BN66 - the road to Judicial Review

[TAF4]

Tn63

This scheme has been in use for a considerable time and that almost certainly includes a period between 1987 and 2001.

Nearly right Toocan. However, this particular Montpelier scheme didn't exist until after IR35 (March 1999) and wasn't fully developed/launched until somewhere around early 2001. You can read the whole development story here
http://www.judgments.im/content/J983.htm

It explains a lot.

[Tax_shouldnt_be_taxing]

We may as well wait for the Judgement and, if it goes in our favour, we should definitely bombard MPs.

This is getting interesting...

[smalldog]

appeal

Im staring to think more and more that if we win this round then I cant really see HMRC appealing, this has got more holes in it than a piece of Emmental....I may be very wrong, but it might be a lot easier for HMRC to let this quietly go if we win the JR...Otherwise it could get more embarrassing and politically dangerous for some of the people involved..

[SantaClaus]

Im staring to think more and more that if we win this round then I cant really see HMRC appealing, this has got more holes in it than a piece of Emmental....I may be very wrong, but it might be a lot easier for HMRC to let this quietly go if we win the JR...Otherwise it could get more embarrassing and politically dangerous for some of the people involved..

If we win, and its a big "if", I agree this will be very damaging for Stephen Timms, HMRC and the government.

It would also be hugely damaging to New Lie's election chances, as it would imply that they had misled Parliament and the Sovereign. I imagine the press would be all over this like a bad rash

[smalldog]

If we win, and its a big "if", I agree this will be very damaging for Stephen Timms, HMRC and the government.

It would also be hugely damaging to New Lie's election chances, as it would imply that they had misled Parliament and the Sovereign. I imagine the press would be all over this like a bad rash

the interesting thing being I dont think it was the "will of Parliament" as HMRC keep saying, parliament were misled and deceived. Maybe if they knew the facts and werent told this was only clarification, which the judge has refuted already, then they wouldnt have let this proceed in the first place....Im also starting to think maybe Timms has been sold a pup too unknowingly..seems to me like this could all rest with Hartnett and co..

[seadog]

Nearly right Toocan. However, this particular Montpelier scheme didn't exist until after IR35 (March 1999) and wasn't fully developed/launched until somewhere around early 2001. You can read the whole development story here
http://www.judgments.im/content/J983.htm

It explains a lot.

The principle of this scheme was first used by property developers and was recommended to clients by the likes of KPMG & PwC who spotted the opportunity after it was highlighted in the HMRC manual after the Padmore case in 1987

No precise details of how many used it are available, clearly anyone who used it and did not have any enquiries raied in the early days prior to 2001 do not want to have their cases aired in public or risk having their tax affairs opened up again, but at the hearing HMRC admitted that the scheme had been used prior to 2001.

It was only after the massive increace in its use post IR35 that it cauught the attention of HMRC and TN63 makes it clear that in 2002 HMRC cannot find a reason to deny anyone claiming the exemption.

When they opened up hundreds of enquiries they tried to used three arguments that we were not entitled to the exemption. Archer Shee, Ramsey and the general anti avoidance legislation in S739.

It is clear from the testimony which Mr Singh gave on behalf of HMRC that these arguments did not work and the reality is that rather than risk a defeat in the courts by taking 4 test cases to the commissioners as Brannigan told us they would do in late 2007, HMRC tries to circumvent an embarassing defeat and in late 2007 as they admitted in the evidence from MacDowall and Davies (HMRC officals involved in the court case) they came up with the idea that in the 1987 legislation the word "partner" also meant "trustees".

But again rather than test out this very tenuous argumment in court which again had a very high risk of defeat they came up with the idea in late 2007 to "clarify" or as we suggest simply "change" the law restropectively.

The essence of our case is that if they had confidence in any of their arguments they would have used the tried and tested method of testing their argument in court but it was easier to mislead parlaiment than it was to convince a judge and so they opted for retrospective legislation.

Had they clairifed the law immediately they knew about it post the Padmore case or even in 2002 when they issued TN63 they may have acted in good faith, but to wait 7 years allow hundreds of people to assume teh scheme was OK (legitimate expectation) and then bypass the court system, mislead parlaiment and back date the legislation seems a clear breach of our human rights and an inditement of the behaviour of HMRC.

I am confident the Judge will take this view and give a judgement in our favour.

[DonkeyRhubarb]

Excellent post Seadog.

As our Barrister repeatedly stated, it all comes down to proportionality.

It is very hard to see the imposition of a 7-year retrospective tax as proportional in the light of Technical Bulletin 63.

[DonkeyRhubarb]

DR - you are correct except that Montpelier/Gittins have thrown commerciality out of the window. They know they will never recover the money they have spent and continue to spend - so its not a commercial situation.

It is my view that he wants to see me/my family "ruined" at any/all cost [sound familiar !!]. I have tried without success - on several occasions - to negotiate a sensible conclusion to hostilities .

I have posted a reply here:

http://forums.contractoruk.com/accou...ml#post1054501

[SantaClaus]

the interesting thing being I dont think it was the "will of Parliament" as HMRC keep saying, parliament were misled and deceived. Maybe if they knew the facts and werent told this was only clarification, which the judge has refuted already, then they wouldnt have let this proceed in the first place....Im also starting to think maybe Timms has been sold a pup too unknowingly..seems to me like this could all rest with Hartnett and co..

This a a really good point Smalldog. How can the "will of Parliament" override the courts if it was misled in the first place!

I really do hope the Judge is reading this. To a lay-person this argument makes so much sense, but then I'm no lawyer.

[DonkeyRhubarb]

HMRC submitting posts to the JR

For info, I have started a new thread in General.

I think people on these boards have a right to know that HMRC are skulking in the background.

http://forums.contractoruk.com/gener...ml#post1054533