BN66 - Round 2 (Court of Appeal)

[smalldog]

Who knows what it means in their minds.

If I had to pin it down, I'd say it refers to using a tax avoidance measure, but to deliberately manipulate/hide certain facts so that it appears you are legal committing tax avoidance. In reality, the intentional manipulation essentially makes it a fraud, which means it's tax evasion, not avoidance.

Taking out 1 full ISA per year is avoidance - going to another bank and taking out another one without telling them you've used your allocation is fraudulent avoidance.

Doesn't apply to BN66 - you didn't manipulate any facts - it's just an argument on the point of law - avoidance, not evasion.

I read that as MP were selling a scheme labelled as avoidance but it is in fact evasion in HMRC's view.

[SantaClaus]

Indeed. If HMRC have misled the IOM courts, then the whole of island's financial dealings must seem substantially less secure to any company using it for tax purposes. HMRC must have been pretty convincing or forceful, but if they have basically slandered a large tax advisor, the type of service supplier the island's wealth depends on, there will be a lot of big legal guns lining up. It's difficult to see how this could be let go. Either they stand up to the bully boys, or they and their economy will be trod on. I wonder if this is the start of more aggressive action by HMRC against the IOM in general.

I agree with you OnYourBikeGB. The island's entire economy depends on companies such as Montpelier.
I think HMRC may have picked the wrong fight this time.

[Clownfish]

Hi Clownfish,
I'm not sure I follow you. Have you paid your tax demand in full, or have you bought a Certificate of Tax Deposit. Or have you done something else entirely, eg an investment of some kind?

Hi Morlock,

Well, what I meant is its now out of my "daily" view, and I'm considring any savings/investments on that side of the world is now "gone".

I've got it split, some is an investment that is very liquid in the UK, and the other half I'm still contemplating what to do with. Given I'm not a uk resident, I suppose the two options Im weighing up are: offshore savings account, and a CTD.

Im leaning to the offshore savings, as its much less of a headache, given HRMCs websh1te states tax is not deducted at source of interest accrued on a CTD, so, its a bit unclear if I would then need to start to file additional retruns once I get a CTD. The CTD does appeal to me though, as its all a bit more "final" in terms of, its all sealed and done worst case scenario.

If anyone has any other advice, other than putting it all on red(which has been seriously considered), it would be appreciated.

Or, if there is anyhting particular about a non-uk resident that I've perhaps missed...

Clownfish

[Fundamental Rights]

Indeed. If HMRC have misled the IOM courts, then the whole of island's financial dealings must seem substantially less secure to any company using it for tax purposes. HMRC must have been pretty convincing or forceful, but if they have basically slandered a large tax advisor, the type of service supplier the island's wealth depends on, there will be a lot of big legal guns lining up. It's difficult to see how this could be let go. Either they stand up to the bully boys, or they and their economy will be trod on. I wonder if this is the start of more aggressive action by HMRC against the IOM in general.

Let's focus on 1) it has nothing to do with BN66 2) it sounds like a "fishing exercise" by HMRC - if so it will be challenged as unlawful 3) HMRC may well have compromised any forthcoming hearings (including BN66) - the lawyers will have a field day on this.

There is probably little point in further exchange on this blog on this issue. In contrast to HMRC, lets leave this to the due process ..... and await the outcome with interest.

[DonkeyRhubarb]

I read that as MP were selling a scheme labelled as avoidance but it is in fact evasion in HMRC's view.

I don't think this is the case. There are about 4 schemes under the spotlight. One is already being argued in the Tax Courts. Another was closed, and people advised to settle, after KPMG lost a case in the appeal court. It all sounds like bog standard tax planning to me.

My suspicion is that HMRC have embellished the fraud allegations so that they could get the IoM Courts, under the bilateral agreement, to issue search warrants for Montp's IoM head office. Everything that was taken in the raids (including computer servers) is currently held by the authorities in the IoM while Montp challenge the legality of the seizures.

There are other details about this incident which make me suspect that HMRC have turned this into a vendetta against Montp, and I'm sure it's no accident that CoA hearing is less than 4 weeks away.

[smalldog]

I don't think this is the case. There are about 4 schemes under the spotlight. One is already being argued in the Tax Courts. Another was closed, and people advised to settle, after KPMG lost a case in the appeal court. It all sounds like bog standard tax planning to me.

My suspicion is that HMRC have embellished the fraud allegations so that they could get the IoM Courts, under the bilateral agreement, to issue search warrants for Montp's IoM head office. Everything that was taken in the raids (including computer servers) is currently held by the authorities in the IoM while Montp challenge the legality of the seizures.

There are other details about this incident which make me suspect that HMRC have turned this into a vendetta against Montp, and I'm sure it's no accident that CoA hearing is less than 4 weeks away.

Im actually quite encouraged if it is pure and simple to disrupt proceedings. That implies HMRC think we have a good case/chance and want to do whatever possible to derail it. If they thought we had no hope there would be no point in spending PRECIOUS police resources and court time as they would win regardless. Be great if its all unfounded and IOM sent HMRC a bill for the cost of the raid etc....

[DonkeyRhubarb]

Im actually quite encouraged if it is pure and simple to disrupt proceedings. That implies HMRC think we have a good case/chance and want to do whatever possible to derail it. If they thought we had no hope there would be no point in spending PRECIOUS police resources and court time as they would win regardless. Be great if its all unfounded and IOM sent HMRC a bill for the cost of the raid etc....

I'm sure there are a lot of businesses in the IoM who are watching this with keen interest.

Bending over backwards for HMRC is not what you want from a tax haven.

By taking it up the arse from Hector, the IoM authorities may have also shot themselves in the foot.

[Morlock]

Hi Morlock,

Well, what I meant is its now out of my "daily" view, and I'm considring any savings/investments on that side of the world is now "gone".

I've got it split, some is an investment that is very liquid in the UK, and the other half I'm still contemplating what to do with. Given I'm not a uk resident, I suppose the two options Im weighing up are: offshore savings account, and a CTD.

Im leaning to the offshore savings, as its much less of a headache, given HRMCs websh1te states tax is not deducted at source of interest accrued on a CTD, so, its a bit unclear if I would then need to start to file additional retruns once I get a CTD. The CTD does appeal to me though, as its all a bit more "final" in terms of, its all sealed and done worst case scenario.

If anyone has any other advice, other than putting it all on red(which has been seriously considered), it would be appreciated.

Or, if there is anyhting particular about a non-uk resident that I've perhaps missed...

Clownfish

So you haven't really done anything concrete, you've just changed your outlook - i.e. are assuming the worst case. Fair enough, if it helps you sleep better at night. Personally, I'm determined to fight this all the way.

[DonkeyRhubarb]

Police raid Douglas tax consultancy firm premises - Isle of Man Today

'HMRC would like to thank the Isle of Man authorities for their co-operation and assistance in this enquiry.'

or

Thanks for letting us take you up the arse.

[Vallah]

Police raid Douglas tax consultancy firm premises - Isle of Man Today

'HMRC would like to thank the Isle of Man authorities for their co-operation and assistance in this enquiry.'

or

Thanks for letting us take you up the arse.

On the face of it that's what it sounds like.