BN66 - Round 2 (Court of Appeal)

[DonkeyRhubarb]

I think we should let things run their course. All this talk of "I'll chip in", is great.. but not right now. Montpelier are the ones who are paying for our fight for now. Lets not give them the idea that "ah well ok... lets throw the towel in and these contractors can have a whip round to continue the legal fight". Stand your ground.

Absolutely. They committed to defend the scheme up to the HoL (Supreme Court) and we should certainly expect nothing less.

There is a message here to HMRC though.

The Huitson case isn't wholly dependent on Montpelier.

[theywontbreakme]

Montpelier client checking in

Hi all, I've spent the last two days (and nights) reading the BN66 threads. No mean feat with the number of posts! I feel for all of you and commend you for your resilience in dealing with this.

My husband and I are clients of Montpelier and we had the pleasure of a delightful christmas communication from the special investigations unit at HMRC earlier this week. Basically, the letter says...

We do not agree your tax return of 2007/08.
We are investigating Montpelier for criminal activities
We are making civil enquiries into your tax return
You may wish to withdraw your return for that year and settle your tax liability

The letter makes no reference to being cop8 or 9 and doesn't give much information other than that above. We have spoken several times since then to our accountants in the Manchester office and they insist that the scheme will be robustly defended.

They seemed to confirm that the raid on the I-o-M office was in relation to the scheme we used, but they did say that all documents were still being held back from hmrc/police. They are in dialogue with hmrc with regards to the technicalities of the scheme for now, and are answering all their questions.

Our exposure is six figures; Montpelier has given us a complete breakdown, but we may be amongst the lucky ones in that we may be able to cover the amount by taking the equity from our home, so we intend to do that (if we can) and buy a CTD to cover our potential liability. We're just left with the interest then and potential penalties. This just means that our medium and long term future is potentially ruined but that in the short term we should be just about ok. All good there then.

We can't find anything definitive about penalties so this is what is now causing me the greatest concern, because if they were to go for 100%, then we'd be ruined.

Is this what you get for working 20 hour days, neglecting your family, working yourself into the ground and taking part in what was sold to us as a genuine, above board, transparent and completely legitimate tax mitigation scheme? I am so angry.

Montpelier seem reluctant to discuss the penalties situation with us so I was wondering what was it about your case that meant penalties weren't deemed to be appropriate?

We have decided to just sit tight for now and see what hmrc do next. We're more than aware that this could take years and I worry about the toll this will take on our family. I'm hoping to sleep sometime in the future before the bags under my eyes turn into suitcases. I may need to start self medicating though if I don't get some sleep soon.

Merry christmas my hmrc friends. Your timing has been impeccable.

Good luck to everyone awaiting the outcome of the appeal. I have everything crossed.

[seadog]

The battle goes on

I think we should let things run their course. All this talk of "I'll chip in", is great.. but not right now. Montpelier are the ones who are paying for our fight for now. Lets not give them the idea that "ah well ok... lets throw the towel in and these contractors can have a whip round to continue the legal fight". Stand your ground.

Hi Future Cat.

In their last missive MontP were less than convincing about their future course of action to take this case to the Supreme Court or to Europe.

Whilst they are funding this legal,action and may well continue to do so, we cannot take that for granted. On a previous scheme I had with with MontP I expected them to fight it all through the tax courts but got short sharp email to say they did not think it was worth taking the case further and dropped it without more ado.

So if we win the CoA, we need to lobby to get S58 amended to limit the retrospection to 12th March 2008 (That being the date of the announcement of BN66 which would be in accord with the parliamentary Rees rules)

If the decision goes against us we need to be ready to insist that MontP continue the legal case through the courts and also continue to lobby for the amendment to limit retrospection. That's why I think it would be prudent to be ready for any eventuality when we get the CoA decision.

DR has been a very good spokesman on our behalf and I am sure, with our support, he will continue to front the fight for us.

[deckster]

Hi Future Cat.

In their last missive MontP were less than convincing about their future course of action to take this case to the Supreme Court or to Europe.

Whilst they are funding this legal,action and may well continue to do so, we cannot take that for granted. On a previous scheme I had with with MontP I expected them to fight it all through the tax courts but got short sharp email to say they did not think it was worth taking the case further and dropped it without more ado.

So if we win the CoA, we need to lobby to get S58 amended to limit the retrospection to 12th March 2008 (That being the date of the announcement of BN66 which would be in accord with the parliamentary Rees rules)

If the decision goes against us we need to be ready to insist that MontP continue the legal case through the courts and also continue to lobby for the amendment to limit retrospection. That's why I think it would be prudent to be ready for any eventuality when we get the CoA decision.

DR has been a very good spokesman on our behalf and I am sure, with our support, he will continue to front the fight for us.

This, 100%. So far we as a group have done remarkably well at disseminating information, coming together and generally keeping spirits up in what is an unprecedented situation for all involved. One of the ways we've done this is by openly discussing issues, processes, plans and our different outlooks on where we've found ourselves and a key part of keeping optimistic is always to have a plan no matter what. None of us know what will happen in the next month or so, but we do absolutely no harm to our cause by discussing what we will or won't do if things go against us.

Hope for the best, plan for the worst.

[theywontbreakme]

Just seen this article...

and even though it's about american taxes, I thought the article was very sensible and pertinent.

Tim Fernholz recounts his thoughts on Google's now-famous tax avoidance:

Seriously, though, after reading this article about Google's evasion of $3.1 billion in tax obligations through legal loopholes, I got into a Twitter argument with Townhall.com's Kevin Glass about whether this move is a violation of Google's famed "Don't be evil" mantra. Glass saw some virtue in Google's evasion, whereas I predictably thought Google should pay its fair tax burden.

Ultimately, Fernholz concludes that Google's tax scheming was hypocritical given the company's ostentatious and self-righteous claim to virtue.

So is this action evil? If Google's definition of not being evil is 'doing more than the average corporation to support the public interest,' then sure it is. It's one thing to take advantage of legitimate tax law, but exploiting these loopholes for the sole purpose of paying less tax violates the spirit of the law, if not the letter. That would be fine if Google was content as a typical business, relentlessly pursuing profit with no thought to the public interest. They simply shouldn't pretend they're somehow better than the Exxons and Goldman Sachs of the world.

He's absolutely right. But hypocrisy really is the key issue. Not, as Fernholz suggests earlier, any notion of Google's "fair tax burden." Fair is a political concept, and when it comes to taxes, a hard one to pin down. After all, what's a fair average tax rate for Google to pay? The top marginal rate of 35 percent? Something less? How much less? Would it be fair if Google doubled its average tax rate from last year's 2.4 percent to 4.8 percent? What if the company tripled or quadrupled it? Where do we draw the line between "fair" and "unconscionable"?

Ultimately, I think the only real measure of a tax avoidance strategy is whether it's legal, not whether it's consistent with the "spirit" of the law, whatever that is. The whole notion of the law's "spirit" assumes that tax loopholes appeared in the law by accident. As opposed to being secreted there deliberately by well-paid lobbyists and their congressional allies. Often, the spirit of the law is tax avoidance, not tax payment.

My bottom line is this: Don't like corporate tax avoidance? Then get your representatives to close the loopholes. Don't believe that's possible (either because corporate tax lawyers are too smart or politicians too venal)? Then change the tax system. Because a tax system that depends on the willingness of taxpayers (corporate or individual) to willingly pay more than their minimum due is not a tax system for the real world. Taxpayers are never charitable with the government. Never have been, never will be.

As the famed jurist Learned Hand remarked in 1947: "There is nothing sinister in so arranging one’s affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands. Taxes are enforced exactions not voluntary contributions, to demand more in the name of morals is mere cant.”

[Buzby]

MontP Client

[QUOTE=theywontbreakme;1251643]Hi all, I've spent the last two days (and nights) reading the BN66 threads. No mean feat with the number of posts! I feel for all of you and commend you for your resilience in dealing with this.

My husband and I are clients of Montpelier and we had the pleasure of a delightful christmas communication from the special investigations unit at HMRC earlier this week. Basically, the letter says...

Welcome to our forum. I guess if you have just received your Christmas present from HMRC you were not on the DTA scheme?

Those of us which used the DTA scheme have been living with this for a number of years now, and I hope you can try and get some sleep, as no doubt it will drag on for many years.

I do not think my closure notices included any penalties, and certainly no option to resubmit any of my tax returns.

if you can withdraw your tax return might be worth calculating what your tax would be using a LTD company?

keep the faith, try and not let this take over your life!

[bollox]

Hi all, I've spent the last two days (and nights) reading the BN66 threads. No mean feat with the number of posts! I feel for all of you and commend you for your resilience in dealing with this.

My husband and I are clients of Montpelier and we had the pleasure of a delightful christmas communication from the special investigations unit at HMRC earlier this week. Basically, the letter says...

We do not agree your tax return of 2007/08.
We are investigating Montpelier for criminal activities
We are making civil enquiries into your tax return
You may wish to withdraw your return for that year and settle your tax liability

The letter makes no reference to being cop8 or 9 and doesn't give much information other than that above. We have spoken several times since then to our accountants in the Manchester office and they insist that the scheme will be robustly defended.

They seemed to confirm that the raid on the I-o-M office was in relation to the scheme we used, but they did say that all documents were still being held back from hmrc/police. They are in dialogue with hmrc with regards to the technicalities of the scheme for now, and are answering all their questions.

Our exposure is six figures; Montpelier has given us a complete breakdown, but we may be amongst the lucky ones in that we may be able to cover the amount by taking the equity from our home, so we intend to do that (if we can) and buy a CTD to cover our potential liability. We're just left with the interest then and potential penalties. This just means that our medium and long term future is potentially ruined but that in the short term we should be just about ok. All good there then.

We can't find anything definitive about penalties so this is what is now causing me the greatest concern, because if they were to go for 100%, then we'd be ruined.

Is this what you get for working 20 hour days, neglecting your family, working yourself into the ground and taking part in what was sold to us as a genuine, above board, transparent and completely legitimate tax mitigation scheme? I am so angry. .

think you're only liable to penalties if you've either not declared the scheme correctly on you're tax return or if the scheme is in some way fraudulent - hope this helps and sorry to hear of your predicament (which unfortunately is all too familiar to us on this board)

[theywontbreakme]

thank you for the welcome.

We weren't on a DTA scheme. I think ours was commonly known as a sideways loss scheme or something similar to that.

Montpelier are, at the moment adamant that the scheme is completely legal, and are assuring us that they will defend it as far as they can take it. Given that we are being told that the scheme isn't being formally investigated yet, we are not of the mind to settle a potential liability. However, the mention in the letter of criminal investigations and arrests has, I admit, got me more than worried. As such, we intend to go the CTD route to protect ourselves.

The scheme was fully disclosed to hmrc and and was given a scheme number which was used on our return. I am assuming though that hmrc believe Montpelier has done something fraudulent or they wouldn't have been able to arrest WG and raid the I-o-M offices??

So should I be very worried about the scheme being retrospectively declared fraudulent? Would we have to carry the can if something that was sold to us as legal turns out not to be? Aren't we then the victims of a crime?

Hmrc going after us for huge penalties would be the end of us.

[DonkeyRhubarb]

(1) However, the mention in the letter of criminal investigations and arrests has, I admit, got me more than worried.

(2) The scheme was fully disclosed to hmrc and and was given a scheme number which was used on our return. (3) I am assuming though that hmrc believe Montpelier has done something fraudulent or they wouldn't have been able to arrest WG and raid the I-o-M offices??

Hello and welcome to our little gathering.

(1) This was almost certainly the intention ie. scare tactics.

(2) If you fully disclosed on your tax return then I don't see how HMRC can impose penalties.

(3) From what I can gather, HMRC instigated the raids because they didn't feel Montpelier were supplying the information they wanted in a timely enough fashion.

It is interesting that they haven't issued a COP-8 yet. I wonder if they're waiting to see if this letter is enough to do the trick and persuade you to settle.

I know it's difficult but try not to worry.

[OnYourBikeGB]

Is this what you get for working 20 hour days, neglecting your family, working yourself into the ground and taking part in what was sold to us as a genuine, above board, transparent and completely legitimate tax mitigation scheme? I am so angry.

Montpelier seem reluctant to discuss the penalties situation with us so I was wondering what was it about your case that meant penalties weren't deemed to be appropriate?



Merry christmas my hmrc friends. Your timing has been impeccable.

Good luck to everyone awaiting the outcome of the appeal. I have everything crossed.

Hello, I read you post and I can only say keep your chin up. This whole experience has been a real eye-opener for me on how big companies can get away with anything, and we can get walked into the dirt. HMRC and their timing is coldly calculated to have the maximum psychological effect. We've all seen it.

The very best of luck, I hope all works out for you and your family. It's a dirty fight, but they haven't beaten you or us yet.