BN66 - Round 2 (Court of Appeal)

[Toocan]

Is the State unbounded by the HRA?

Our case may hinge on the “wide margin of appreciation” that states have with regard to taxation matters. But note the words used. States have a “wide” margin of appreciation but not an unlimited remit. If the drafters of the Human Rights Act intended states to do what they wanted with taxation, then they would have said that. They didn’t.

It logically follows that there must be some limit on how wide the margin of appreciation is. The question may then be, how wide?

That calls in the specific circumstances of our case. In particular:

• The retrospection is for a very long period of time (8 – 20 – even 50 years depending on how it’s counted)

• That HMRC knew the scheme was possible and published it both on their public website (where they gave no indication that they might close it down – it appeared to be tacit acceptance – they knew it was going on but didn’t think it worth doing anything about) and internally through the Technical Exchange. They must also have known that the Technical Exchange was widely available out-with HMRC.

• Further, they knew the scheme was in active use for over a decade and that they accepted both nil-value and positive value claims from a number of individuals.

• Parliament did not consider the scheme that was in use (and possibly addressed by s.58) when they acted in 1987. It was not a clarificaiton.

Taken together, would it be legitimate to uphold the retrospection which imposes a new taxation burden years after the fact?

Set against this may be the concept that everyone should contribute to the taxation burden. The fact is, everyone on this scheme did. Very few people did not pay some income tax and National Insurance.

"Ah!", some might say, but you did not pay as much as you could have. Well … the rules allowed that arrangement. And let’s face it, tax is levied by the rule of law – not by a fantasy moral code made up 8 years after the fact.

[DonkeyRhubarb]

Excellent post Toocan.

This is what the European Court of Human Rights has said with respect to taxation.

Although the margin of appreciation available to the national legislature, particularly under Article 1 of Protocol No 1 is a wide one

(1) the measure imposed must have a legitimate aim in the sense of not being ‘manifestly without reasonable foundation’

(2) where the measure has a legitimate aim, there must be a reasonable relationship of proportionality between the means employed and the aim sought to be realised

(3) finally, a fair balance must be struck between the demands of the general interests of the community and the protection of the individual’s fundamental rights, the balance failing to be struck if the measure results in an individual or section of the public carrying an excessive burden.

Woolly or what!!!

[Ninja]

Weighing up the evidence

Being a higher court CoA judgements set legally binding precedent for the lower courts. It is therefore their obligation to ensure that their judgement is in no way contradictory to existing precedents and also to ensure that their judgement adds value to the relevant list of precedents in a clear and workable way so that it can add clarity (that word again) to the law.

Our case is definitely not an open and shut case. If it was we would have been declined the right of Appeal to the CoA in the first place. If the case comes in as a 3-0 loss and the content of the individual decisions is very one-sided it will be as good as enshrining acceptance of aggressive retrospection into the UK tax code. That is clearly unacceptable in a civilised society. We are still civilised are we?

However, if their judgement falls towards our cause the wording of their judgement could be such that they effectively outlaw retrospective tax raids for good. There are some circumstances where retrospection could be appropriate under a strict set of rules. The task that our case has set them is to recognise the extremes and to define the boundaries of acceptable and unacceptable retrospection in a way that is clear for all to see and understand and also in a way that does not give rise to unexpected consequences, especially a plethora of additional legal cases.

There is s broad spectrum here and ultimately they need to determine, in their opinion, where our situation exists within it. In any event that is a lot of research, much discussion and debate, and some very deliberately worded decisions. We know what we want them to say but I'm not sure from an impartial perspective that many of us would actually want to be in their shoes.

Emigre

Y'know I think that their lordships can quite easily reconcile whether retrospective law is acceptable or not, and that is to set the criteria of whether the retrospective law rights a wrong. And when I say 'wrong' I mean that it brings national law BACK into line with Human Rights law. Therefore, take War Crimes for example. Who would say it was wrong to retrospectively bring to justice war criminals? No one.
But retropsective tax law.....do me a favour.

[Morlock]

I now have the answer to this question from Tom at Montp. Apparently if there is a delay in the bloke from Stoke receiving the closure notices sent out from Middlesbrough, they go in to a strop
and demand the returns (which are what the closure notices are based on of course).

And they haven't even processed my appeal yet as it is in a backlog, so the bloke from Stoke won't have that either. That's if he ever gets, and understands what an appeal is, and assumimg the cretin can actually read.

Strange they get neither the CNs or the appeal but can threaten you with the heavy mob.

Actually it's not strange at all. This is the scum we are talking about.

I think I will demand an apology from the bloke in Stoke.

Tom told me Montp are getting a shed load of these letters. He said I can ignore it.

So an organisation called "HMRC Debt Management" are demanding money from you, and they haven't even got copies of either your Self Assessment Return or your Closure Notice? And they expect you to supply these? What a bunch of clowns!!

[RockTheBoat]

And the retro attack continues

Ad agencies hit out at back-tax claims on leaflets | Business

[DonkeyRhubarb]

A final thought before the weekend...

Like me, do you feel we have just been plain unlucky.

Let me explain what I mean.

Over the years many equally "artificial and aggressive" tax avoidance schemes have been closed down but none have been singled out for the extreme prejudice that has been heaped on us.

The previous Government and HMRC would have people believe that there was something exceptional about the DTA scheme but the fact is it is no different to the myriad of other schemes that have come and gone over the years.

So why were we targeted in this way?

Could it simply be a case of being in the wrong place at the wrong time?

• HMRC dragging their heels for 7 years, letting the scheme spiral out of control and looking to dig themselves out of a hole of their own making
• The final gasps of a bankrupt Labour Government which had been corrupted by power for over a decade

Is that it - fate decided by a roll of the dice?

If so, then this makes a complete mockery of any notion of fairness.

[OnYourBikeGB]

A final thought before the weekend...

Like me, do you feel we have just been plain unlucky.

Let me explain what I mean.

Over the years many equally "artificial and aggressive" tax avoidance schemes have been closed down but none have been singled out for the extreme prejudice that has been heaped on us.

The previous Government and HMRC would have people believe that there was something exceptional about the DTA scheme but the fact is it is no different to the myriad of other schemes that have come and gone over the years.

So why were we targeted in this way?

Could it simply be a case of being in the wrong place at the wrong time?

• HMRC dragging their heels for 7 years, letting the scheme spiral out of control and looking to dig themselves out of a hole of their own making
• The final gasps of a bankrupt Labour Government which had been corrupted by power for over a decade

Is that it - fate decided by a roll of the dice?

If so, then this makes a complete mockery of any notion of fairness.

I've always wondered if it's really MP that was the real target, tbh. By spiking them they were sending a message. We are just collateral damage. Seems to have worked too. It was very calculated, misleading ministers to get it out there in the first place, knowing that once enshrined in law, it would be difficult to remove. I'm not subscribing to any conspiracy theory, but I bet they were smiling from ear to ear when they got Parker. From their perspective, they have played this very well. No matter what we think of them, someone in there could have given Machiavelli lessons.

[moira under the stairs]

I've always wondered if it's really MP that was the real target, tbh. By spiking them they were sending a message. We are just collateral damage. Seems to have worked too. It was very calculated, misleading ministers to get it out there in the first place, knowing that once enshrined in law, it would be difficult to remove. I'm not subscribing to any conspiracy theory, but I bet they were smiling from ear to ear when they got Parker. From their perspective, they have played this very well. No matter what we think of them, someone in there could have given Machiavelli lessons.

I totally agree we seem to be the pawns in this, we just maybe happened to be going through the wrong company at the time, my choice I had the choice to go with other LEGAL TAX AVOIDANCE methods (get that Hector A.V.O.I.D.A.N.C.E) which indecently have been recently closed down with the past years written off, as DR indicated it maybe just down to the 'role of the dice' on this one,

Lets face it the then incumbent government’s intention was to send a message and use MP as a target, this government is just letting it take its course, they have nothing to lose, democracy... bollocks... we are just the little people.

Let’s face it we all know Hector has screwed up big time and are trying desperately to get themselves out of a hole... ironically at the expense of the Tax payer ...

[DonkeyRhubarb]

Imagine you are HMRC in late 2007.

You've been advised by Counsel that there is little prospect of defeating the scheme in the courts. Of course, you pretty much knew this right from the start as noted in Technical Exchange 63 published back in 2002.

You could take the gamble of going to court but £200M has already slipped through the net and the scheme would carry on costing the Exchequer while any legal action was in progress. You realise it's too late for this.

You could go to the Government and just ask them to close the loophole but then you'd have to explain to Ministers why you let it continue for all those years without challenging it.

And then Counsel comes up with a cunning plan and bingo all your problems are solved in one fell swoop. It's underhand, even by HMRC standards, and it's likely to attract fierce criticism but Labour will lap it up.

Wind forward a couple of years.

You were warned it might prompt a legal challenge but not to worry. Your hotshot human rights barrister says they haven't got a prayer.

In any case, in the very unlikely event it all goes tits up and the legislation has to be reversed, it will be blamed on the previous Government.

All the bases are covered.

Or are they?

[SantaClaus]

Just read this article.

"Michael Gove suffered an embarrassing defeat in the High Court yesterday over his decision to scrap much of the previous Government's school building programme."

Court defeat for Gove in school battle - Education News, Education - The Independent

Although unrelated to our case, it's heartening to see that the govt. can lose cases in the High Court.