BN66 - Time to fight back (Chapter 3)

[pastalista]

Would you be prepared to name the schemes you used? It is possible that others on the forum have also used them. Quite a lot of people have moved around different schemes to spread the risk.

It would certainly be interesting to know who ran the double taxation scheme you used, and which years it operated.

HI DR

I would be willing to name them but not just yet as it might be unwise to do so publicly at this point. I will name them when I can.

On another note; no, I didn't use any of these schemes prior to 2001 much as I would like to be able to say I had.

[OldITGit]

European Court of Human Justice

Hi
Does anyone have any details of when the Steed case in Europe is scheduled to be heard? I assumed that this would be our next step after the JR on section 58. If, God forbid, the JR fails in court, would we be appealing in the House of Lords? or into Europe after Steed? or would that be the end of the road?
The other option is .......have the tax planning companies any strategy to amalgamate their judicial efforts at a later stage in the process? or is it more beneficial to have individual cases going forward.
One final question, as I'm not fully up to speed on this, why did HMRC opt for a JR rather than escalating it to their commissioners, where they could no doubt have exercised a great deal of influence over the procedings.
I cannot understand why if they thought they had a case in law that they did not take action sooner by having a test case. It beggars belief that someone can be accused of breaking a law which was not an enforceable law at the time and then 'strengthening' the unenforceable law and introducing
retrospectivity. Their argument appears to be that because there were only a few people using it they ignored it, once it became popular and predicted tax income was plummeting they thought that it was time to penalise the IT contractors again as IR35 has proved to be a massive failure.
I just wonder when they will decide to attack the loans schemes and how they will justify retrospectivity for that. I can remember when it was proposed by a Revenue think tank that one-man companies should pay tax on gross company income and claim back any justifiable monies due from HMRC, but the Government of the time, when they heard that it would lead to a brain drain from the UK, had the sense to squash it. Unfortunately the crowd who are in now cannot see past their own expenses claims!!!

[DonkeyRhubarb]

Hi
Does anyone have any details of when the Steed case in Europe is scheduled to be heard? I assumed that this would be our next step after the JR on section 58. If, God forbid, the JR fails in court, would we be appealing in the House of Lords? or into Europe after Steed? or would that be the end of the road?
The other option is .......have the tax planning companies any strategy to amalgamate their judicial efforts at a later stage in the process? or is it more beneficial to have individual cases going forward.
One final question, as I'm not fully up to speed on this, why did HMRC opt for a JR rather than escalating it to their commissioners, where they could no doubt have exercised a great deal of influence over the procedings.
I cannot understand why if they thought they had a case in law that they did not take action sooner by having a test case. It beggars belief that someone can be accused of breaking a law which was not an enforceable law at the time and then 'strengthening' the unenforceable law and introducing
retrospectivity. Their argument appears to be that because there were only a few people using it they ignored it, once it became popular and predicted tax income was plummeting they thought that it was time to penalise the IT contractors again as IR35 has proved to be a massive failure.
I just wonder when they will decide to attack the loans schemes and how they will justify retrospectivity for that. I can remember when it was proposed by a Revenue think tank that one-man companies should pay tax on gross company income and claim back any justifiable monies due from HMRC, but the Government of the time, when they heard that it would lead to a brain drain from the UK, had the sense to squash it. Unfortunately the crowd who are in now cannot see past their own expenses claims!!!

Steed submitted their application to ECHR in January as I recall. It could take many months before the application is even considered.

Can't comment on the post-JR appeals process because I simply don't know. I don't think it's even worth speculating because there are too many variables.

It wasn't HMRC who opted for a JR. Montpelier applied for this. HMRC could have taken cases to the Commissioners at any time between 2003 and 2008 but I think we know why they didn't.

In theory, they could take a case to the commissioners now but it wouldn't get them anywhere with a case pending in a higher court.

It's not true to say that HMRC only got the Govt to act when the scheme became "popular". Just look at the number of returns under enquiry (obtained from HMRC through FOI) which tell a different story.

2001/02 - 229
2002/03 - 428
2003/04 - 759
2004/05 - 838
2005/06 - 935

They knew about the scheme in 2001. They negotiated a deal with Suo Motu in late 2002. So why didn't they do something in the Finance Act of 2003, 2004 or even 2005? Why wait until 2008? Were they in hibernation or something?

Aside from all the ethical arguments against retrospective legislation, HMRC should not be allowed this option because it rewards failure and incompetence.

[OldITGit]

Thanks DR

Many Thanks for all the info
much appreciated
OIG

[Emigre]

...it rewards failure and incompetence.

And that my friend is what this Government is in its own league on

[mossman]

Interest

I've just received a Self Assessment Tax Calculation from my local tax office for the year ended April 2002.

It shows the extra tax that they think I owe them for that year, but makes no mention of interest.

As the tax due date is 31 January 2003, there must surely be a lot of interest accrued, so why not tell me what it is? This means I still don't know exactly what I am up against if the scheme fails.

Obviously I'll be forwarding the correspondence to MontP.

As I am now on the dole, I am pretty fed up with the whole situation. I was in the scheme during a boom time, now I am earning nothing. I am going to get a CTD with what remains of my savings to prevent further interest building up.

[DonkeyRhubarb]

As the tax due date is 31 January 2003, there must surely be a lot of interest accrued, so why not tell me what it is? This means I still don't know exactly what I am up against if the scheme fails.

I have used HMRC's historical interest rates to come up with the following estimates of accrued interest.

http://www.hmrc.gov.uk/rates/interest-late.htm

Due Date..........Accrued Interest
Jan 2003..................43%
Jan 2004..................37%
Jan 2005..................30%
Jan 2006..................23%
Jan 2007..................16%
Jan 2008..................8%
Jan 2009..................1%

If you were in the scheme during the early years it is very grim. The fact that the legislation allows HMRC to charge retrospective interest on a retrospective tax is one of the most outrageous aspects of it.

As HMRC are currently only charging 2.5%, it is debatable whether it's worth bothering with a CTD at the moment.

[DonkeyRhubarb]

For info

I have updated the front page:

http://forums.contractoruk.com/accou...apter-3-a.html

[kiwinlondon]

As HMRC are currently only charging 2.5%, it is debatable whether it's worth bothering with a CTD at the moment.[/QUOTE]

Its not ... you can get 3-4% from banks if you hunt around!

[BrilloPad]

I have used HMRC's historical interest rates to come up with the following estimates of accrued interest.

http://www.hmrc.gov.uk/rates/interest-late.htm

Due Date..........Accrued Interest
Jan 2003..................43%
Jan 2004..................37%
Jan 2005..................30%
Jan 2006..................23%
Jan 2007..................16%
Jan 2008..................8%
Jan 2009..................1%

If you were in the scheme during the early years it is very grim. The fact that the legislation allows HMRC to charge retrospective interest on a retrospective tax is one of the most outrageous aspects of it.

As HMRC are currently only charging 2.5%, it is debatable whether it's worth bothering with a CTD at the moment.

I have updated the front page:

http://forums.contractoruk.com/accou...apter-3-a.html

Well done DR