BN66 - Court of Appeal and beyond

[Morlock]

So not only do HMRC have a time machine, but its a little bit faulty and words get changed in the space time continuum.

...presumably by a bloke called Eddy..?

[nevergiveup]

Putting together a time-line that we can use to tell a story, how is this for a start, I would like to highlight facts that indicate misleading of parliament and other relevant info - Can we flesh this out a little?

*************

1987 - Padmore legislation - Retrospective law agreed, but none of the people affected were required to pay retrospective tax - Hansard

1999 - IR35 Introduced, making may consultants unsure of their tax position - link

May 2001 - Montpelier scheme starts operating. Users register their Trusts with HMRC (full disclosure!)

July 2002 - HMRC issues a bulletin to all tax offices advising them to report any use of the scheme to a central office. They say they "are considering how best to challenge the scheme". - Technical Exchange 63

March 2003 - Promoters of the "Suo Motu" version of the scheme decide, for whatever reason, to approach HMRC to negotiate a settlement. A deal is agreed whereby the users are let off from paying any interest or national insurance, and income tax is discounted.

May 2003 - 4 test case users of the Montpelier scheme receive enquiry notices for tax year 2001/2. HMRC states its intention to pursue the cases through the Special Commissioners.

2003 - 2006 - Users continue to receive enquiry letters. HMRC cites various arguments as to why it believes the scheme does not work. However, there is never any mention of Padmore, 1987 or retrospective legislation.

1 Aug 2004 - Requirement to Disclose all Avoidance schemes

6 June 2005- MTM (Montpelier) advised that HMRC issued scheme reference number 64663083

11 Dec 2006- Letter from MTM stating that Mr Brannigan from HMRC reported "likely line of attack is S739 TA 1988, MTM plan to get test case before Commissioners in Q4 2007

1 Nov 2007 - HMRC Discuss scheme and decide to use 'clarification' of padmore case - see link

2008 - Debate of act in HoC, many including David Gauke opposing - Hansard

2009 - Exchange of communication between Stephen Timms and Committee on Human rights, showing that they were not consulted in the drafting of BN66 - link

2009 - Brannigans note, now using retrospection rather than clarification

28 Jan 2010 - Court of Appeal - Judgement

2010 - Finance Act 2010 memo saying that in future any retrospective measures must be passed by JCHR - link - To prevent our mess again!!

Jan 2012 - Supreme court refuse permission to hear our case, thus upholding retrospective nature of BN66

Feb 2012 - Retrospection applied to Barclay's for maximum of 3 months - link

Feb 2012 - Retrospective tax for Ports authority waived - link

For those who are in contact with their MP's is it worth pointing out this link so they can see exactly what's going on?

[Emigre]

PS, what is this ?

Ah, is it this: http://www.parliament.uk/documents/j...UKE_300910.pdf

Havent seen that before. In this it appears to me that Gauke has agreed to consult JCHR prior to any retro laws being passed in the future. If this had happened in 2008 it is very likely that we wouldnt be in this mess as JCHR condemn the retro clause of S.58.

Yes, that process was developed as a result of DR's efforts with the JCHR. The JCHR told Timms to adopt that approach. I cannot remember the details but there was either the requirement for an impact assessment (which did not happen for S58) or just for JCHR to be notified (oh, that didn't happen either) in relation to Finance Acts (it seems that there was a somewhat more respectful and responsible proceedure adopted for other legislation). For the record Timms refused to answer their questions about S58..."its in the hands of the Courts".

DR can JCHR now demand a revciew of S58 by Gauke, given that it is no longer "in the hands of the Courts"? Every angle must be worth pursuing.

[OldITGit]

Response from Member of Parliament

Yes, that process was developed as a result of DR's efforts with the JCHR. The JCHR told Timms to adopt that approach. I cannot remember the details but there was either the requirement for an impact assessment (which did not happen for S58) or just for JCHR to be notified (oh, that didn't happen either) in relation to Finance Acts (it seems that there was a somewhat more respectful and responsible proceedure adopted for other legislation). For the record Timms refused to answer their questions about S58..."its in the hands of the Courts".

DR can JCHR now demand a revciew of S58 by Gauke, given that it is no longer "in the hands of the Courts"? Every angle must be worth pursuing.

In response to my letter to member of Parliament
I received a 2nd class postcard with thanks for your communication "which will receive attention". I was expecting their standard response, "we are awaiting the outcome of test cases in Tax Tribunal" or should we expect that when following up our letters to MP's?
OIG

[portseven]

Timms???

Anyone have Stephen 'Lurch' Timms their MP?

Given he is arguably one of the architects of our woe's both IR35 and BN66 he has a lot to answer for, would be interesting to get his response to a constituent asking for help on this...

[Toocan]

have contacted my MP by letter and email (recently once but twice last year) - no response whatsoever - he's Conservative MP Mark Prisk (supposedly small business minister last I heard) - whats the next step in this - is there a formal complaints procedure re MPs not responding to constituents?

I think the next step would be to phone him. Some MPs will run a mile from anything that might be labelled "Tax Avoidance" - so make it clear that this is about HMRCs conduct rather than avoidance as such.

Here is his contact details: Mark Prisk

[SantaClaus]

For those who are in contact with their MP's is it worth pointing out this link so they can see exactly what's going on?

Love your Avatar!

[Tax_shouldnt_be_taxing]

MP Pop Quiz

One way to get your MP thinking could be to have a simple Q&A session to get things warmed up:

1. What is the definition of retrospection when applied to tax legislation?
2. How many definitions are there of clarification and then define them?
3. For the purpose of UK taxation has anyone ever been exempt from being taxed on their earnings and give an example?
4. What is your understanding of what Section 58 FA 2008 achieves?
5. Who is responsible for issuing tax demands?
6. Who briefed Ministers on what Section 58 should achieve?
7. How many times was the word partner used in the 1987 Inland Revenue Explanatory Notes?
8. What does Section 58 really do?

Then you can enlighten them on the truth:

1. There are 2 distinct definitions of retrospection. The one used in Padmore and the opposite one used in Section 58
2. There may be many definiutions but they all arrive at the same meaning - The removal of obstacles to understanding
3. Yes, there are many. Padmore et al to name a few and anyone who had already filed tax relief claims before 1987 for DTA relief for partners in a foreign partnership. In that instance Parliament defined them as a "restricted class of person".
4. It restores the meaning of the law as it stood in 1987 and put its meaning beyond doubt of what Parliament always intended. Yet based on (3) they never intended to have a wider meaning of person so that it included me. They never intended to tax anyone who had made a tax claim. See (3). So it does the exact opposite of what Parliament intended.
5. HMRC
6. HMRC
7. 18 times. By the way I was never a partner in the Scheme I used.
8. It allows HMRC to look at past legislation, change its meaning and intent as intended by Parliament to achieve HMRC's own aim to pfrevent something legal and change the tax consequence as a result. They could not do it through the law so the briefed Ministers so the law changed whilst making out nothing had changed and the illusion was complete.

When did Parliament legislate to use smoke and mirrors and rabbits in hats to form the basis of our laws and when did the Sovereign agree to give Royal Assent to such?

[Tax_shouldnt_be_taxing]

CN's

BTW, I hope that HMRC havn't tried to make changes to anyones CN such as the 4 test cases or others. The courts would not be pleased if they had...

Enquiries: HMRC caught by own closure notice | AccountingWEB

[Tax_shouldnt_be_taxing]

PS, what is this ?

Ah, is it this: http://www.parliament.uk/documents/j...UKE_300910.pdf

Havent seen that before. In this it appears to me that Gauke has agreed to consult JCHR prior to any retro laws being passed in the future. If this had happened in 2008 it is very likely that we wouldnt be in this mess as JCHR condemn the retro clause of S.58.

As you will see in points 3 and 4, if you take the arguments put in defense of BN66 by JK, HMRC and the like then it makes it sound tight. If you read what actually was intended in 1987 then it's rubbish. If the argument put about 1987 and Hansard sticks then if Gauke applied 3 and 4 to our case, BN66 retrospection would have to be turfed out. As it was the JCHR were not happy about the retro element bu Timms just side stepped them. If 2010 was made retrospective then you couldn't have BN66 - amazing!