BN66 - Time to fight back (Chapter 3)

[SLB]

Here's something else I would like to suggest to everyone.

For those with closure notices who think they should'nt have received one because you and Montpelier didnt receive an enquiry letter within the time limit, can I suggest the following (which I have already done):

Hi - what is the time limit for receiving an enquiry letter? Also, is there a time limit from receiving the enquiry letter to receiving a closure notice? Thanks.

[SantaClaus]

Hi - what is the time limit for receiving an enquiry letter? Also, is there a time limit from receiving the enquiry letter to receiving a closure notice? Thanks.

hi SLB

The time limit for an enquiry letter is 1 year after your self assesment return is filed. Although HMRC do not seem to be adhering to that rule. It has been alledged that they may be backdating enquiry letters when this issue is brought up with them.

I dont think there is a time limit to receive the closure notice. But I think you only have 30 days to appeal against a closure notice, someone correct me if i'm wrong.

[SLB]

hi SLB

The time limit for an enquiry letter is 1 year after your self assesment return is filed. Although HMRC do not seem to be adhering to that rule. It has been alledged that they may be backdating enquiry letters when this issue is brought up with them.

I dont think there is a time limit to receive the closure notice. But I think you only have 30 days to appeal against a closure notice, someone correct me if i'm wrong.

Thanks Santa, I'm off to check the dates on my enquiry letters!

[Toocan]

Why the answer is wrong

I sent a letter to Vince Cable back in February and I got a reply today:

"... we have debated the issue you raise extensively in Parliament and the problem is that there are a lot of very clever lawyers and accountants who are finding forms of tax avoidance which are highly sophisticated. In response, it has now been concluded that the only way of dealing with a lot of these schemes is for tax to be paid retrospectively.

I am not a lawyer but since you say that you are being financially ruined as a result, then what is happening may well be disproportianate, in which case I can take this up for you with HMRC. On the general issue, it is however clear that Parliament has now accepted that in many cases, if people are involved in tax avoidance schemes, they will be pursued retrospectively.

The argument that the scheme closed down by s.58 could only be dealt with by retrospective legislation is unfounded because HMRC was told in 1987 that the change they made to the rules in 1987 did not prevent schemes such as this operating. They [HMRC] even published this advisory on their website.

In 2001 HMRC knew the scheme was in use because at that time the Suo Motu scheme closed down due to the people who ran it being in breach of their obligations to Montpelier.

HMRC did not tell scheme users that they considered the scheme to fall under these rules until 2008. But given that HMRC knew the scheme was possible in 1987, and knew it was in active use in 2001, this is clear evidence that HMRC tolerated the scheme in much the same way as they tolerate so many other schemes.

It is not that the scheme was created by clever accountants, but that HMRC published the scheme on their website (in 1987) which accountants started to actively use in the early 2000’s.

In these circumstances it is clearly wrong to use retrospective legislation.

[BrilloPad]

In these circumstances it is clearly wrong to use retrospective legislation.

Is there in fact a good time to use retrospective legislation?

Apart maybe from banning trolls from cuk back to 2005........

[Toocan]

Is there in fact a good time to use retrospective legislation?

Apart maybe from banning trolls from cuk back to 2005........

There is a place for retrospective legislation - and that is where an unfair law is repealed.

[BrilloPad]

There is a place for retrospective legislation - and that is where an unfair law is repealed.

Personally I disagree. I dont believe in changing past laws retrospectively. Change them going forward by all means. But this is possibly a discussion for a seperate thread?

[bananarepublic]

As I understand it the limit for opening an enquiry is not 12 months after the return has gone in but 1 year after the 31 January deadline for submitting the return. A pedantic but important difference if you submitted your return on 15 January one year and got an inquiry 16 January the next year.

The reason the government have made a retrospective change with BN66 is because the original change in 1987 was retrospective. The big difference with 1987 is that at that time virtually no body was using the dual tax agreement to avoid tax - only 3 people had claimed the exemption I think - the retrospection was to stop people who had paid the tax reclaiming it. The government made it very clear at the time that the retrospection was for this reason - very limited in scope.

[SantaClaus]

As I understand it the limit for opening an enquiry is not 12 months after the return has gone in but 1 year after the 31 January deadline for submitting the return. A pedantic but important difference if you submitted your return on 15 January one year and got an inquiry 16 January the next year.

Yes, that is right. Thanks for correcting.

[DonkeyRhubarb]

More Freedom of Information requests

There are 6 concerning Section 58:

http://www.whatdotheyknow.com/reques...a_facie_case_o
http://www.whatdotheyknow.com/reques..._act_2008_fair
http://www.whatdotheyknow.com/reques...trospective_ta
http://www.whatdotheyknow.com/reques...e_act_2008_and
http://www.whatdotheyknow.com/reques...ection_58_fina
http://www.whatdotheyknow.com/reques..._the_retrospec

Spin on that Mr Timms!!!