BN66 - Round 2 (Court of Appeal)

[silver_lining]

Worryingly......... is intended.

We can debate the artificial point all day long: my main concern is how we argued this point in the COA over the last few days as I strongly feel it was one of the areas that needed to be addressed following the HC.

You could holistically argue that all tax planning seeking to avoid paying tax is artificially structured and was obviously not the intention of the respective parliament(s), governments or treasuries affected. As was pointed out perviously, a cursory glance at any blue chip or corporate balance sheet tells it all; try and tell me they are not artificial in structure (note use of the term artificial in this context is based on what I believe parliament and or the courts would feel was unintended by the respective tax legalisation) ...but please do explain why they are treated differently in the eyes of the law? Once these points are accepted, thereafter we fall outside legal territory and into subjection and conjecture e.g. with phrases like 'wholly artificial'.... or the beneficiary does not pay a 'fair share'... etc. I believe HMRC accept the level of artificiality by the corporates and blue chips as they are viewed as being 'significant' contributors to the economy and pay their infamous 'fair share' even though they avoid paying billions... through conventional planning, simple politics.

I feel the point regarding whether or not the structure was artificial needed to be addressed as whether we like it or not A1P1 allows wide margins and case history does show artificiality as an important consideration, regardless.

Our legal, in my opinion, did not counter this point enough for my liking in the HC, and this was reflected in Parkers summary "The submission made on behalf of HMRC (and not seriously disputed by counsel for the claimant) that the elaborate arrangements entered into were artificial".

I do hope we did enough in this space over the last few days as I feel this point will form one of the cornerstones of the summary; fingers crossed.

[OnYourBikeGB]

But that wasn't the case with Parker. His own subjective moral compass appeared and led him in an entirely different direction to that of studying the law, in my opinion. All this bs about fair share of tax blah blah which is purely subjective and has a multitude of interpretations.

I think Parker's mind was made up even before he sat down. The speed of that decision meant that he could not possibly have started his reflectiions post-JR. If I'm being generous, I'd say that we was waiting to hear if there was anything that moved him from what he had already decided. His background was HMRC, and it coloured his view. He started from a position, then he justified it by propping it up with new concepts, and of course he let Singh prattle on with quotes from the forum, when he could just as easily batted it away like it was yesterday. I hope we win, but if we don't some stinging criticism will help, because whatever happens, this will continue up through the courts.

[NO TO RETRO]

Outcome

Indeed.

The Judges didn't really give much away, so there's no way of telling which way it will go.

Pardon me if you have recently been over this but is it worth just going over what the potential outcomes of the COA are and what this will mean for us, while we all wait with baited breath for the Judges to speak?
DR/Anyone?

[DonkeyRhubarb]

Pardon me if you have recently been over this but is it worth just going over what the potential outcomes of the COA are and what this will mean for us, while we all wait with baited breath for the Judges to speak?
DR/Anyone?

I'll have a go.

We could either get a unanimous decision either way (3-0), or a majority ruling (2-1).

With the PwC case, the option exists for the CoA to refer it to the ECJ. If they did this then the case would be adjourned by the CoA awaiting a decision of the European court.

Even if we lose, the wording of the judgment is important. Parker barely levelled any criticism at HMRC. I would hope the CoA would at the very least acknowledge HMRC's poor performance in dealing with the matter.

Whichever side loses then an appeal to the Supreme Court seems most likely, followed by possible appeals to ECtHR.

Whether the Government would intervene at any stage, or just let the proceedings run their course, is hard to say.

[deckster]

I'll have a go.

We could either get a unanimous decision either way (3-0), or a majority ruling (2-1).

With the PwC case, the option exists for the CoA to refer it to the ECJ. If they did this then the case would be adjourned by the CoA awaiting a decision of the European court.

Even if we lose, the wording of the judgment is important. Parker barely levelled any criticism at HMRC. I would hope the CoA would at the very least acknowledge HMRC's poor performance in dealing with the matter.

Whichever side loses then an appeal to the Supreme Court seems most likely, followed by possible appeals to ECtHR.

Whether the Government would intervene at any stage, or just let the proceedings run their course, is hard to say.

So further to this, my take on the possible outcomes are:

1) We win
a) Government/HMRC back down, we all go home happy.
b) Government says 'tough, we're infringing your human rights, so what'. It's not clear to me what happens here.

2) We lose
a) MontP throws in the towel, we pay up/go bankrupt
b) MontP take the case to the Supreme Court
i) In the meantime, HMRC say pay up now -> MontP appeal this
ii) HMRC continue to defer collection pending Supreme Court decision

Hoping for 1) a)...expecting 2) b) ii)...

[NO TO RETRO]

Whichever side loses then an appeal to the Supreme Court seems most likely, followed by possible appeals to ECtHR.


Cheers DR.
So basically, we will probably be none the wiser at the end of this year as to which way this will ultimately go.
Fantastic!

[Vallah]

Whichever side loses then an appeal to the Supreme Court seems most likely, followed by possible appeals to ECtHR.


Cheers DR.
So basically, we will probably be none the wiser at the end of this year as to which way this will ultimately go.
Fantastic!

Obviously it's always better to win, especially the higher up the chain you go.

[DonkeyRhubarb]

So further to this, my take on the possible outcomes are:

1) We win
a) Government/HMRC back down, we all go home happy.
b) Government says 'tough, we're infringing your human rights, so what'. It's not clear to me what happens here.
c) HMRC appeals to Supreme Court

2) We lose
a) MontP throws in the towel, we pay up/go bankrupt
b) MontP take the case to the Supreme Court
i) In the meantime, HMRC say pay up now -> MontP appeal this
ii) HMRC continue to defer collection pending Supreme Court decision

Hoping for 1) a)...expecting 2) b) ii)...

I've added a 1c, and obviously there are further permutations involving PwC's case.

In the very unlikely event of 1b, we could always threaten to sue the authorities like prisoners did over the recent "right to vote" ruling.

Despite the bravado in Brannigan's newsletter a couple of years ago, HMRC would not dare ignore a ruling of incompatibitly by the courts.

[DonkeyRhubarb]

I feel the point regarding whether or not the structure was artificial needed to be addressed as whether we like it or not A1P1 allows wide margins and case history does show artificiality as an important consideration, regardless.

You hit the nail on the head SL.

Our case rests on how wide that margin of appreciation is.

Is it so wide that any tax law passed by Parliament automatically falls within it?

Or are there limits?

The main thrust of Elvin's argument this week was that the degree of retrospection in s58 way oversteps the mark of what could be considered proportionate.

If the court disagrees with this and rules that s58 does fall within the margin then it begs the obvious question:

Just how extreme would a tax law have to be to breach A1P1?

[sjw]

You hit the nail on the head SL.

Our case rests on how wide that margin of appreciation is.

Is it so wide that any tax law passed by Parliament automatically falls within it?

Or are there limits?

The main thrust of Elvin's argument this week was that the degree of retrospection in s58 way oversteps the mark of what could be considered proportionate.

If the court disagrees with this and rules that s58 does fall within the margin then it begs the obvious question:

Just how extreme would a tax law have to be to breach A1P1?

Now my advice for those that die
Declare the pennies on your eyes...