BN66 - Round 2 (Court of Appeal)

[smalldog]

What is the advantage of this dragging on for 10 years through the European Courts? I'm sure we'd all like a timely solution, or am I missing something?

If it were to drag on for 10+ years and the interest became insane, do the courts have some power to say HMRC cannot claim the interest part as the legal process has added to the burden and cannot be justified?

What are the pros and cons either way?

for me if they came knocking tomorrow its down to the courts for a bankruptcy hearing, so for me the longer the better...The only means I had to pay would be selling my house, but as the property market has taken such a pounding that isnt an option anymore. I would still be left with a shortfall, hopefully in the future we will see growth which I would hope can out pace HMRC interest rates....If you have the means to pay now, then why dont you to get the monkey off your back, nothing to stop you paying all the CN's?

[TheBarCapBoyz]

The only way the case could be heard sooner in ECtHR is if the court accepts Steed's application which they filed in January 2009.

As far as I'm aware Steed have had no response to their application but, knowing what we know now about the huge backlog, this is probably not surprising.

Personally I don't see how ECtHR could look at this while there is an identical case being heard in the UK courts. My guess is either Steed's application will be thrown out altogether or it will be deferred until we have exhausted the legal avenues in this country (Court of Appeal, Supreme Court).

I think whichever way you look at it, 5 years seems very optimistic.

Question

The majority of people I speak to would be quite happy for the case to drag on for 10 years.

Is that the general consensus?

Reminds me of the Blackadder scene where he's facing the firing squad...

Leader of Firing Squad: So, look foreward to seeing you tomorow, sir. You'll have a blindfold
on of course, but you'll recognize me. I'm the one that says, "Ready,
aim, fire!"

Edmund: Can I ask you to leave a pause between the word "aim" and the word
"fire"? Thirty or forty years, perhaps?

[DonkeyRhubarb]

I'm sure we'd all like a timely solution, or am I missing something?

It depends whether the timely solution is WIN or LOSE.

If it's LOSE and you are facing bankruptcy/losing your home, then putting this moment off for as long as possible might be preferable!!!

As for the interest, that is not totally out of our control. People can start saving now and, over an extended period of time, inflation will eat into it the debt.

Even if you are lucky enough to be able to cover your liability now, you can benefit from it dragging on for years.

Example

You currently owe £100k tax + £50k interest.
Put £100k in a CTD. (This stops any further interest accruing).
Invest the £50k, and say you can get 3% net over the next 10 years.

That's £17k interest you get to keep even if we lose.

[SLB]

It depends whether the timely solution is WIN or LOSE.

If it's LOSE and you are facing bankruptcy/losing your home, then putting this moment off for as long as possible might be preferable!!!

As for the interest, that is not totally out of our control. People can start saving now and, over an extended period of time, inflation will eat into it the debt.

Even if you are lucky enough to be able to cover your liability now, you can benefit from it dragging on for years.

Example

You currently owe £100k tax + £50k interest.
Put £100k in a CTD. (This stops any further interest accruing).
Invest the £50k, and say you can get 3% net over the next 10 years.

That's £17k interest you get to keep even if we lose.

Yep, I get this, but for anyone with a CTD, the longer it goes on the less your money will be worth in real terms as 100k now will not be as much as 100k in 10+ years time.

The interest you earn on the money you put aside for interest e.g. 50k, minus the tax you'll pay on it, propbaly will not cover the depreciation of the CTD.

[ContractIn]

Yep, I get this, but for anyone with a CTD, the longer it goes on the less your money will be worth in real terms as 100k now will not be as much as 100k in 10+ years time.

The interest you earn on the money you put aside for interest e.g. 50k, minus the tax you'll pay on it, propbaly will not cover the depreciation of the CTD.

I personally would just like the whole thing concluded asap, win or lose. I feel for people who face bankruptcy, but don't believe it is in anyone's interest for this to drag on. Although this is looking highly likely.

Couple of concerns for me if it drags, interest rates are likely to go up during this time and second we are reliant on MontP still being around, which I'm sure they will be.

[DonkeyRhubarb]

Yep, I get this, but for anyone with a CTD, the longer it goes on the less your money will be worth in real terms as 100k now will not be as much as 100k in 10+ years time.

The interest you earn on the money you put aside for interest e.g. 50k, minus the tax you'll pay on it, propbaly will not cover the depreciation of the CTD.

Good point.

On the other hand, you wouldn't bother with a CTD if you were confident we were going to win since it earns bugger all interest. Taking out a CTD is virtually like writing the money off, and it's really just a more palatable alternative to paying on account.

[DonkeyRhubarb]

I personally would just like the whole thing concluded asap, win or lose. I feel for people who face bankruptcy, but don't believe it is in anyone's interest for this to drag on. Although this is looking highly likely.

I think it's not only highly likely but also unavoidable given what we're up against.

This is why I am cautioning against being overly optimistic about our chances in November.

Rooks Rider Solicitors

"The decision demonstrates the difficulty involved in persuading a court that the enactment of retrospective anti-avoidance legislation is a disproportionate response to tackling tax avoidance schemes, particularly when underlying public policy is clear."

[smalldog]

Good point.

On the other hand, you wouldn't bother with a CTD if you were confident we were going to win since it earns bugger all interest. Taking out a CTD is virtually like writing the money off, and it's really just a more palatable alternative to paying on account.

I agree, I think the CTD is a waste of money....if you have a CTD for £100k why not stick £50k in a high interest account and the other £50k into an investment trust...surely got to be better than letting it rot away with the government. I would suspect you to get a better return of interest if you balance your investment

[SantaClaus]

I agree with DR, the longer this case goes on, the better, especially for people facing bankruptcy.
Some of us may even be 6 feet under before we get a hearing

As a group, this is the most beneficial solution for the majority. And those who can afford the debt can simply invest the money in a higher yielding investment.

Three hurrahs for European bureaucracy

[Richard Splash]

Good point.

On the other hand, you wouldn't bother with a CTD if you were confident we were going to win since it earns bugger all interest. Taking out a CTD is virtually like writing the money off, and it's really just a more palatable alternative to paying on account.

I'm under the impression that there is interest paid because HMRC suggest you have to declare the interest on your tax return as income... un-ber-lieveable...leeches