropriate."

So if the 1987 legislation clearly applied, why legislate?

"The Government has always limited the use of retrospection as far as possible, using it for the worst cases of avoidance to ensure fairness and certainty for all taxpayers."

Erm, when has the use of retrospection lead to certainty? Wouldn't that lead to uncertainty?

"Retrospective legislation does not in itself contravene the European Convention on Human Rights."

Since when? You mean we've been fooled by Montpelier all this time!

Someone please remove the word "fairness" from the Oxford English Dictionary. It no longer means what I thought it did since the government got hold of it.

May be worth writing back to Steven Timms with these points and telling him, based on the above, his tax collecting chums are going to lose the case.

[seadog]

[QUOTE=DonkeyRhubarb;701015]A fellow poster received the following response, via their MP, from the new Financial Secretary to the Treasury.

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


If the legislation was clear, how come two of the biggest accountancy practices (KPMG & PCW) plus Mont P and a host of clever barrristers thought it did not apply.

If that array of experts thought it did not apply the usual way to resolve the matter is to go to the special commisioner and then to the high court etc for "clarification".

From HMRC's reponse it seems to me a clear case of "if we think we are going to lose the argument we will change the rules."