BN66 - JR Judgement Day

[BolshieBastard]

Look I really do understand the pressures you guys are under and you genuinely have my every sympathy. I'm not trying to point fingers or show how clever I've been but merely keep you aware of how the other side is probably viewing things. The judgement was exactly as expected as is the way forward., which now has a reasonable chance of success since it is now about the rights or wrongs of BN66 rather than the precise wording of the law; if it stayed as the latter you'd have no chance.

So lay off the personal attacks, OK?

Why dont you just **** off, eh?

[Tax_shouldnt_be_taxing]

An empirical review of tax fairness

Have a read of this. I wonder if the folks in HMRC or the Judge at the JR read it:

http://www.accaglobal.com/documents/tech-tp-ft.pdf

And this comes from an unbiased piece of research into the fairness of tax in a number of countries using empirical evidence.

When you read it all, I fail to see how fair share can be used by HMRC as a reason for retrospection or having the audacity to even bring the word fair to their lips.

A rather good extract:

A disturbing trend throughout the questionnaire is that
there appears to be a consistent response from the UK
that taxes are unfair, too complex, lack transparency and
that there is inadequate communication from the tax
authorities. This is echoed in the UK focus group.
The complexity of legislation, particularly the increase
over the last ten years, makes it difficult for laypeople to
understand. This complexity creates unfairness and most
people are disadvantaged (Accountant in a small
practice – UK focus group).
Participants in the UK focus group also believed that
retrospective changes to tax policies are unfair, citing the
Arctic Systems case as typifying this.
There certainly seems to be a message from the UK in
general that the lack of clarity in the legislation combined
with increasing complexity and a seemingly aggressive
stance by HMRC is leading to a breakdown of trust in the
system, as summarised in the following view.
For tax to be fair and for people to have confidence in it,
it has to be simple. It seems to me that the tax legislation
... has become so complex in the last three or four years
that it’s become inequitable. No one knows now what’s
going on. There’s been a mushrooming of legislation:
every day [the] Inland Revenue website will be
introducing something. I mean, I deal with tax and that’s
all I deal with, and I can’t keep up with the deluge of
regulations and legislation. And it’s just become
inequitable, I think (Tax manager in a regional practice,
quoted in Chittenden and Derregia 2006).

[portseven]

The harder HMRC squeeze, the less they will get:

http://business.timesonline.co.uk/to...cle7026265.ece

Do we think our recent case raising the spectre or retrospection will have caused some of these firms to think about exiting the UK? Would be good if some of these firms mentioned retrospection to highlight our case.

[OnYourBikeGB]

Have a read of this. I wonder if the folks in HMRC or the Judge at the JR read it:

http://www.accaglobal.com/documents/tech-tp-ft.pdf

And this comes from an unbiased piece of research into the fairness of tax in a number of countries using empirical evidence.

...

Excellent post.

The term 'fair share' is just a way to try to label us as cheats, by implying we are doing something underhand. It's really pretty repulsive, when you think how HMRC and their political poodles have twisted and deceived. Look at the 'fairness' of HMRC, the 'fairness' of the tax breaks for non-doms, the 'fairness' of the home flipping etc etc etc etc. It's just a word, it has no substance, it most certainly has no meaning, under their own rules. What it means is, we got a bit above our station, and seeing as there is no economic risk to them, they're going to slap us down. Well, I hope for the sake of this country that we win on appeal. I'd never in a million years take a company into the UK with a tax system as ridiculous as this one. If we lose, the message 'Stay Out Of Back Tax UK' will be written from one end of the UK to the other. They might get some money out of us, they're going to get hammered on lost investment.

Mal - Just while I'm here. Sometimes it's actually a good thing to have a devil's advocate, it's a safety check. But when it gets round to 'I told you so', nobody wants to know. You fall right into the 'smirking pious' category. None of us are stupid, we all knew what could happen. You have obviously led a blemish free and most perfect life, and we really aren't worthy of your pearls of wisdom so generously and benignly gifted upon us, not to mention your wonderful foresight. But let's be honest here, purer than the driven snow you might be, but coming onto this thread, and rubbing a few noses in it, well ... you got to expect a few insults haven't you? So dry your eyes.

[Tax_shouldnt_be_taxing]

Excellent post.

The term 'fair share' is just a way to try to label us as cheats, by implying we are doing something underhand. It's really pretty repulsive, when you think how HMRC and their political poodles have twisted and deceived. Look at the 'fairness' of HMRC, the 'fairness' of the tax breaks for non-doms, the 'fairness' of the home flipping etc etc etc etc. It's just a word, it has no substance, it most certainly has no meaning, under their own rules. .

Thanks.

And just whilst I think on it for a while, can someone in HMRC give a definition of "fair share" and where we laypeople can refer to it so as to organise our affairs accordingly? I cannot imagine a traffic cop saying "you've had your fair share of let offs for speeding over the last 6 years, so now you'll get points for each of the past offences now I've deciced points must be enforced."

Also, does anyone know what "social policy" means? DR, perhaps we need another poll to qualify this new piece of "legislation". Does it for example include teenagers getting pregnant so they get benefits by default or illegals not paying any tax at all but getting HR on their side because going back to the Med might kill them from Climate Change.

Maybe there needs to be a public debate on what social policy IS, when it was formed and who it applies to. I mean, if this is one of the new cornerstones of the oldest democracies then it's worthy of a public debate or even a referendrum. Perhaps the Tories could launch a campaign on Labours Social Tax Policy. I'd love to see PMQ for that one!

Oh... And when this "new" legislation as opposed to written law was enacted. Me guess - April 2008.

Off to bed - no woman, no cry...

[phileds]

What to do next

Hi, I've not posted here in some time but have been a loyal lurker.

First, a big thanks to DR and his efforts at keeping a detailed eye on the situation and for helping maintain morale.

My tax hit is just about manageable, just, but it will mean the next few years will be very very tight.

I'd like to clear up one question (though it won't do anything of the sort I suspect) - NorthernSoul is a mate of mine who does indeed work in IT, and is also qualified in law. I've had endless arguments with him about this situation, and he has dismayed me with his opinion - that, in short, we're stuffed - he isn't a judge, much though he likes to think he is, but he also speaks from a position of greater legal understanding than me (and I suspect most of us here).

I'm not sure I understand or agree with his "point of view", nor claim to understand the finer points of the legal argument, but one thing that is sinking in is that the way the law works is not the way we or Montpelier want it to work - it has its own protocols many of which defy common sense - but that's the way it is. I've harped on at NS endlessly about the unfairness of the new law - but it is NOT the first retrospective law to be raised in the UK (wasn't Padmore retrospective?) - so we cannot complain about lack of precedent as such. As for the much-vaunted letter of the law, I'm not sure even that holds the weight we'd like. My understanding is that judges can look at the intention of the law.

It's unarguable that HMRC should not have dragged its feet for the six years between putting the scheme on notice in 2002 and finally getting a legal decision on the scheme. But I'm not sure (and correct me if I'm wrong) that the delay in itself is anything we can complain about in law - sure, common sense and fairness would indicate a govt body should act quickly - but would a court or a judge put the onus on HMRC to have acted quicker than it did?

Another point NS makes to which I do not have an answer - if Montpelier were so sure of their position, could they not have forced the issue and met HMRC in court, to clarify the position they were so sure of, and before the amended law came out?? I know they had some cases "prepared", but that's very very different to seeing HMRC in court.

Anyway, I'd be interested to hear opinions. The above may no doubt have been argued elsewhere here, so apologies if I'm missing important points.

[PlaneSailing]

Hi, I've not posted here in some time but have been a loyal lurker.

First, a big thanks to DR and his efforts at keeping a detailed eye on the situation and for helping maintain morale.

My tax hit is just about manageable, just, but it will mean the next few years will be very very tight.

I'd like to clear up one question (though it won't do anything of the sort I suspect) - NorthernSoul is a mate of mine who does indeed work in IT, and is also qualified in law. I've had endless arguments with him about this situation, and he has dismayed me with his opinion - that, in short, we're stuffed - he isn't a judge, much though he likes to think he is, but he also speaks from a position of greater legal understanding than me (and I suspect most of us here).

I'm not sure I understand or agree with his "point of view", nor claim to understand the finer points of the legal argument, but one thing that is sinking in is that the way the law works is not the way we or Montpelier want it to work - it has its own protocols many of which defy common sense - but that's the way it is. I've harped on at NS endlessly about the unfairness of the new law - but it is NOT the first retrospective law to be raised in the UK (wasn't Padmore retrospective?) - so we cannot complain about lack of precedent as such. As for the much-vaunted letter of the law, I'm not sure even that holds the weight we'd like. My understanding is that judges can look at the intention of the law.

It's unarguable that HMRC should not have dragged its feet for the six years between putting the scheme on notice in 2002 and finally getting a legal decision on the scheme. But I'm not sure (and correct me if I'm wrong) that the delay in itself is anything we can complain about in law - sure, common sense and fairness would indicate a govt body should act quickly - but would a court or a judge put the onus on HMRC to have acted quicker than it did?

Another point NS makes to which I do not have an answer - if Montpelier were so sure of their position, could they not have forced the issue and met HMRC in court, to clarify the position they were so sure of, and before the amended law came out?? I know they had some cases "prepared", but that's very very different to seeing HMRC in court.

Anyway, I'd be interested to hear opinions. The above may no doubt have been argued elsewhere here, so apologies if I'm missing important points.

Much as I love NS's rantings, the final point is quite clear. In between
2001 and 2008 there WAS a move to go to the Commisioners. For
reasons, best known to the HMRC, this was repeatedly delayed,
until finally BN66 appeared, 'to put the matter beyond doubt'.

Although I am confuesd as to why we should be in a position
to prove our innocence.

My conscience is clear.

[PlaneSailing]

Atrificial you say?

Whilst I'm here, he's one from way back in the thread (apologies for long
time readers)...



http://news.bbc.co.uk/1/hi/business/2263208.stm


And according to the National Audit Office:

The location of Mapeley STEPS Limited in Bermuda has no material effect on
the overall value for money of this deal to the UK taxpayer. Mapeley STEPS
estimated that if it had been required to bring the STEPS properties onshore, its bid price would have had to increase by £55 million to cover the extra UK tax that might have been due.This is not a material figure in terms of a £1.5 billion deal or in the difference between the Mapeley STEPS bid and the nearest bidder and was not therefore a deciding factor in selecting Mapeley STEPS.


The avoidance of £55million pounds in tax is 'not material'.

[DonkeyRhubarb]

Another point NS makes to which I do not have an answer - if Montpelier were so sure of their position, could they not have forced the issue and met HMRC in court, to clarify the position they were so sure of, and before the amended law came out?? I know they had some cases "prepared", but that's very very different to seeing HMRC in court.

The facts are:

HMRC issued Closure Notices to 4 test cases in March 2006. Montpelier duly appealed and HMRC said they would be listed at the Special Commissioners. HMRC then wrote to the rest of us asking us if we were prepared to accept the outcome of these lead cases.

With the benefit of hindsight, perhaps Montpelier should have forced the issue sooner but at no point did HMRC give any indication that they were not serious about taking these 4 cases to court.

[Morlock]

...
How about this as a proposal that folks who are writing to their members of parliament might put forward?
When writing to MP's, while saying that retrospective legislation is nearly always wrong:
1) It should only be enacted in the most exceptional circumstances
2) How far back it can go should ALWAYS be limited - preferably by statute.
...
So how about suggesting to our MP's that when, in exceptional circumstances retrospective tax legislation is enacted, that it will NEVER go back further than the tax period before the one in which the legislation is enacted?

In the USA, retrospective legislation of any kind is against the constitution.
In Australia, retrospection can go back only to the date that a newly-passed law was first put before Parliament.