BN66 - Round 2 (Court of Appeal)

[SantaClaus]

True, but then it was (we think), their estimate, not ours, that we'd hear before Christmas. And they should know their own schedules. I'm taking the delay as a positive thing, but who knows other than them?

On a slightly different note, I see the slimy, two-faced, incompetent hypocrite Vince Cable has called the Tories ruthless and calculating. Must feel terrible when you think you can rely on someone and then they shaft you, eh Vince?

What comes around goes around as they say. One day, HMRC will get what they deserve too.

[VictorValiant]

Current Status

With our Learned Friends still cogitating and much being made of the possibility that they are concerned with "not setting a precedent" in their final decision then surely this would mean a gut consensus against our views rather than in favour? The intention to come up with wording or Ts & Cs to avoid establishing a baseline or datum for future judgements would be more relevant in the case of leaning towards HMRC rather than in our favour. Any judgement for ourselves - due to the specific nature of the scheme - would be unlikely to set any future precedent as far as I can see - apart from in a very broadbrush manner.

[centurian]

Yep - if they intend to come down on the side of HMRC, the risk of setting a precedent is much higher.

But we have no idea if that is what the delay is all about

[Toocan]

Yep - if they intend to come down on the side of HMRC, the risk of setting a precedent is much higher.

But we have no idea if that is what the delay is all about

I believe that the judges will be putting a lot of thought into the “wide margin of appreciation” that states have with respect to taxation law. The retrospection of s.58 is so extreme that if the judges find in HMRC’s favour, then that part of the Human Rights Act would have no effect. In other words states could do whatever they liked with respect to taxation.

But that’s not what the HRA says. So they may be decided how far that margin extends.

The scheme did work. HMRC knew all about the scheme. They were warned that the scheme would work when they enacted Padmore. Then, when the Padmore legislation was moved into a new Act, they watered it down because it was too wide.

So they knew it didn’t catch a scheme like this, they knew the scheme was being used. They did not only have the chance to close it in each Finance Act, but in fact amended the very legislation which would eventually be used as the excuse to close it retrospectively.

That’s a little like saying that Income Tax was really meant to be 60% for everyone, for the last 8 years, and you all have to pay up retrospectively with interest. Would that be within the “wide margin of appreciation”?

I don’t think so.

[orientalist]

Yep - if they intend to come down on the side of HMRC, the risk of setting a precedent is much higher.

I See it differently, we lost in the first court, we are appealing that decision, the precedent is effectively already with HMRC as a result, I see this as encouraging as;

If it is taking so long to validate that position it must be marginal at best, so stands an excellent chance in a higher court

or

They are about to hand down a judgement that goes against HMRC and shows their lower court colleagues in a bad light......I'd want to dot all I's in this case wouldn't you?

[DonkeyRhubarb]

I believe that the judges will be putting a lot of thought into the “wide margin of appreciation” that states have with respect to taxation law. The retrospection of s.58 is so extreme that if the judges find in HMRC’s favour, then that part of the Human Rights Act would have no effect. In other words states could do whatever they liked with respect to taxation.

I suppose they could say that the HRA doesn't apply to tax avoidance but even that would be a huge step.

It would mean that there would be no reason for HMRC to ever challenge an arrangement in court again, since everything could be dealt with retrospectively.

[smalldog]

I suppose they could say that the HRA doesn't apply to tax avoidance but even that would be a huge step.

It would mean that there would be no reason for HMRC to ever challenge an arrangement in court again, since everything could be dealt with retrospectively.

DR, thats a scarey thought. Maybe there is no mallice on HMRC's part against us, maybe this is part of a grander plan and is a test case for them to test the water and see if they can get away with retrospection. As you say if they can get this through it opens the flood gates and they can just retrospect whenever they please without question.

[DonkeyRhubarb]

DR, thats a scarey thought. Maybe there is no mallice on HMRC's part against us, maybe this is part of a grander plan and is a test case for them to test the water and see if they can get away with retrospection. As you say if they can get this through it opens the flood gates and they can just retrospect whenever they please without question.

HMRC would still have to get retrospective legislation passed by Parliament. I'm not sure the Tories would agree to this but the LibDems might.

And if Labour ever got in again...

[eazy]

Deal offered for EBT enquiries

Deal offered for EBT enquiriesHMRC offers EBT settlement opportunity

Just before Easter, HMRC made a public offer to companies to settle outstanding claims for tax and NICs on disguised remuneration provided through Employment Benefit Trusts (EBTs).

A new Schedule in the Finance (No. 3) Bill 2011 will treat loans, money or other assets held in trust but linked to an individual’s as PAYE income. HMRC also plans to bring forward a similar treatment for NICs. The regime came into effect on 6 April 2011, but will apply in some cases dating back to 9 December 2010.

But the legislation also contains a provision to set a credit against any s7A charges where there has been a settlement, and this provides the basis for HMRC’s amnesty offer.

HMRC will write to all employers or companies with current EBT enquiries inviting them to discuss settlements. The department says there is no deadline for the incentive, but if employers or companies do not respond by 31 December 2011, it will assume they are not interested in any deals and will proceed with formal enquiries.

HMRC permanent secretary for tax Dave Hartnett explained: “This initiative reflects HMRC’s determination to seek to resolve disputes without going to litigation where that can be done without detriment to the Exchequer and within the clear boundaries of the law. HMRC’s pro-active approach to customers gives them the opportunity to discuss their cases with us and work in partnership to establish how the facts of their case fit within the proposals.”

HMRC’s campaign against disguised remuneration is designed to prevent tax losses from arrangements for dealing with large City bonuses and offshore payments to footballers - as seen in the current tax tribunal hearing involving Glasgow Rangers FC. But advisers have expressed concern that the new schedule is too widely drawn.

With uncertainty hanging in the air about which arrangements will be caught and which won’t, some critics are advising companies to treat HMRC’s latest offer with caution.

In IFA Online, Society of Trust and Estate Practitioners chief executive David Harvey warned that the legislation still does not provide clarity for employers who operate EBTs, and even though the amnesty offer remains on the table until the end of 2011, companies will not have enough time to work out if their offshore arrangement will be liable.

Solicitor Peter Vaines commented: “Whilst one understands that HMRC regard EBTs with great hostility, and they have no wish to afford any generosity to those involved, this statement does not seem to offer much by way of incentive to unravel the arrangements.”

[SantaClaus]

HMRC would still have to get retrospective legislation passed by Parliament. I'm not sure the Tories would agree to this but the LibDems might.

And if Labour ever got in again...

The Tories want to remove us from Europe altogether, which could be worse as our case hinges on the human rights act.

As far as I'm concerned, they are all a bunch of spineless (insert favourite word here).