BN66 - Round 2 (Court of Appeal)

[nuffsaid]

Has anyone else received a letter from the HMRC which starts off:

Nine out of ten UK citizens pay their Self Assessment tax on time, funding the public services that we benefit from…… etc etc

And that my case has been transferred to a HMRC office in Croyden to pursue the debt.

I will be forwarding to MP to deal with.

I got this same letter last night. Sent it straight to MontP.
It was no suprise to me because I've had an amount showing as owed since May 2009 simply because Hector cocked up the 'on appeal' adjustments.
I've been chasing it since then and Tom has had a few goes at sorting it out, hopefully he'll drive it home this time.

[DonkeyRhubarb]

..and what also really puzzles me, is how the Padmore case wasn't even in the ballpark until 2008 and now seems the central axiom on which it all hinges. In 2002-2008 no-one even mentioned it .. or did they?

Neither Padmore nor the 1987 legislation was ever mentioned in any correspondence from HMRC prior to February 2008.

It wasn't even mentioned in the technical arguments they gave with the Closure Notices issued to the 4 test cases in March 2006.

Of course, none of this is surprising, since they only concocted the Padmore "clarification" in October 2007.

There is no way in a million years that HMRC would have gone to court claiming that Padmore applied to the scheme. It would be utterly absurd to try and argue, under the law, that a beneficiary of a trust was the same as a Partner.

[TAF4]

It would be utterly absurd to try and argue, under the law, that a beneficiary of a trust was the same as a Partner.

'IOM Resident Partner'

As always DR. You help keep us sane.

[TAF4]

....and another thing

It struck me as strange that Justice Parker absolutely seemed to 'get it' on day one of the JR. However, by the end of day 2 he had come round to the flimsy social policy stance put up by Hector.

What changed his mind?

It can't have been the well reasoned argument put up by the Hector Silk can it?

[poppy01]

It struck me as strange that Justice Parker absolutely seemed to 'get it' on day one of the JR. However, by the end of day 2 he had come round to the flimsy social policy stance put up by Hector.

What changed his mind?

It can't have been the well reasoned argument put up by the Hector Silk can it?

Looking into my crystal ball, I see a shimmer of ermine, and in the 2011 new years honours list, whats this...

'Lord Justice Parker'

quelle surprise!!!

[DonkeyRhubarb]

Padmore

I heard this from Montpelier re: Padmore.

================================================== ===

The Judge took the HMRC bait hook line and sinker in believing that as Padmore was retroactive nobody should have been surprised that s58 was also retroactive. That is a fundamental error and misunderstanding of Padmore by the Judge for the following reasons:

1. Pre padmore the general understanding of the law was that a UK resident partner of a foreign partnership could not avail of a DTA to exempt him from UK tax. That was not the case with s858. It was never the view of the tax profession pre s58 that the word partner in s858 had any meaning other than its legal meaning and it was never the view that Archer Shee worked in any other way than the House of Lords decided and HMRC applied it over three quarters of a century. Pre Padmore and pre s58 are therefore not at all comparable and the judge was wrong to so decide;

2. The retroactive impact of Padmore was very limited hence why in FOI requests HMRC can't identify ANYBODY who actually paid tax retroactively. Mr Padmore's DTR claim got through because of subsection 2 of s 62 FA 1987 which said retrospection was not to apply to a decision of a commissioner or court. But in practice as Norman Lamont admitted in Hansard all other UK partners of Mr Padmore had their DTA claims accepted and 3 OTHER taxpayers by concession. That was the extent of the DTR claims before HMRC at the time - Padmore and partners and 3 others;

The reality of the matter therefore is that NOBODY was actually affected in practice by the Padmore legislation. All that the legislation did was stop other UK partners in foreign partnerships from claiming DTR which they could do going back over 6 years. That is what Padmore was about and we know that from s1660 of the HMRC manual which says that Padmore was to prevent new claims going back over 6 years. That was the windfall the retrospection was designed to catch. It was not designed to catch genuine claims already submitted pre the Padmore case. Contrast s58 where we estimate that nationwide there were probably in excess of 40,000 separate DTR claims made to HMRC which were simply wiped away overnight.

In simple terms Padmore was designed to stop a windfall of claims back over 6 years from people who did not previously believe that they could make such claims but could jump on the Padmore bandwagon. It did not actually penalise anybody backwards.

[OnYourBikeGB]

It struck me as strange that Justice Parker absolutely seemed to 'get it' on day one of the JR. However, by the end of day 2 he had come round to the flimsy social policy stance put up by Hector.

What changed his mind?

It can't have been the well reasoned argument put up by the Hector Silk can it?

I think his mind was pretty set even before the hearing, we misread it. In the request fot the JR he made a remark that was something akin to 'How did your clients think they were going to get away with that' if I recall correctly. He only took a week to reject the JR, it would have taken that just to write down his opinions and check through. I believe that his view was already formed and he saw nothing to disprove it. He had after all since December when the technical arguments were presented. DR has produced some interesting points since then, make of them what you will re his background, but I think any neutral would be bewildered by how so much of what one side said could be accepted and so much of the other so thoroughly rejected.

I think we placed too much faith in the facts, and the obvious unfairness of HMRCs case. I believe his interpretation of the law was subject to his experiences and outlooks. When we get before three judges, we will have a better chance and one persons 'interpretation' won't hold so much sway.

[johnnyguitar]

I also thought that on day 1, the judge made the point. more than once, that Padmore was designed for a specific case in point and it was clear that it wasn't meant to have a wider, more general scope - or it wouldn't have been so specific in its language.
I was really convinced, by what he was saying, that he didn't believe we were caught under 'old' Padmore - therefore imply that the 'clarification' must have been a change.

[DonkeyRhubarb]

I was really convinced, by what he was saying, that he didn't believe we were caught under 'old' Padmore - therefore imply that the 'clarification' must have been a change.

He fell short of going quite that far.

Had he done so then it would have been tantamount to saying that Ministers had misled Parliament.

[moira under the stairs]

I got this same letter last night. Sent it straight to MontP.
It was no suprise to me because I've had an amount showing as owed since May 2009 simply because Hector cocked up the 'on appeal' adjustments.
I've been chasing it since then and Tom has had a few goes at sorting it out, hopefully he'll drive it home this time.

The word from Tom is "HMRC have not yet actioned the appeal"