BN66 - the road to Judicial Review

[SantaClaus]

To seek compensation you would have to demonstrate a real and measurable loss. I dont think having your SA return queried, a closure notice issued and subsequently amended/retracted after successful appeal really does it.

I think that's rather unfair and insensitive.

I can't speak for everyone here, but there are many people who have suffered emotional loss and deterioration in health due to BN66.

[Rhydd]

Newspapers

Travellingknob said: "I have a similar view on sending something to the newspapers to draw their attention to the case".

My feeling is that we should be very cautious about offering the story to newspapers.

I can imagine that they might prefer to run a "Whinging Tax Dodger Fat Cats" story about people who haven't paid a "fair amount of tax". Given the treatment of bankers etc. I don't think we'd get sympathy from most of the media in spite of how much we have been wronged and how much people have suffered from it.

[Squicker]

I'm not sure that HMRC have a choice in the matter. They are really after the power to change tax law retrospectively - that is what this case is about. They could only back off now if the politicians told them to.

You have to remember the HMRC people reading this are just monkeys. It's only the organ grinders who can change this and they are now fully committed.

[ROBIN REDBREAST]

Agreed

Not being able to live any sort of "normal" life, cutting back on all spending to save for a tax bill that right now I cannot honour even though the law at the time demonstrated we were acting within the law..

I concur with that Santa..matrimonial break up, illness and absence from work through stress....I'd say pretty tangible...

I think that's rather unfair and insensitive.

I can't speak for everyone here, but there are many people who have suffered emotional loss and deterioration in health due to BN66.

[Tax_shouldnt_be_taxing]

A "turncoat moment"

My Barrister friend and his wife (an Accountant) were over this evening. Naturally BN66 came up again during conversation. My jaw dropped when he said essentially this:

"We' had a good talk about this over the weekend. You know, you cannot escape the fact that what happened was artificial, wholly contrived, aggressive and abusive. The transparency test will fail. Those who took part will end up the creek without not just a paddle, but the canoe, so get ready."

You can imagine the silence in the room. I just couldn't believe this guy who is in the know and his wife who deals with tax, had now found themselves coming to this viewpoint. Aweful, just aweful.

Nearly ready to ask them to leave, I noted "I cannot believe you have sided with HMRC on this after all we talked about."

With a wry smile, he said, "I'm talking about HMRC, not you."

We opened a bottle of wine.

A true story.

Hopped to my PC to write this up as we're still bantering about a rather good windup.

A bright moment in an otherwise protracted period (years) of stress and worry.

[not-a-penny]

You scared the s*it out me

My Barrister friend and his wife (an Accountant) were over this evening. Naturally BN66 came up again during conversation. My jaw dropped when he said essentially this:

"We' had a good talk about this over the weekend. You know, you cannot escape the fact that what happened was artificial, wholly contrived, aggressive and abusive. The transparency test will fail. Those who took part will end up the creek without not just a paddle, but the canoe, so get ready."

You can imagine the silence in the room. I just couldn't believe this guy who is in the know and his wife who deals with tax, had now found themselves coming to this viewpoint. Aweful, just aweful.

Nearly ready to ask them to leave, I noted "I cannot believe you have sided with HMRC on this after all we talked about."

With a wry smile, he said, "I'm talking about HMRC, not you."

We opened a bottle of wine.

A true story.

Hopped to my PC to write this up as we're still bantering about a rather good windup.

A bright moment in an otherwise protracted period (years) of stress and worry.

[GavM]

You scared the s*it out me

WHS +1

[Plonker]

TSBT - that was not very nice!

I started suffering heart palpitations and needed a double Captain Morgan and coke to calm my nerves and regain my sanity...... a bit early in the morning for that.

[CanPayButWouldRatherNot]

Brillopad ...sinbin ?

Admin> BP generated the steam under which this train has taken us on a journey where we have collected some wonderful allies to take forward this quest for truth. His enthusiasm/intelligence and humour do balance his dark side.

Somewhere between "letting him off" and "banning him" lies the middle ground of "n days in the cooler" ..15 days in the sin bin/yellow card ? .....can you not consider this ?

We are all grown ups and know that ....forums can get heated on occasion but its is still all "sticks n stones" ..... and more often than not quite tongue in cheek.

IMHO I'd like to see BP back......his devils tail between his legs.
Come on guys ....make friends make friends ...never never break friends.
admin BP

[DonkeyRhubarb]

History

Thought I'd document this for future reference.

Sequence of events

May 2001

MTM scheme starts operating

Late 2001

Jones and Morris split from MTM to set up “Suo Motu” scheme

July 2002

HMRC issues Technical Exchange 63 to tax offices, advising them of the existence of the scheme and what to look for in 2001/2 returns. The document describes in detail how the scheme works and says they don’t know how to challenge it. There is no mention of Padmore or the 1987 legislation being applicable. It reports that several hundred people have created trusts for the purpose of using the scheme. It also mentions that it is being used to circumvent IR35.

Late 2002

Jones approaches HMRC to reach a settlement for Suo Motu’s circa 140 clients in respect of tax years 2001/2 & 2002/3. It is claimed this is because of an opinion from David Milne QC which casts doubt on the efficacy of the scheme, but by this stage Jones and Morris are already embroiled in a legal dispute with Montpelier over intellectual property rights.

March 2003

HMRC settles with Suo Motu (Murilo Ltd) clients. They are granted some concessions eg. no additional NICs, lower rate of tax, no interest

June 2003

HMRC opens enquiries into the 2001/2 SA return of 4 clients of MTM, who they have selected as test cases

Late 2003

HMRC opens enquiries into the 2001/2 returns of the 200 or so remaining MTM clients who used the scheme in the first year. (This process of opening enquiries continues in all subsequent tax years)

2003-2006

HMRC writes to users offering various arguments as to why the scheme doesn’t work, none of which mention Padmore or 1987.

March 2006

HMRC issues Closure Notices to the 4 test cases, with amendments to their self assessments. The technical arguments given by HMRC do not mention the 1987 legislation or “Padmore”.

April 2006

Montpelier appeals the amendments and applies for postponement of additional tax/NIC. Montpelier also sets out its technical arguments for the appeal.

June 2006

HMRC acknowledges the appeals and asks Montpelier if it agrees that the appeals will fall to be heard by the Special Commissioners.

April 2007

HMRC writes to confirm that the appeals are in the process of being listed for hearing before the Special Commissioners, and that they will be writing again shortly concerning the arrangements for the appeal hearing.

October 2007

HMRC forms the opinion for the very first time that the 1987 legislation applies to the scheme.

February 2008

HMRC writes to users advising them of this new opinion.

March 2008

Legislation is announced in Budget Note 66 to retrospectively “clarify” the 1987 legislation.

Tax Returns under enquiry by HMRC

Note:
- these figures were obtained under FOI
- they include all schemes (deGraaf, Steed, property developers etc.), not just Montpelier
- they don't include Suo Motu, who settled before any enquiries were opened.

Tax Year........Number of enquiries opened
2001/02...................229
2002/03...................428
2003/04...................759
2004/05...................838
2005/06...................935
2006/07..................1248