BN66 - Round 2 (Court of Appeal)

[DonkeyRhubarb]

Anti Avoidance - Earnings paid through Trusts or other entities
The Government will be taking action to prevent attempts to avoid tax and National Insurance contributions through the use of Employee Benefit Trusts and other arrangements to disguise payments of remuneration and intends to introduce anti-avoidance legislation to take effect from 6 April 2011.

Talk about vague. And this is over a year away, so what's the point of pre-announcing it now?

[Cosmo]

Talk about vague. And this is over a year away, so what's the point of pre-announcing it now?

Presumably so it gives them time to think up of some random piece of legislation to "clarify" to enable them to then make it "retrospective", which is really what they meant to do all along.

[Emigre]

Talk about vague. And this is over a year away, so what's the point of pre-announcing it now?

Perhaps they are publishing a relief

Unbelievably short on any detail whatsoever. Under the anti-avoidance measures its even difficult to identify what they might refer to, so vague in fact that it is doubtful that it could constitute forewarning.

Drafting quality under NL has clearly hit yet another new level. Does look like they are going to be busy this year though

[Tax_shouldnt_be_taxing]

Budget Summary

So what spending Darling is planning will come from tax on bankers bonuses and closing tax loopholes. Very fair! How long did it take him to think that one up?

[DonkeyRhubarb]

Budget - off topic

Tobacco Products Duty: Long cigarettes

The way long cigarettes are treated for duty purposes is to be changed. Where cigarettes are longer than 8cm (excluding tip), each additional 3cm (or part thereof) is treated as another cigarette for duty purposes. For example a cigarette 12cm in length would be treated as three cigarettes. This is a technical change which is designed to stop a tax avoidance method.

[PlaneSailing]

Talk about vague. And this is over a year away, so what's the point of pre-announcing it now?

Ah, I misread this after a long lunch. I thought this applied from 5 April 2010!

So he's given EBT scheme users a year to plan their tax affairs. How is
this fair?

I've no experience in EBT schemes, but do they offer a way to avoid
'abusive' amounts of tax and NI?

And if they offer any sort of advantage, should I open one for a
year in the knowledge that I'm safe from the long hand of the Treasury?

[ASB]

The man’s tax inspector wrote back, indicating that his offer would be accepted ‘without prejudice to any penalty determination which may follow hereafter’ and the taxpayer considered that once he had paid the agreed sum, that would be the end of the matter. However, a 70 per cent penalty notice (£54,000) followed, which was towards the upper end of the scale of penalties which are normally levied.

Of course he lost. I can't see there was any possible other outcome!

HMIT had clearly said without prejudice to penalty determination and - as far as I can see he said "well OK then".

The taxman does not appear to have gone back on any agreement whatsoever. It seems the taxpayer simply didn't understand what they;d agreed to.

Of course there may be more to it than that, but that's what your summary say.

[DonkeyRhubarb]

Clarification vs. change

I have been thinking about what travellingknob was saying earlier and it brought it home to me how crucial this point is.

If BN66 is a change in the law then how can it be right or fair for it to be retrospective when other schemes are still being closed prospectively?

It's only the "clarification" smokescreen which allows HMRC/Government to single out the DTA scheme for special treatment, whilst continuing to deal with other schemes in the same way as they always have. Otherwise, BN66 would be seen as an arbitrary and unjustified attack on one group of taxpayers.

All the things Justice Parker said about the DTA scheme (artificiality, no commercial purpose, 3% tax) can equally be levelled at just about every other tax planning arrangement past or present.

So the question is:

Was it a clarification or a change?

[Tax_shouldnt_be_taxing]

Fair Share

Laim Bryne confirmed that 60% of the spend from the budget will be paid for by the top 5% of taxpayers. Yet when you look at what it pays for, it won't benefit them in the slightest. I can't see what is fair about that. Yet another example of how the top few percent are paying to prop up the rest of the country but are still the focus of attack for how they manage their finances.

It would be no bad thing if the top 5% shipped out and left the rest to fend for themselves.

[Tax_shouldnt_be_taxing]

I have been thinking about what travellingknob was saying earlier and it brought it home to me how crucial this point is.

If BN66 is a change in the law then how can it be right or fair for it to be retrospective when other schemes are still being closed prospectively?

It's only the "clarification" smokescreen which allows HMRC/Government to single out the DTA scheme for special treatment, whilst continuing to deal with other schemes in the same way as they always have. Otherwise, BN66 would be seen as an arbitrary and unjustified attack on one group of taxpayers.

All the things Justice Parker said about the DTA scheme (artificiality, no commercial purpose, 3% tax) can equally be levelled at just about every other tax planning arrangement past or present.

So the question is:

Was it a clarification or a change?

DR, I think an important point here is whether it is possible to clarify something in the present so that it applies to the past. If you could, then it suggests that there was no lack of clarity before clarity was stated. Clarification can only apply when confusion or uncertainty have been determined and I cannot see how it can be argued that a known confusion was alowed to exist for 8 years (at least) without proper action.