BN66 - Round 2 (Court of Appeal)

[BolshieBastard]

I dont think any of this is because MP were targetted as some think.

IMO, its purely and simply because we beat the system. In much the same way that crims who beat the establishment get tougher sentences than murders etc, so we get the full force of the establishment for beating them with the DTA 'loophole.'

[Toocan]

I dont think any of this is because MP were targetted as some think.

IMO, its purely and simply because we beat the system. In much the same way that crims who beat the establishment get tougher sentences than murders etc, so we get the full force of the establishment for beating them with the DTA 'loophole.'

Every avoidance scheme that works "beats the establishment system" - yet very very few are closed retrospectively. Where they are closed retrospectively, it tends to be for a very short period of time. s.58 is exceptional in that way.

I *do* believe there is evidence that HMRC are targetting Montpelier in particular - look at the language they used to describe some of the other scheme that Montpelier run - and look at HMRC's recent actions. Actions which were found in court to be against the law.

For whatever reason, this has became personal between HMRC and the head of Montpelier.

The only reason that HMRC managed to get s.58 into law was because we had the runt of a bankrupt government at the end of its days trying to find cash from whereever they could. Ask yourself this, if s.58 was presented to Parliament today - do you think it would be voted into law? No chance at all.

[DonkeyRhubarb]

The only reason that HMRC managed to get s.58 into law was because we had the runt of a bankrupt government at the end of its days trying to find cash from whereever they could. Ask yourself this, if s.58 was presented to Parliament today - do you think it would be voted into law? No chance at all.

That's what makes it unfair, and I use the word in it's true sense not the way it's been perverted by politicians.

Toocan uses the word "chance" and that's what it came down to. We were just unlucky/unfortunate to be in the one scheme that was singled out. A case of being in the wrong place at the wrong time.

What makes me so sad is, if we can't get it overturned, some people will pay a very high price indeed.

[DonkeyRhubarb]

There are a couple things that really worry me which I haven't mentioned before now.

I know this anecdotally from people I've contacted but I also have it on good authority from elsewhere. It probably also explains why the forum doesn't attract the following you might expect given that it can be found through a simple search in Google.

(1) A majority of people affected by BN66 are in denial. They have buried their heads in the sand and don't even want to think about the ramifications if we lose, let alone discuss it with anyone.

(2) Many guys haven't even told their partners or families about it.

Not good...

[slogger]

There are a couple things that really worry me which I haven't mentioned before now.

I know this anecdotally from people I've contacted but I also have it on good authority from elsewhere. It probably also explains why the forum doesn't attract the following you might expect given that it can be found through a simple search in Google.

(1) A majority of people affected by BN66 are in denial. They have buried their heads in the sand and don't even want to think about the ramifications if we lose, let alone discuss it with anyone.

(2) Many guys haven't even told their partners or families about it.

Not good...

.. have a few friends like that -- however they owe so much it just cannot be repaid in whole - they would lose everything they have and then some...we dont even chat about it between ourselves as they would stress so much -In their cases probably a good idea to forget about it until something has to be done - can understand their attitude as I've probably spent too much time thinking/worrying about it !! They are continuing in schemes e.g. ebt etc as their attitude is that they cant lose any more than they already will if hmrc get away with this!

[DonkeyRhubarb]

.. have a few friends like that -- however they owe so much it just cannot be repaid in whole - they would lose everything they have and then some...we dont even chat about it between ourselves as they would stress so much -In their cases probably a good idea to forget about it until something has to be done - can understand their attitude as I've probably spent too much time thinking/worrying about it !! They are continuing in schemes e.g. ebt etc as their attitude is that they cant lose any more than they already will if hmrc get away with this!

Yes I can perfectly understand their attitude. I'd probably feel the same way if I was in their position. As the saying goes, there's no point worrying about something you can't do anything about.

Personally I wouldn't keep it from the missus but it doesn't surprise me that some guys have.

It makes you wonder what the real fallout is going to be if we can't get this crap overturned.

[DonkeyRhubarb]

Question for Alan Jones

(assuming he's still around)

Someone has asked me to pose the following question to you.

When you were negotiating the Suo Motu settlement towards the end of 2002, were you aware of Technical Exchange 63 which HMRC had published on 31st July 2002?

http://www.whatdotheyknow.com/reques...Issue%2063.pdf

Your clients may have felt differently about settling had they been aware of HMRC's true position on the scheme ie. that they didn't know how to challenge it.

PS.

I think this demonstrates once again how institutionally dishonest HMRC are.

[Tax_shouldnt_be_taxing]

A1P1: Wide margin of appreciation versus Legitimate Expectation

Whilst we wait for the CoA ruling, I thought is was worth distilling a couple of key decisions that the CoA may deliberate on. A close reading of the above shows the following to be considered in context of A1P1:

1. The State enjoys a "wide margin of appreciation" on such matters of tax collection.
2. The Courts are not inclined to interfer with the State on such matters
3. There are checks and balances to such lack of interference available to the Courts
4. Legitimate Expectation (LE) is the primary check and balance against "wide".

Whilst I Park (er hum) the well trodden path of the diabolical maladministration of HMRC over the years before BN66, it is worth noting the challenge we face on the above 4 points. But in the case of point 4 that was not ruled upon in context at the HC there are some considerations in our favour:

There is a case for LE where a quasi-contractual assurance on a small stage addressed to a small number of beneficiaries gives a court reason to allow substantive LE. I would take that as the Test Cases that never were.

There is also the consideration of LE in terms of statute versus case law. In the former, it can be accepted that HMRC had a hand in the law making so one can reasonably expect HMRC to have a clear understanding of what that legislation means. Or that one can reasonably accept that HMRC knew what they meant in Padmore.

Now consider these points in terms of LE and BN66.

1. Padmore to which BN66 was been retrofitted specifically under statute ensured that no retrospective taxes were paid. IR documents confirm that it would not be acceptable to penalise. We have been.
2. Test cases were lined up by HMRC. A quasi-contract of agreement that was never implemented.

So in terms of LE, one can have reasonable or substantive grounds to believe that future actions of HMRC would follow those they actioned in Padmore (consistency). That the Commissioners was where we were headed (not least as HMRC Guidlines imply this).

On the basis of this, I would say there was a good LE case that has yet to be ruled upon. So whilst the wide margin may be very wide and courts are not inclined to interfer, they must consider LE. The wording of the ruling when it comes may end up being as (if not) more significant than the win / lose.

[Slobbo]

There are a couple things that really worry me which I haven't mentioned before now.

I know this anecdotally from people I've contacted but I also have it on good authority from elsewhere. It probably also explains why the forum doesn't attract the following you might expect given that it can be found through a simple search in Google.

(1) A majority of people affected by BN66 are in denial. They have buried their heads in the sand and don't even want to think about the ramifications if we lose, let alone discuss it with anyone.

(2) Many guys haven't even told their partners or families about it.

Not good...

I told my partner early on but it did take me couple of weeks to get the courage up. Was a double dose of misery for me as I had been out of work for a few months with nothing on the horizon as it was just when the recession hit. Very low point in my life. I am an optimist by nature but my wife the opposite so I knew that telling her would really make her miserable. I feel like I have bought this misery upon us even though I believed it was a safer bet than the uncertainty of IR35. She has been a great support for me and me for her (I hope). Was right to tell her.

[DonkeyRhubarb]

I told my partner early on but it did take me couple of weeks to get the courage up. Was a double dose of misery for me as I had been out of work for a few months with nothing on the horizon as it was just when the recession hit. Very low point in my life. I am an optimist by nature but my wife the opposite so I knew that telling her would really make her miserable. I feel like I have bought this misery upon us even though I believed it was a safer bet than the uncertainty of IR35. She has been a great support for me and me for her (I hope). Was right to tell her.

I spoke to a guy recently who hasn't told his wife. He wanted to tell her at the beginning but kept putting it off. Eventually it just got to a point where it seemed too late to say anything.

He is truly praying that she never needs to find out because he knows they'll lose the house.

I can't begin to imagine what it's like living with that hanging over you. The defeat in the High Court affected him very badly.