BN66 - the road to Judicial Review

[OnYourBikeGB]

IR35 was not retrospective, where as s.58 is - that is a huge difference. I think HMRC have to prove (or defend) the proportionality of s.58 and right now that looks like a mountain to climb.

Yep, I absolutely agree, but its more a case that we thought we'd win, right up until the decision. I think we will win this, but I'd like to hear someone who like DR or Tax who seem to have a very solid grounding in the legalese do their assessment of Singh. DR is also privy to Elvin's view. I don't know how much he could tell us, but it'd be good to hear. It sounds to me like Singh seems to have put forward a complete mish-mash of case law. Almost a scatter gun attack. And nothing he said sounds like there is a shred of justification for the 7 years of head-scratching Hector went through before clarifying a law that didn't apply.

Great post by the way Santa. Thank-you for all the detail. Go rest those weary fingers.

[helen7]

As I predicted, seems HMRC are basically saying..

retrospection is legal and we don't give a monkeys about the courts findings, we don't have to comply with it.

Do Montp have another chance to respond to HMRC's defense?

I am hoping to be at court tomorrow to cheer montp on.

[Tax_shouldnt_be_taxing]

Rebuttles

Santa (et al). Great job today and well done for keeping the info flowing.

Santa, on the notes you made 2 items from HMRC Counsel need a rebuttle:

1. On the matter of OECD evidence, do we know if our Counsel have reference to the following from the Secretary-General of the OECD:

Donald Johnston, Secretary-General of the OECD, gave his views on the difference between tax evasion and tax avoidance:

"Tax evasion is easy: it involves breaking the law. By tax avoidance OECD means unacceptable avoidance ... This can be contrasted with acceptable tax planning. What is critical is transparency."

So, Elvins position on the SA returns having always declared relief under DTA is supported by the OECD on this basis and in OECD's definition, the scheme is acceptable tax planning (Mr. Johnston's words, not mine).


2. On the matter of the will of Parliament to override the courts, BN66 quotes the following and was presented to Parliament during the debating stages (and argued against by many MP's) that:

"clarify, retrospectively, legislation introduced in 1987, which itself was retrospective, so that it has effect as intended."

Based on the Judges take as noted on the forum, this key element, indeed the one element under question is void. If it was the will of Parliament to pass an Act based on legislation that does not apply to us via retrospection then the will of Parliament has been misled by this statement and indeed, retrospection on our scheme does not apply anyway under BN66 if the Judge deems the scheme not to be caught by 1987. As a result, HR abuse has occured as the retrospection being applied does not affect us and therefore our legitimate expectation has been breached under Article 1 Protocol 1 ECHR.

[Tax_shouldnt_be_taxing]

Singh says...

Singh said “proportionality requires a sociological assessment”.

What on Gods Earth is that supposed to mean? If it means what I think his clutching at straws means, then one would assume it applies "fairly and proportionately" to tax payers and collectors alike.

Which means considering the impact of doing nowt for 7 years and then dreaming up a basis which is legally wrong to hit people with 7 years of back taxes, presenting it to Parliament on the foundation of legislation in 1987 that does not apply to us and coming up with the whole scam just 4 months before they said it would be so. Right, socialogical harassment more likely.

If that's the best Singh has to offer I think I'll sleep better than him tonight.

[not-a-penny]

Thanks Santa for a late Xmas present, it was worth the wait.

I dipped in and out of the gallery during both sessions. Don't want to get overexcited but I'm definitely sleeping better tonight. Well done MP and our main man Elvin.

[SantaClaus]

Singh said “proportionality requires a sociological assessment”.

What on Gods Earth is that supposed to mean? If it means what I think his clutching at straws means, then one would assume it applies "fairly and proportionately" to tax payers and collectors alike.

Which means considering the impact of doing nowt for 7 years and then dreaming up a basis which is legally wrong to hit people with 7 years of back taxes, presenting it to Parliament on the foundation of legislation in 1987 that does not apply to us and coming up with the whole scam just 4 months before they said it would be so. Right, socialogical harassment more likely.

If that's the best Singh has to offer I think I'll sleep better than him tonight.

Interesting comments TSBT. Maybe some others could shed some light on your first post regarding OECD.

My thoughts exactly on “proportionality requires a sociological assessment”. I think we all looked at each quizically when that phrase was mentioned.

I think the main point Singh was driving at in his testimony was that Human Rights law only requires parliament/HMRC to act in a way that is proportional in response to the problem, and that it must strike a fair balance. He was claiming that it doesnt prohibit retrospection in this case.

So the question is: Is retrospective taxation fair and proportional in response to a loss of 200 million to the exchequer (which the Judge admitted was nothing compared to what was spent on Quantative Easing)? And is it a fair balance to bankrupt 2000 people in favour of a theoretical loss to full rate taxpayers?

I guess this will be answered tomorrow.

[silver_lining]

padmore confusion

Based on todays feedback, I finding it difficult to reconcile a specific issue.

It appears that Judge is in agreement Padmore does not apply... the partner/ trust discussion....

If this is the case, is that not end of the story.

HMRC clarified leglislation that does actually apply to the scheme or put another the scheme still works......

some bigger brain enlighten me please... I know I must have missed a meeting.

[Tax_shouldnt_be_taxing]

This could turn out nasty

Interesting comments TSBT. Maybe some others could shed some light on your first post regarding OECD.

My thoughts exactly on “proportionality requires a sociological assessment”. I think we all looked at each quizically when that phrase was mentioned.

I think the main point Singh was driving at in his testimony was that Human Rights law only requires parliament/HMRC to act in a way that is proportional in response to the problem, and that it must strike a fair balance. He was claiming that it doesnt prohibit retrospection in this case.

So the question is: Is retrospective taxation fair and proportional in response to a loss of 200 million to the exchequer (which the Judge admitted was nothing compared to what was spent on Quantative Easing)? And is it a fair balance to bankrupt 2000 people in favour of a theoretical loss to full rate taxpayers?

I guess this will be answered tomorrow.

Agreed. But BN66 clearly states that retrospection applies in terms of 1987 (which our scheme does not fall foul of). The second element of BN66 applies from 12th March 2008 as quoted in BN66:

"The first measure will be treated as having always had effect. The second will have effect for income arising on or after 12 March 2008."

So legally, the first element cannot apply to us if the scheme does not fall foul of 1987. Therefore, and quite rightly (and proportionately), the second point can apply prospectively from 12th March 2008.

Singh claiming that it does not prohibit retrospection is clearly wrong since the first element to which retrospection applies under law does not apply to the scheme. If BN66 was to cover Singh's argument then it should have been written "clearly" to that effect. Notwithstanding, the basis on retrospection in BN66 as presented to Parliament is misleading and therefore Parliament was misled and therefore under Sovereignty (the unwritten Constitution) via Royal Assent, the Monarch was misled. I think there is still an Act in law about such matters...

[Tax_shouldnt_be_taxing]

"Clarification"

Based on todays feedback, I finding it difficult to reconcile a specific issue.

It appears that Judge is in agreement Padmore does not apply... the partner/ trust discussion....

If this is the case, is that not end of the story.

HMRC clarified leglislation that does actually apply to the scheme or put another the scheme still works......

some bigger brain enlighten me please... I know I must have missed a meeting.

The scheme does not work since the second element to BN66 which applies from 12th March 2008 resolves that. This fact is not in dispute at the JR. The first element (retrospection) is and the basis you note is the one which applies for the purpose of the JR and as a result HR breaches as noted in my earlier post. However, it does raise the issue of Parliament being misled on element one of BN66 since the BN66 reference to the scheme and the application of 1987 are at odds now (as if they were not already).

[SantaClaus]

Based on todays feedback, I finding it difficult to reconcile a specific issue.

It appears that Judge is in agreement Padmore does not apply... the partner/ trust discussion....

If this is the case, is that not end of the story.

HMRC clarified leglislation that does actually apply to the scheme or put another the scheme still works......

some bigger brain enlighten me please... I know I must have missed a meeting.

Last post for me tonight before I rest my tired eyes.
Please someone correct me if I am wrong, but I think the gist of the argument is:

HMRC have basically said bollox to the scheme, we dont care if it works or not. It's a fair cop guv, this isn't a clarification of the Padmore law, its retrospection. But we are going to tax you retrospectively anyway.

They have told the Judge that the will of parliament is more important than a a court and European law doesnt necessarily say they cant tax us. It just says such a measure should be proportionate and of "fair balance" in relation to what has occurred.

Singh has cobbled together various cases from Strasbourg to argue this point.

It sounds very un-convincing to me, but who knows how a Judge's mind works. I guess we will know more tomorrow.