BN66 - Round 2 (Court of Appeal)

[prozak]

You have lured me out of hiding again.

And remember I am a gamber.

What are the odds of HMRC extracting payment from someone living in the UK?

What are the odds of HMRC extracting payment from someone living abroad with no assets in the UK?

Obviously some foreign parts are better than others.

But if I had to bet, I know who I would put my money on every time!!!

Well, had I been in this scheme and hit by BN66 I know I would have spent the last few years ensuring that my assets were only accessible by me.

With your assets protected you have the option of meeting the claims of your creditors or not.

[screwthis]

Well, had I been in this scheme and hit by BN66 I know I would have spent the last few years ensuring that my assets were only accessible by me.

With your assets protected you have the option of meeting the claims of your creditors or not.

Not sure if it's that simple.

Firstly, if you claim you don't have the assets to settle the demands then they can and probably will look into your accounts and land reg. transactions going back at least as far as the first challenge letter.

If there are transactions moving to trusts or offshore they will want to know what it is and see that there is a reason for it other than hiding assets.

Secondly if you do manage to somehow convinnce them that you can't settle then they will make you bankrupt.
This may not be a problem for some but it will prevent you from working in a financial institution which is where most IT contractors make their living.

This whole hiding argument assumes that the money is worth more than the bankrupcy causes harm.

[Tax_shouldnt_be_taxing]

Not sure if it's that simple.

Firstly, if you claim you don't have the assets to settle the demands then they can and probably will look into your accounts and land reg. transactions going back at least as far as the first challenge letter.

If there are transactions moving to trusts or offshore they will want to know what it is and see that there is a reason for it other than hiding assets.

Secondly if you do manage to somehow convinnce them that you can't settle then they will make you bankrupt.
This may not be a problem for some but it will prevent you from working in a financial institution which is where most IT contractors make their living.

This whole hiding argument assumes that the money is worth more than the bankrupcy causes harm.

Just for the record, HMRC cannot make you bankrupt. They need to apply for a Bankruptcy Order to a County Court if that is the route they wish to go down. And the grounds for a Court granting this need to be fully justified. Also, and whilst this is not applied by default, the presence of minors (under 18) in the family home can be taken into account by the Courts such that they have the power to defer a BO by 12 months to give you time to make arrangements for your children if the family home is affected by the BO and in fact circumstances can be brought such that a Court does have the power to ensure the family home is not affected by the BO until children reach the age of 18.

Don't get me wrong, having kids under 18 living in the house will not automatically provide a "shield" from the family home being part of the BO but it will be considered by the Courts if a defense on these lines in applied. So don't go looking to either get knocked up or to adopt a 2 year old to protect the house.

Anyways, the point is, HMRC cannot make you bankrupt. A Court does that. And for what it's worth, HMRC have to lodge the request for the Order, you can defend it as best you can and the Court decides if and how to grant it. I've spoken to a couple of Solicitors on this matter and this is what I was told. Who knows, if you ended up in that position and you tell the Court that what you're being made bankrupt for are monies that were not legally due until HMRC changed the law backward and that's why you never put it aside and hence why you are now here...

At the end of the day, it would be a Creditor Petition for a BO being granted and a trustee being appointed all decided by the Court. As has been mentioned here before, if they come knocking and want the keys to the front door, they cannot simply walk in unless you invite them. They need to go via the Courts for this and a BO if you refuse to just hand the house, car, kids and cat over.

[DonkeyRhubarb]

Interesting that you don't seem to find anything in the press about this........

Apparently the story has already been reported in one of the IoM newspapers but it hasn't appeared in their on-line edition yet.

What will be interesting to see is if any of the nationals pick it up.

[moira under the stairs]

Apparently the story has already been reported in one of the IoM newspapers but it hasn't appeared in their on-line edition yet.

What will be interesting to see is if any of the nationals pick it up.

I wonder if the Nationals will be made aware of it !!!!

[DonkeyRhubarb]

I wonder if the Nationals will be made aware of it !!!!

If it is reported favourably then that goes without saying.

[Tax_shouldnt_be_taxing]

Tomlin Orders

Slightly cart before horse, but knowledge is power as they say. Naturally there have been postings here about the Doomsday Scenario (and we're a long way from that yet IMO). But as per my last post, there are all sorts of considerations when debts come into play. In cases where a debt exists, a Creditor has to follow due process to look to claim the debt back such as a BO that I referred to. Whilst any Creditor may take a different approach to how to settle the debt, there is one option often proposed by Solicitors acting in defense to mitigate a BO or indeed to prevent further Court actions. It's a Tomlin Order. This is basically a "contract" between the 2 parties to agree a repayment of some / all of the debt over a fixed period and with various conditions such as a Voluntary Charge where you sign a legal (Land Regsitery) document to grant rights of value over your property to the Creditor. This requires the written consent of any other Charge holders (Mortgage Company etc) on the property. What a Tomlin Order can do if you or your Solictor would propose it to HMRC is demonstrate to the Courts a viable solution in principle. If a Tomlin Order is signed by both parties (you and HMRC) then a Court signs the Order to legally acknowledge the contract. Breach of it does waive any protection though.

The point I make is that whilst all of this is in a conjectured future, the worst case scenario that I know many worry about is not as "given by default" as it may appear. There is due process and legal requirements to be followed. Hector cannot simply roll up and nab your house. There is a Court process to go through. There are mitigating circumstances that can be offered up to a Court. There are deferral options for Courts. There are Tomlin Orders that can be proposed to HMRC.

So suffice it to say, we're still well and truly in the fight and whatever happens, not even HMRC can stoll up to your door and demand the keys. If you're daft enough to offer them up, that's your mistake. And 3000 folks being processed through the Courts on a BO basis and with Tomlin Orders and Voluntary Charges being offered and the like and if minors live in your house, it's simply not a case of "we lose, you're bankrupt and HMRC nab the lot" all within a week.

If that was the end game and you sat on your hands and waited for Goddot, then the defaults will apply and you risk losing all in quick time. The Solicitors I spoke to are more confident that interception of the issue should it arise offers options. Whilst nothing in this respect is ensured, it's the Courts that decide and actions such as Tomlin Orders, Voluntary Charges, minors and the like can all have influence on any BO decision. I'm posting this for future reference if it were needed. But before then we still have a fight on, the CoA ruling and the like. But I prefer to know as much as I can up front to better understand the options further down the line.

[moira under the stairs]

I'm posting this for future reference if it were needed. But before then we still have a fight on, the CoA ruling and the like. But I prefer to know as much as I can up front to better understand the options further down the line.

Agree its nice to have a contingency plan if it goes 'tits up' for us !!! but those b'strds will stop at nothing... what happens if they outsource the collection or even sell on the debt (god forbid), I understand that the court process still stands... but is 'trotter debt collectors inc' going to take any notice.

[Tax_shouldnt_be_taxing]

Agree its nice to have a contingency plan if it goes 'tits up' for us !!! but those b'strds will stop at nothing... what happens if they outsource the collection or even sell on the debt (god forbid), I understand that the court process still stands... but is 'trotter debt collectors inc' going to take any notice.

It's a good point. But actually if outsourcing happened or more likely, passed to an HMRC appointed Liquidator, that's rather good. I know as a fact that in such circumstances, recovering all the monies come second to the Liq covering their costs, making a small profit and settling.

The key point I want to make is that HMRC don't have the powers to enforce bankruptcy or run after a debt on their own. The Courts need to be engaged. And if "Trotter & Co" get given the remit and roll up one day then going to Court yourself gives more traction to you.

HMRC are a Creditor plain and simple. And they're not even a Preferential Creditor anymore. So if they want bankruptcy and you owe monies (e.g. mortgage) to other Creditors then HMRC have to get in line. And a Court must consider all of this.

I'm not trying to suggest that there's a safe route out. Rather, I'm saying that what happens is not by default just because HMRC might infer that. And any outsourced outfit cannot just try it on unless you're willing to roll over. A good Solicitor will put an end to that. And IF that was then end position, taking it to Court yourself and to preempt what might comes next won't in many cases do you any harm.

There's a BIG difference to losing the BN66 battle and losing everything you have. Knowing the legal process in advance and how to approach the possible issues makes me sleep better at night. Actually, the idea of an HMRC grunt turning up at the door tomorrow is rather appealing. Having spent far too long looking into this scenario means that I'm better prepared and would relish the chance to read said grunt the Riot Act. Then engage Solicitors to have a right old crack at them. Get them on camera, read the law to them, ask them to sign a document acknowledging the legal position and chasing them off my property would make compelling viewing in Court.

Part of my frustration is not being able to engage in "close contact". If or when that time comes, if "they" don't follow due process I will be happy to spend a few grand on legal eagles to remind them of this.

Hector, be warned if you're reading. The law is more than just the BN66 case. Don't think about sending in your GCSE-free inturns to demand payment of monies that you only "realised" were due once you re-invented Padmore in 2008 when you never mentioned this "obvious" point in 6 previous years or Budgets. Oh, sorry, it appears you have sent round the mob to some in the past. Probably needs "clarification" of your procedures. There IS due process and that is not one defined by HMRC. Legal process applies.

[Potius sero quam numquam]

Tax_shouldnt_be_taxing

Here is a man/woman who is clearly thinking.

We've all had nearly 3 years to explore options. Even if many of us were initially complacent, and I include myself in this category, what happened this time last year should have been a huge wakeup call.

We have no control over what the courts decide but in the worst case we can influence our ultimate fate.

Don't leave this "planning" to HMRC.