BN66 - Time to fight back (Chapter 3)

[helen7]

Got another big package from my FOI request today. This was what seems to be a print out of all the screens on their computer system with my records.

Looks like a microsoft access database!!

It had a telephone history detailing every call I had made, all my tax returns.

I have skim read it but nothing new that I can see.

[SantaClaus]

Same here, big wad of computer records landed on my doorstep.

At least were keeping them busy.

[SantaClaus]

Excuse my lack of fully understanding, will Tuesday actually tell is if we have one our case or will it just tell us if we have won the right to a judicial review? What if the Judge on Tuesday disagrees with our case - is that it? With all that is at stake, I shoul;d know more...sorry!

You are right. Tuesday is just a hearing to decide if we have permission for a Judicial Review.

If the Judge disagrees, my understanding is that we take it to a higher court and eventually the European Court of Human Rights.

Tuesday will be very interesting as we will see how competent or incompetent HMRC are.

I also want to see the face that hides behind the mask of Mr YouKnowWho (TM)

[DonkeyRhubarb]

Parliamentary written answer

Initially this doesn't look relevant because the MP who put the question last month (David Drew, Labour) got his Acts mixed up.

http://services.parliament.uk/hansar...s/part005.html

Finance Act 1987

20th May 2009

Mr. Drew: To ask the Chancellor of the Exchequer (1) for what reason HM Revenue and Customs (HMRC) has decided to close schemes permitted under section 58 of the Finance Act 1987; for what reason the decision was made with retrospective effect; what factors were taken into account in determining that the period of such retrospective effect would be seven years; and what the policy of HMRC is on charging interest on sums owed as a result of retrospective closure; [276192]

(2) what impact assessment HM Revenue and Customs has made of the effect of the retrospective closure of schemes permitted under section 58 of the Finance Act 1987; and if he will assess the effects of the closure on the financial situation of households operating such schemes. [276193]
1400

Mr. Timms: Section 62 Finance (No. 2) Act 1987 retrospectively restored the principle that double taxation treaties do not affect a UK resident’s liability to UK tax on their income or gains. HM Revenue and Customs (HMRC) does not believe that any tax avoidance schemes were permitted under that legislation—although the tax avoidance schemes in question here purported to circumvent it.

Evidence emerged that a large number of people were using the scheme and in light of a number of factors (including the widespread use, aggressive nature and artificiality of the scheme, the deliberate attempt to flout the clear intention of Parliament in 1987 and the need to ensure fairness and certainty for all taxpayers), the Government introduced legislation at section 58 Finance Act 2008 to put beyond doubt that none of the schemes worked—and never had done.

Although, like the 1987 legislation, it is indefinitely retrospective, HMRC is not aware of any relevant schemes prior to 2001. Any tax paid late will be subject to interest in accordance with the relevant legislation on late payments.

Formal impact assessments are not published in respect of measures where the impact is only on those who are avoiding tax and thus one was not published for this particular measure. Such decisions on the production of an impact assessment are taken on a case-by-case basis. As indicated in the 2008 Financial Statement and Budget Report, it is estimated that the tax at stake on the schemes that purported to circumvent the 1987 legislation is around £200 million. Those who used those schemes are, like ail other UK taxpayers, required to pay tax on the profits that they earned.

[Emigre]

Initially this doesn't look relevant because the MP who put the question last month (David Drew, Labour) got his Acts mixed up.

http://services.parliament.uk/hansar...s/part005.html

Finance Act 1987

20th May 2009

Mr. Drew: To ask the Chancellor of the Exchequer (1) for what reason HM Revenue and Customs (HMRC) has decided to close schemes permitted under section 58 of the Finance Act 1987; for what reason the decision was made with retrospective effect; what factors were taken into account in determining that the period of such retrospective effect would be seven years; and what the policy of HMRC is on charging interest on sums owed as a result of retrospective closure; [276192]

(2) what impact assessment HM Revenue and Customs has made of the effect of the retrospective closure of schemes permitted under section 58 of the Finance Act 1987; and if he will assess the effects of the closure on the financial situation of households operating such schemes. [276193]
1400

Mr. Timms: Section 62 Finance (No. 2) Act 1987 retrospectively restored the principle that double taxation treaties do not affect a UK resident’s liability to UK tax on their income or gains. HM Revenue and Customs (HMRC) does not believe that any tax avoidance schemes were permitted under that legislation—although the tax avoidance schemes in question here purported to circumvent it.

Evidence emerged that a large number of people were using the scheme and in light of a number of factors (including the widespread use, aggressive nature and artificiality of the scheme, the deliberate attempt to flout the clear intention of Parliament in 1987 and the need to ensure fairness and certainty for all taxpayers), the Government introduced legislation at section 58 Finance Act 2008 to put beyond doubt that none of the schemes worked—and never had done.

Although, like the 1987 legislation, it is indefinitely retrospective, HMRC is not aware of any relevant schemes prior to 2001. Any tax paid late will be subject to interest in accordance with the relevant legislation on late payments.

Formal impact assessments are not published in respect of measures where the impact is only on those who are avoiding tax and thus one was not published for this particular measure. Such decisions on the production of an impact assessment are taken on a case-by-case basis. As indicated in the 2008 Financial Statement and Budget Report, it is estimated that the tax at stake on the schemes that purported to circumvent the 1987 legislation is around £200 million. Those who used those schemes are, like ail other UK taxpayers, required to pay tax on the profits that they earned.

Well found DR.

Hats off to Mr Drew for tabling the question. The response from Timms was standard slippery. They keep trotting out the fact that the 1987 legislation was itself retrospective quickly followed by the fact that they only became aware of people on it in 2001 doh...

Following Timms logic there would be no impact assessment necessary if the Govt decided to retrospectively cancel ISAs. These guys are in a hole and they know it. They keep trotting out the same lies and Tuesday will be the first step along the road to them paying the price for it. Refreshing that he described it as tax avoidance. Interesting that he describes Section 58 as bringing certainty to ALL taxpayers. er, that would be other than us.

I hope Mr Timms looks over his shoulder when he's out at night - i think the Dementors have already had a piece of him - there's only the corrupt bit left.

[PlaneSailing]

Initially this doesn't look relevant because the MP who put the question last month (David Drew, Labour) got his Acts mixed up.

http://services.parliament.uk/hansar...s/part005.html

Finance Act 1987

20th May 2009
..... (including the widespread use, aggressive nature and artificiality of the scheme, the deliberate attempt to flout the clear intention of Parliament in 1987 and the need to ensure fairness and certainty for all taxpayers), the Government introduced legislation at section 58 Finance Act 2008 to put beyond doubt that none of the schemes worked—and never had done.

.....
Formal impact assessments are not published in respect of measures where the impact is only on those who are avoiding tax and thus one was not published for this particular measure. Such decisions on the production of an impact assessment are taken on a case-by-case basis. As indicated in the 2008 Financial Statement and Budget Report, it is estimated that the tax at stake on the schemes that purported to circumvent the 1987 legislation is around £200 million. Those who used those schemes are, like ail other UK taxpayers, required to pay tax on the profits that they earned.

Has Timms still not got that retrospective legislation is the exact opposite
of certainty?

And as for his £200 million tax take, fat chance of that happening.
I'd have thought the number of people force to go bankrupt
will reduce that figure massively. Mind you, he reckoned that IR35
would bring in £200 million a year and it brought in £1.5 million, so
his forecasting is already looking a bit shakey.

[seadog]

Standard Treasury response

I saw my MP, Helen Southworth and gave hetr a detailed list of questions but after 9 weeks all I got was the same letter.

I am arranging another meeeting to give her a roastiong and ask if she is acting for me or just defending her old labour chums.

Finally, I have received a response from my local MP (Mike Weir) to my question about Section 58. His own answer was simply to pass on a copy of the response he received from Stephen Timms at HM Treasury. Mr Timms answer (verbatim apart from my personal data) -

Dear Michael,

Thank you for your letter of 22nd April enclosing correspondence from your constituent XX, about section 58 of the 2008 Finance Act which was explained in Budget Note 66.

As Jane Kennedy indicated during the Parliamentary debate on the Finance Bill, section 58 prevents a tax avoidance scheme which was set up to abuse the UK's Double Taxation Treaties. The scheme also set out to circumvent legislation introduced in 1987 specifically to stop this type of abuse which itself was retrospective in nature. The Government does not believe that the scheme was ever consistent with the law, since the 1987 legislation applied to it. Section 58 makes it clear that this type of avoidance does not work, never has done and is entirely cocnsistent with the action that Parliament took in 1987.

The Inland Revenue first learned of the scheme in 2001, and successfully settled enquiries with one of the original promoters of the scheme who accepted that the income should be taxed in the UK. The Revenue subsequently initiated enquiries into other users of the scheme. However, during 2007 both the number of disclosures and 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 exceptual circumstances, the Government reserves the to use retrospection , as in this instance, where it is fair, proportionate and in the public interest to do so. Retrospective legislation does not in itself ciontravene the European Convention on Human Rights.

Prior to introducing the legislation the Government considered very carefully the issues relating to fairness and certainty, and the public interest, and took the view that in the circumstances the legislation was appropriate. The users of this scheme embarked on a highly aggressive attempt to avoid tax on UK income or gains in a manner which Parliament previously sought to prevent.

The legislation is now the subject of a number of applications for judicial review. Should those applications go forward, the court will adjudicate on these matters. For the avoidance of doubt, the Government will contest any such proceedings.

Where taxpayers have difficulty meeting their obligations, HMRC has established procedures and guidelines which can be found at: http://www.hmrc.gov.uk/howtopay/prob-indiv-comp.htm.

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

Signed - Stephen Timms

[BrilloPad]

"HM Revenue and Customs (HMRC) does not believe that any tax avoidance schemes were permitted under that legislation"

So why not just go to commissioners? They would have lost.

The Retrospective nature is not just a breach of human rights but of morality too.

[silver_lining]

I saw my MP, Helen Southworth and gave hetr a detailed list of questions but after 9 weeks all I got was the same letter.

I am arranging another meeeting to give her a roastiong and ask if she is acting for me or just defending her old labour chums.

"the Government will contest any such proceedings."

Lets 'clarify' shall we...

"the taxpayer and ironically the individuals we seek to shaft, will fund the Government in the process of contesting any such proceedings."

what a tulip show to think we are funding this stress!

[PlaneSailing]

"the Government will contest any such proceedings."

Lets 'clarify' shall we...

"the taxpayer and ironically the individuals we seek to shaft, will fund the Government in the process of contesting any such proceedings."

what a tulip show to think we are funding this stress!

and since they conveniently don't keep records of how much they
spend on litigation, not only are we paying for it, we'll never know
how much has been wasted.