BN66 - Court of Appeal and beyond

[WhiteCat]

IR35 and beyond

I certainly joined the scheme in 2001 because of IR35 . . . .

Me too and I'd bet that covers most of us. I actually paid up for the first two years of IR35, thinking that the family could afford it, but the extra £25,000 a year proved more painful than we expected. On finding out that most people in my position were not operating inside IR35 I was quite receptive when invited to an MTM presentation around Easter 2002. When told that the scheme was likely to be closed down in a couple of years, I saw joining up temporarily as a way to recoup the previous two years IR35 payments. The scheme wasn't closed down, I didn't leave and the rest is a combination of history and time travel . . . . . Happy New Year all.

[seadog]

You're not wrong there. She was in the Labour government who introduced this.



On the other hand, her committee might be interested in this:

The Suo Motu deal - a Freedom of Information request to HM Revenue and Customs - WhatDoTheyKnow

Hi DR

In the battle of words between Harnett and the Public Accounts committee on Iplayer, Hartnett actually said they could only reveal or discus confidential information if it was legally in the public domain.

I agree with you if it had been revealed in a court of law by an HMRC official that surely counts as legally in the public domain.

I understand the need the need for confidentiallity re indivual taxpayers affairs but in our case the refusal to disclose the Suo Motu info plus other FOI requests is clearly an attempt to frustrate any enquiry into their conduct.

I think I am right in saying that the only person who have access to all this information is the Ombudsman.

This forum has built up enough background evidence on these matters to convince any independant observer of their misconduct.

Isn't it time we started thinking about launching a complaint about HMRC conduct and referring it to the Ombudsman for him to investigate just how badly they have behaved in the IR35 and BN66 affairs.

[portseven]

What's frustrating about the timeline is that I joined the scheme in Sept 2006 (left 2008), given that the scheme was well in HMRC's radar at that point I wish I had done some more due dilligence at the time.

I was returning to contracting after a brief spell as a permie, and so I was just looking for an umbrella rather than a Ltd, thats what I thought it was (and was sold to me as), just another brolly.

Hindsight is a wonderfull thing....

[DonkeyRhubarb]

However, I suspect the judicial view of this will be that HMRC were not obliged (in some weasel-worded, smelly, legalistic sense) to invoke a case in front of the Special Commissioners.

And the judiciary would be right. There is no obligation for HMRC to litigate in a tax dispute even if, as in our case, they had repeatedly stated their intention to do so.

Although it's interesting to chart the history of this whole wretched business, much of it is irrelevant as far as the legal case is concerned.

The courts are only being asked to consider the narrow question of whether BN66 is compatible with article 1 of the 1st protocol ECHR.

[seadog]

What's frustrating about the timeline is that I joined the scheme in Sept 2006 (left 2008), given that the scheme was well in HMRC's radar at that point I wish I had done some more due dilligence at the time.

I was returning to contracting after a brief spell as a permie, and so I was just looking for an umbrella rather than a Ltd, thats what I thought it was (and was sold to me as), just another brolly.

Hindsight is a wonderfull thing....

Like you I joined the scheme in 2005/6. If HMRC had "clarified" the meaning of partner in 2001/2 when they first knew about the scheme many, like you and I, would not have joined the scheme.

You talk about due diligence. I took HMRC advice about my tax affairs and consulted a well know firm of national accountants. They advised me it was all OK but did warned the loophole would be stopped sooner or later.

Not only did my accountants think it was OK, but so did KPMG, PwC Deloittes, Ernest Young and a number of QC's.

[bve534]

I certainly joined the scheme in 2001 because of IR35 but I'm wary about playing the IR35 card.

To most people, it will simply look like a case of Parliament introducing a new tax (IR35) and us not wanting to pay it.

Is it really any different to say Stamp Duty Land Tax avoidance?

DR- IR35 and S660a affected the lives of to quote "hard working" UK citizens so it is very different to other taxes. 2001 IR35 and 2003 S660a - both aimed at changing our lifestyle choice. I only joined the scheme because my life was being turned upside down and I was in despair - all I wanted was some certainty. They are very different to stamp duty tax avoidance and other minor taxes. It is a great pity our case is based on such a narrow HR issue.

[DonkeyRhubarb]

It is a great pity our case is based on such a narrow HR issue.

Unfortunately, European law is the only avenue available for challenging parliamentary legislation in a court of law.

Even the PwC/Shiner case is based on a narrow interpretation of EU Treaty.

If it wasn't for the fact that the UK has signed up to these conventions and treaties, Parliamentary supremacy would be absolute.

[moira under the stairs]

Unfortunately, European law is the only avenue available for challenging parliamentary legislation in a court of law.

Even the PwC/Shiner case is based on a narrow interpretation of EU Treaty.

If it wasn't for the fact that the UK has signed up to these conventions and treaties, Parliamentary supremacy would be absolute.

Even though HMRC misguided Parliament to get their way ??

[DonkeyRhubarb]

Even though HMRC misguided Parliament to get their way ??

The courts can only consider whether the end result (the enacted legislation) complies with the conventions and treaties.

It is largely immaterial how it came to pass.

Only Parliament itself, or the likes of the Parliamentary Ombudsman, can scrutinise whether the legislature was misled.

It is not for the courts to ascertain whether MPs were in full possession of the true facts and knew what they were voting for.

[Disgusted of Coventry]

The courts are only being asked to consider the narrow question of whether BN66 is compatible with article 1 of the 1st protocol ECHR.

I'm probably being really stupid, but is this, therefore, what it boils down to?

1) HMRC knew about the scheme and recognised it's legality, but then...
2) ...embarked on a 6 year campaign of intimidation and unsubstantiated threats until...
3) ...a QC turned up and said "Why don't we change the meaning of this 1987 text?", but...
4) ...HMRC called it a 'clarification' so as to slip it under the radar of...
5) ...Parliament, who made it retrospective Law.
6) A Court Hearing was then held, solely to answer the question...
7) ... "Is it fair for the Government to treat its citizens in this way?" and the Judge replied...
8) ... "Yes, that's perfectly OK".