BN66 - Round 2 (Court of Appeal)

[smalldog]

letter

second letter sent after getting the "public finances" reply nonsense..

[DonkeyRhubarb]

Thanks DR. Just wondered. I am a fish out of water when it comes to this stuff. Lets face it the law, the interpretation of it and the processes around enforcement are not exactly straight forward. This whole situation was bought about through interpretation or mis-interpretation of the rules.

Don't worry, you're not alone. It's taken me ages to get my head around it. This is why we prepared the templates below, because I know a lot of people don't feel comfortable enough with this stuff to convey the arguments in their own words.

Incidentally, it would have been easy for Ministers to dodge this whole issue by responding that they couldn't comment while the matter was sub judice. But so far they haven't done this.

[theoctopus]

the nations finances

Don't worry, you're not alone. It's taken me ages to get my head around it. This is why we prepared the templates below, because I know a lot of people don't feel comfortable enough with this stuff to convey the arguments in their own words.

Incidentally, it would have been easy for Ministers to dodge this whole issue by responding that they couldn't comment while the matter was sub judice. But so far they haven't done this.

DR, thanks again for all your efforts in pulling together the letters to our MP's. I am sending the follow up 'nations finances are the obstacle' letter to Stephen Hammond today with a few tweaks.

This got me thinking... if the nations finances are the obstacle to repealing s58, then presumably they are saying that justice and fair treatment for tax payers depends upon the amount of money coming into the exchequer. I cant see GeorgeO or DavidC going on the 9 o'clock news to say that.

This then led me to think that we should ask for a commitment from the government to (at some future time) retrospectively repeal s58, forcing HMRC to give us all refunds (+interest) for any money we are forced to hand over. The net effect on the Exchequer is therefore nil, so they may as well get rid of s58 now and save everyone a lot of hassle and heartache.

[DonkeyRhubarb]

This got me thinking... if the nations finances are the obstacle to repealing s58, then presumably they are saying that justice and fair treatment for tax payers depends upon the amount of money coming into the exchequer.

In effect, justice is only available if we can afford it.

To be honest, I think this is a red herring. They know that it will be years before HMRC can collect anything, and the amounts involved are a drop in the ocean.

The only people saying this are Tory MPs. They are not quoting Government policy, and there's no way a Minister would ever go on record stating this.

Apart from anything else, a recent FOI request revealed that HMRC has nearly 30,000 people under enquiry for tax avoidance. None of this "virtual" tax revenue would ever form part of a Budget, because it relates to previous fiscal years.

In the end, this comes down to a simple choice. Does the Government do something about it now, or let HMRC carry on down the legal route. I don't believe money will be a significant factor.

[DonkeyRhubarb]

Interestingly enough

Since budgets are only about future revenue & spending, repealing s.58 would be budget neutral.

The scheme was stopped in 2008, so repealing the retrospective element would have no effect on future revenue projections.

[RingStinger]

Hmmm...... nothing from John Redwood in the 3 weeks since I sent him the letter. He's been updating his blog daily, so he's not been on holiday

Time for a nudge I think ....

[CanPayButWouldRatherNot]

ctd vs offset mortgage

I remember back in one of the earlier threads where someone did some nice analysis of ctd vs offset mortgage and at the time offset one (compound vs simple interest)..

I take it that is still the case .....and anyone know where that post was ...lost in the other excellent posts !

Cheers
CPBWRN

[TheBarCapBoyz]

second letter sent after getting the "public finances" reply nonsense..

Hang on. Time out.

What public finances nonsense? The potential revenue from BN66 is not included in the public finances, and couldn't be since the Government aren't likely to receive anything until about 2015.

And in any case, the public finances are the same as they were when the Tories and LibDems opposed BN66.
The BarCapBoyz sincerely hope this isn't going to be the standard response. Which MP has replied with that?

[Slobbo]

News on Radio 2 - Non Dom tax recovery a failure

Radio 2 just ran a story which was saying that Labours 600 million pound recovery of tax from Non Doms resulted in a recovery of only £130 million. 21% of the promised revenue. Wonder how much it cost to recover that £130 million.

[DonkeyRhubarb]

I remember back in one of the earlier threads where someone did some nice analysis of ctd vs offset mortgage and at the time offset one (compound vs simple interest)..

I take it that is still the case .....and anyone know where that post was ...lost in the other excellent posts !

Cheers
CPBWRN

It's easier to redo the analysis than find the post.

HMRC currently charge 3% interest. This is simple interest.

If your current liability was £100 tax + £50 accrued interest, then you'd be charged 3% on the £100 (£3). The effective rate of interest is therefore 2% of £150 (£3).

If you had the £150 in an offset mortgage, then as long as your mortgage is more than 2%, it makes more sense to keep doing this than take out a CTD.

As a rough rule of thumb, if your mortgage rate is more than the interest rate HMRC charge, then you will be better off sticking with the offset than getting a CTD.

HMRC's current rate of interest can be found here:
HM Revenue & Customs: Rates and Allowances - Interest rate on late payments