BN66 - Round 2 (Court of Appeal)

[DonkeyRhubarb]

there will be blood on the hands of the ministers and HMRC, trust me...

If you read the witness statements given at the JR by HMRC's senior officers, it is clear they couldn't care less what impact this will have on people's lives. As far as they are concerned...

"We brought this on ourselves and it's our own fault - nothing to do with them."

[smalldog]

If you read the witness statements given at the JR by HMRC's senior officers, it is clear they couldn't care less what impact this will have on people's lives. As far as they are concerned...

"We brought this on ourselves and it's our own fault - nothing to do with them."

cool, as long as thats clear...then they obviously have no issue explaining that to children who have just found daddy swinging from the garage rafters because of an unjust tax bill. Im sure the children will see sense

[Morlock]

Is Anybody Else's Spider-Sense Tingling?

Hello,

Not posted here before and not directly involved in this matter. However, as part of a degree course, I am doing background work on the UK Tax System.
...
My research for a White Paper is to evaluate issues such as the Tax Gap, anti-avoidance legislation, fairness in the tax system and the impact of any perceived uncertainty in the UK tax system.

"In The First Degree",
If you're doing research on case law, aren't you wasting your time by investigating an unresolved issue? Also, I'm curious as to why you would call your work a "White Paper" - these are usually political instruments which argue solely in favour of a particular policy or course of action. In my day we wrote essays*...

* with quill pens

[DonkeyRhubarb]

cool, as long as thats clear...then they obviously have no issue explaining that to children who have just found daddy swinging from the garage rafters because of an unjust tax bill. Im sure the children will see sense

I think the only thing that would bother these heartless bastards is if "daddy" decided to come looking for them first.

[Toocan]

HMRC knew exactly what they were doing...since at least 2001

...

For 7 years I submitted our tax returns to HMRC with all the money fully declared. At no point did they challenge any of my tax returns. They were full aware of the whole workings of the arrangement since at least 2002.

...

…and you must have asked yourself why? Why did HMRC sit on their hands for so long while the tax they could be collecting seeped away?

There are some aspects of the handling of the DTA scheme that are surprising – even in the hands of an organisation such as HMRC.

I’m starting this analysis with Mr Padmore. For some reason, HMRC did not mention Padmore to us until the retrospection was announced. At the time, it appeared that they had not linked the scheme with Mr Padmore’s scheme. We now know (from Technical Exchange 63) that they were fully aware that the scheme was Padmore-like from 2001 – ie from inception.

HMRC were not slow in this regard – they were absolutely on the ball.

We can safely assume that prior to TE63 they received legal advice and knew at that point that the scheme worked. So they will have known that existing legislation did not provide a basis for closing the scheme down.

If all of that is true, then they must have known at that point that the only way to “claw-back” tax was to use retrospective legislation.

None of us (or very few) knew the scheme was based on Padmore. TE63 shows that HMRC did. HMRC were not asleep on this issue.

I suspect they did not use prospective legislation either because the amount at stake was small, or because they felt they could bully people into settling. Given how the scheme was being marketed, and they knew the extent of the Montpelier scheme at that time (MTM said there would be ?800? people on the scheme), they would have been able to figure out the likely tax loss year on year. They knew the IR35 motivation and must have (or to a reasonable person been able to figure out) the scale the scheme would reach.

The further legal opinions sought through the years demonstrates that HMRC did not go to sleep on this issue (as we have assumed). Someone was actively pursuing this.

That takes me to retrospection. Why wasn’t the “loophole” closed down retrospectively much earlier? I think the answer to that is political. Tony Blair was on the committee who passed the Padmore legislation in 1987 and was absolute in his opposition to retrospective legislation that back-taxed people. (Padmore 1987 was “administrative” retrospection only – no one paid more tax).

I think HMRC/HMT did “nothing” legislatively because Tony Blair was prime minister. It would not have been acceptable, given what he had said in 1987, to retrospectively close down the DTA scheme [if that retrospection caused people to be back charged tax].

It does not admit to the bounds of probability that retrospection wasn’t broached (whatever that means – it is HMRC’s choice of word) prior to 2007. It may not be recorded in a FoI accessible way, but it must have been discussed in 2001!

Consider – Tony Blair gave up the premiership in 2007 – and his leaving was announced long before he left. When do HMRC admit to retrospection being “broached”? 2007. It came in almost the first Finance Bill it could once Nasty Gordon came to power.

We’ve wrestled on here with whether there was some other trigger that prompted the retrospection – for example the individual that put £60m through the scheme. Well no, because the amount that was put through by the hundreds of smaller claims dwarfs that figure at least up to the date of announcement.

Have a read of this:

(not my usual choice of paper…)

Labour needs to talk about Gordon. Otherwise it will repeat its failures | Andrew Rawnsley | Comment is free | The Observer

It could even be the case that HMRC decided to wait until Tony Blair had gone – ie they actively procrastinated. I remember being told that HRMC “did not seem to have a clue what to do”. The scheme was never supposed to last as long as it did – it was and remains bizarre behaviour of a tax administration (HMRC).

But we know now that isn’t the case – HMRC DID have a clue. TE63 proves that.

In some way, this timeline shows that HMRC acted deliberately and wilfully led us up the garden path. How does that sit with legitimate expectation?

Perhaps this is a story we should all be telling to our MP’s of whatever colour – along with the excellent quote from Gauke. That can only provoke questions in Parliament on the conduct of HMRC – questions that everyone in the country deserves an answer to.

[silver_lining]

Honestly, you really need to go elsewhere.

All, ignore, don't even toy with him.

[seadog]

"In The First Degree",
If you're doing research on case law, aren't you wasting your time by investigating an unresolved issue? Also, I'm curious as to why you would call your work a "White Paper" - these are usually political instruments which argue solely in favour of a particular policy or course of action. In my day we wrote essays*...

* with quill pens

You probably know tht this case is under Judicial review and is going to the Court of appeal in November.

If HMRC get away with this retrospective legislation it will become a legal precident.

Had they made it retrospective from the date of BN66 that would have been in line with the Rees rules and no one could object.

If it is allowed to remain on the statute books anyone in business or who has taken any professioanl tax planning advice had better watch out for more of the same from HMRC

[seadog]

cool, as long as thats clear...then they obviously have no issue explaining that to children who have just found daddy swinging from the garage rafters because of an unjust tax bill. Im sure the children will see sense

This is not as far fetched as you might imagine. There was a case recently in the USA were a man went on the rampage after a dispute with the IRS (American equivalent of HMRC)

And in the UK was'nt one of the reasons why Derrick Bird wen on his killing spree was becuase of a disput with HMRC.

[smalldog]

This is not as far fetched as you might imagine. There was a case recently in the USA were a man went on the rampage after a dispute with the IRS (American equivalent of HMRC)

And in the UK was'nt one of the reasons why Derrick Bird wen on his killing spree was becuase of a disput with HMRC.

From one dog to another, I was being deadly serious!!!!

[screwthis]

BBC News - Tax system 'to be simplified to encourage investment'