BN66 - Round 2 (Court of Appeal)

[screwthis]

[dripping with irony]

i suppose we can take comfort from the fact that, under the new protocol, what has befallen us is extremely unlikely to ever happen again to anyone else.

We were just unlucky to be standing where the lightning struck.

But perhaps all has not been in vain if our sacrifice has been a catalyst for change.

[/dripping with irony]

<bollocks>
bn66
</bollocks>

[reckless]

FA2011 Protocol

[DRIPPING WITH IRONY]

I suppose we can take comfort from the fact that, under the new Protocol, what has befallen us is extremely unlikely to ever happen again to anyone else.

We were just unlucky to be standing where the lightning struck.

But perhaps all has not been in vain if our sacrifice has been a catalyst for change.

[/DRIPPING WITH IRONY]

IF the recently published Tax Avoidance protocol had been in place (especially with reference to box 4A) then we probably wouldn't be in the current pickle we find ourselves in. However, think about this - why should the recently published HMRC Protocol on Tax Avoidance not actually apply to our case too? I think that the HMRC have inadvertently got themselves into a catch 22 situation. If tax avoidance legislation can be retrospective, then so too should the application of their new published protocol on tax avoidance. If that protocol can not be made retrospective, then neither should any other tax avoidance legislation/guidance such as BN66!
Is there a flaw in my reasoning here?

[Emigre]

IF the recently published Tax Avoidance protocol had been in place (especially with reference to box 4A) then we probably wouldn't be in the current pickle we find ourselves in. However, think about this - why should the recently published HMRC Protocol on Tax Avoidance not actually apply to our case too? I think that the HMRC have inadvertently got themselves into a catch 22 situation. If tax avoidance legislation can be retrospective, then so too should the application of their new published protocol on tax avoidance. If that protocol can not be made retrospective, then neither should any other tax avoidance legislation/guidance such as BN66!
Is there a flaw in my reasoning here?

No flaw in your reasoning by my reckoning. Parliament used to apply the Rees Rules with regard to retrospection but the Treasury Ministers in the last Govt deceived Parliament into setting aside those rules in order to ram BN66 and S58 into the legislature. The draft Protocol announced by Osborne with respect to retrospection is consistent with the principle of the Rees Rules. If the Rees Rules represented the intent of parliament then that intent has been endorsed by the new Protocol.

So where does that leave us? Clearly our treatment would then be beyond any legitimate expectation since for Parliamentary intent to be seen to fluctuate between Rees, S58 and back to the new Protocol would represent everything in terms of uncertainty that Osborne is attempting to convince the investing world that the UK isn't.

I find myself fortified by the issue of the Protocol. Its a personal opinion, but for the courts to find in favour of HMRC now would drive a serious wedge into Osborne's claim for tax certainty, and would be without doubt contra to the current intent at least of the current Government.

[smalldog]

my only word of caution being they do state setting a date in the past is wholly exceptional and they could consider our case to be such an exception.

[Morlock]

my only word of caution being they do state setting a date in the past is wholly exceptional and they could consider our case to be such an exception.

I don't see how "clarification" of existing rules, or a change of opinion or strategy on HMRC's part could be construed as an exceptional circumstance. Surely, for "exceptional circumstances" to apply there should at least have been the discovery of some new (previously-concealed or unknown) information.

[swede]

I don't see how "clarification" of existing rules, or a change of opinion or strategy on HMRC's part could be construed as an exceptional circumstance. Surely, for "exceptional circumstances" to apply there should at least have been the discovery of some new (previously-concealed or unknown) information.

indeed - rather than just realising they had been twats.

[DonkeyRhubarb]

I don't see how "clarification" of existing rules, or a change of opinion or strategy on HMRC's part could be construed as an exceptional circumstance. Surely, for "exceptional circumstances" to apply there should at least have been the discovery of some new (previously-concealed or unknown) information.

And the Protocol makes that absolutely clear:

"a change in HMRC’s interpretation of the law (unless prompted by a Court ruling) will not be regarded as ‘significant new information’ in the terms of the Protocol"

In our case, the only thing that changed between 2001 and 2008 was HMRC's opinion, and they didn't even form this new opinion until Autumn 2007 when it was suggested to them by Tax Counsel.

All the information about the scheme was known to them way back in 2002 when they published Technical Exchange 63.

There was nothing exceptional about our case that justified a backdating of the law.

[OnYourBikeGB]

And the Protocol makes that absolutely clear:

"a change in HMRC’s interpretation of the law (unless prompted by a Court ruling) will not be regarded as ‘significant new information’ in the terms of the Protocol"

In our case, the only thing that changed between 2001 and 2008 was HMRC's opinion, and they didn't even form this new opinion until Autumn 2007 when it was suggested to them by Tax Counsel.

All the information about the scheme was known to them way back in 2002 when they published Technical Exchange 63.

There was nothing exceptional about our case that justified a backdating of the law.

I wonder were the judges told to put their decision on the backburner until the budget came out.

[OnYourBikeGB]

There was an interesting debate on Radio 5 Live this morning around avoidance / evasion following the weekend riots. I was surprised to hear that there does seem to be a growing resentment against the violence where legal avoidance has been used. ISAs, pensions etc etc were all dragged up as being avoidance. It made me wonder what the reaction would be if we lost. How is it going to look if the Government have allowed 2000 ordinary people to lose their homes and go bankrupt, while at the same time not being prepared to act against large companies retrospectively? I think HMRC have made a big rod to beat themselves with. This may drive a big wedge between the Government and their HMRC masters.

[DonkeyRhubarb]

There may be some, even in HMRC, who wish this would just go away since it is completely at odds with Government policy.