BN66 - Court of Appeal and beyond

[Tax_shouldnt_be_taxing]

Although I have nothing to do with this case or those involved I hope you lot don't mind a question that might seem a bit daft. Has anyone applied to the court to ask for an interim judgement getting HMRC interest "frozen" or reduced to inflationary only pending the outcome of appeals? As I understand it, the interest just keeps building and if there's an adverse final verdict this will substantially add to the eventual HMRC pay-day.

Don't mind at all. All good proposals welcome. IMO, I suspect that such a request would not be valid since BN66 claims to clarify what already was the case. In this respect it could have been from 1987 so the interest "due" was from when the scheme was first used.

What I would say is that Mummery LJ opening statement was that ours was a "very unusual income tax case". How so? BN66 says it's Padmore. Padmore is well known. It is not unusual. What it is though is a totally different outcome where the definitions have changed legally (yes Mummery used the word ammended to describe BN66, crucially different than clarify as HMT / HMRC claimed in the Parliamentary debating stages). Padmore was retrospective only in terms of specific legal definition - that of Partnerships. It was NOT retrosopective in terms of tax liabilities and deliberately so according to IR documents.

You cannot have something "very unusual" that also happened 20 odd years ago and is well documented where both cases produced the exact inverse outcome. Padmore was specifically and with the design of the then IR carved out to ensure that NOBODY was taxed retrospectively whilst BN66 does the complete opposite.

I don't know if this has been lost on people, but the LJ's like Parker stated that HMRC told us to pay on account. How much were you asked to pay by the Tax Calculation HMRC claim they will send you when they dispute a SAR? And as for the repeated claim at the CoA that Huitson or others could have gone to the Commisioners - to defend what? HMRC saying the scheme did not work is not the same as stating why it did not work. I don't see this rather important point being pressed at the CoA. But hey, TN66 gives us the answer. It's because it did - legally. But according to the HC and CoA not in terms of Public Policy. I would like to know where on my SAR the tick box is to confirm adherence to that!

[OnYourBikeGB]

I think it's important to note that all 3 judges ruled against us in both cases. The way I look at it is that I will set my money aside via CTD and what I can as savings against the outstanding interest and treat it as lost. I am not being pessimistic, I am being pragmatic. It is important to take stock and look harsh facts directly in the face. I had hoped for a split on at least one of the cases, and we didn't get it, and that's the simple, unpalatable truth.

[ASB]

One thing puzzles me (and has done for all the time this has been going on). Is it not possible to get an individual appeal into a criminal court?

Taxation matters can be either civil or criminal. Is it only HMRC who have the power to cause things to be heard criminal? AIUI if a commissioners hearing goes against you you are simply agreeing to settle a civil matter.

Ken Dodd and Lester Piggot were judged by the taxman to have broken the law and prosecuted - with mixed results. Does a taxpayer not have the same options?

[PinkPoshRat]

One thing puzzles me (and has done for all the time this has been going on). Is it not possible to get an individual appeal into a criminal court?

Taxation matters can be either civil or criminal. Is it only HMRC who have the power to cause things to be heard criminal? AIUI if a commissioners hearing goes against you you are simply agreeing to settle a civil matter.

Ken Dodd and Lester Piggot were judged by the taxman to have broken the law and prosecuted - with mixed results. Does a taxpayer not have the same options?

For a criminal case to be brought, certainly under the Theft Act, it would have to be alleged that an intent to 'permanently deprive' money/property by means of deception - that's just the basics of it, as with all law it gets more complicated... (it's been a good few years since I did any criminal law training, so the law may well have changed slightly)

[craig1]

Don't mind at all. All good proposals welcome. IMO, I suspect that such a request would not be valid since BN66 claims to clarify what already was the case. In this respect it could have been from 1987 so the interest "due" was from when the scheme was first used.

What I would say is that Mummery LJ opening statement was that ours was a "very unusual income tax case". How so? BN66 says it's Padmore. Padmore is well known. It is not unusual. What it is though is a totally different outcome where the definitions have changed legally (yes Mummery used the word ammended to describe BN66, crucially different than clarify as HMT / HMRC claimed in the Parliamentary debating stages). Padmore was retrospective only in terms of specific legal definition - that of Partnerships. It was NOT retrosopective in terms of tax liabilities and deliberately so according to IR documents.

You cannot have something "very unusual" that also happened 20 odd years ago and is well documented where both cases produced the exact inverse outcome. Padmore was specifically and with the design of the then IR carved out to ensure that NOBODY was taxed retrospectively whilst BN66 does the complete opposite.

I don't know if this has been lost on people, but the LJ's like Parker stated that HMRC told us to pay on account. How much were you asked to pay by the Tax Calculation HMRC claim they will send you when they dispute a SAR? And as for the repeated claim at the CoA that Huitson or others could have gone to the Commisioners - to defend what? HMRC saying the scheme did not work is not the same as stating why it did not work. I don't see this rather important point being pressed at the CoA. But hey, TN66 gives us the answer. It's because it did - legally. But according to the HC and CoA not in terms of Public Policy. I would like to know where on my SAR the tick box is to confirm adherence to that!

I don't think I was clear enough in my point, my fault. I understand the point about it being an already effective debt but what I mean is having interest effectively halted at the first time legal proceedings were started as you are perfectly entitled to validate the legal position of a tax demand. Essentially ask the court to freeze the disputed debt at the point of legal proceedings.

This wouldn't affect the legal position of the case as it's a common legal issue to get side clarification of debts in contractual disputes. Base rate +2% compounded over the 3-5 years expected in this case is a huge amount of money. I'd certainly want clarification of my potential debt before risking another 2-3 years of court action at that compound interest.

[petergw]

I don't think I was clear enough in my point, my fault. I understand the point about it being an already effective debt but what I mean is having interest effectively halted at the first time legal proceedings were started as you are perfectly entitled to validate the legal position of a tax demand. Essentially ask the court to freeze the disputed debt at the point of legal proceedings.

This wouldn't affect the legal position of the case as it's a common legal issue to get side clarification of debts in contractual disputes. Base rate +2% compounded over the 3-5 years expected in this case is a huge amount of money. I'd certainly want clarification of my potential debt before risking another 2-3 years of court action at that compound interest.

Craig1 - I agree with you. I think that we really do need to start looking at the interest situation carefully - in time the actual initial amount may well be relatively small compared to the additional charges!! especially if this goes on for a few more years...- just my thoughts...

[Tax_shouldnt_be_taxing]

I don't think I was clear enough in my point, my fault. I understand the point about it being an already effective debt but what I mean is having interest effectively halted at the first time legal proceedings were started as you are perfectly entitled to validate the legal position of a tax demand. Essentially ask the court to freeze the disputed debt at the point of legal proceedings.

This wouldn't affect the legal position of the case as it's a common legal issue to get side clarification of debts in contractual disputes. Base rate +2% compounded over the 3-5 years expected in this case is a huge amount of money. I'd certainly want clarification of my potential debt before risking another 2-3 years of court action at that compound interest.

Thanks for this and yes I agree, its pretty much the case in any other environment, interest is frozen at the point of dispute. Just look at the cases of a debt being handed to a debt management company. It's cheaper to go that route than remain with the lender. If HMRC passed these "debts" to the like then it would have been halted years ago.

It would be more "fair" to freeze the interest at the point where the dispute had been formalised. But if you believe BN66, it was formalised in 1987. Pity HMRC didn't make ANY reference to that between 2001 and 2008.

[nick4notax]

Oh well

It, of course, could have been far better but it most definitely does not change anything at all! We are being taxed unfairly, we all know that. The fight continues, as (deep down) we all knew it would anyway, regardless of today's judgement. Either by us appealing to SC or by HMRC (those cretinous little b@stards) doing the same.

This judgement is the another on the way to the SC. We owe it to ourselves to hold steady on that course and trust (yes, trust) the advice and support being provided by the sterling efforts of Montpelier. Naturally it is difficult to remain calm and focused when these events unfold. Like almost everyone on here, I face financial ruin too. I cannot change that other than support MPs direction here and trust we'll eventually win. The trust is not blind; MP are the best at what they do and continue to do it. If they weren't, Brown&Co would never have needed to change this country's law in such an underhand, dishonest manner.

The longer it drags on, the bigger the case for compensation, when we EVENTUALLY WIN this nightmare.

(meant in sincere good faith to all brethren)

[DonkeyRhubarb]

My 2c worth.

I haven't read the judgments but from comments made by others, our's seems to be a rubber stamp of Parker and PwC's case was also summarily dismissed. God knows why it took them nearly 9 months to come up with this.

We're probably looking at 15-18 months from now until we get a judgment from the Supreme Court. I can't see it going to Europe but there may be scope for a further challenge in the tax courts. I reckon we're talking 2 years tops.

What are our chances? Who knows. All we can do is hope for the best, plan for the worst.

I suggest we all use this time wisely.

I can understand that some people don't want to wait but I doubt very much HMRC would be in any mood for offering concessions with a second win under their belt.

[CanPayButWouldRatherNot]

compound interest

on to the Supreme Court ...simply means I have another 18months of my/their money sitting on my flexible mortgage using the benefits of compound interest ... whilst being charged simple interest by the revenue.

...for me no change that it was at 9:59 this morning.

take as long as you want guys...