BN66 - Court of Appeal and beyond

[Emigre]

Mr Gittins said in Court that Montp had 2500 clients use the scheme. The following is an exact quote:
"in the six years that we ran the scheme we never at any time, with 2,500 consultants, had a single attack from HMRC under Section ..."

Thank you for that. However, the entire HMRC case against Huitson was based on embellishment, so I suspect the right answer may be somewhere in the middle.

I also had a PM offering deGraaf as another promoter. Any more?

[DonkeyRhubarb]

Keep those votes coming.

http://forums.contractoruk.com/accou...n-funding.html

[screwthis]

George Osborne has just stated on the radio 4 today program that he is NOT a 50p tax payer

No, he's now a 45p tax payer

[Morlock]

George Osborne has just stated on the radio 4 today program that he is NOT a 50p tax payer

so he's aggressively avoiding it by deliberately taking a job that pays less than £150K!!??
...how repugnant.

[BlasterBates]

A minister's pay is pretty rubbish really, 120 grand or so, when you consider a CEO gets millions.

They earn their dosh afterwards by writing books and giving talks.

[PlaneSailing]

so he's aggressively avoiding it by deliberately taking a job that pays less than £150K!!??
...how repugnant.

Not when his off-shore trust fund pays out he doesn't. (£4million worth)

Found this today when looking at the Rees Rules. Discussing
the 2004 disclosure rules. Granted, these are to do with employment income, not trusts, but the point is the same.

http://www.parliament.uk/documents/c...5/rp05-067.pdf

Page 30

Q97 Chairman: That is not the point. Why can you not stop it right back from the day? You notified them of 30 days, why can you not then stop it right at the beginning?
Mr Hartnett: Back to Day One of the 30 days?

Q98 Chairman: Yes.
Mr Hartnett: That sort of retrospective counter to these measures has not been used by Government of either party for some long time now ...

Q100 Chairman: - you would have to use retrospective legislation in order to stop it?
Mr Hartnett: Yes.

Q101 Lord Sheldon: What is the disadvantage of using retrospective legislation?
Mr Hartnett: I think, my Lord, business would say that would create great uncertainty for business, even for 30 days, for some of the scale of transactions involved.

Q102 Lord Roper: But if you are going back to the day they have notified it to you, that is not really retrospection. It is merely going back to the date of notification.

Mr Hartnett: I think there are human rights issues here which our lawyers have wrestled with and told us that there would be difficulty with this.


So this is 2 years into their tax enquiry, and they still expect
me to have believed that retrospection was a possibility?

[PlaneSailing]

Yet more from House of Lords 2005

If it is accepted that there is a loophole which has got to be closed, whether it is of a specific nature or in a number of different areas, then it should be closed immediately. If people are not going to act in a way that allows it to be closed through the Finance Act legislation, we just said that we would insist that it would be from the date of the Pre-Budget Report, and I think that is perfectly reasonable. Once you accept that a scheme is wrong, that as a form of avoidance it is unacceptable, then I think it is reasonable to close it on the day you have announced that you want it to stop. We are confident, I may say, that this does not conflict with the ECHR.


Here here. Totally agree. Quote from Mr Gordon Brown.

[Buzby]

PSC

If it is accepted that there is a loophole which has got to be closed, whether it is of a specific nature or in a number of different areas, then it should be closed immediately. If people are not going to act in a way that allows it to be closed through the Finance Act legislation, we just said that we would insist that it would be from the date of the Pre-Budget Report, and I think that is perfectly reasonable. Once you accept that a scheme is wrong, that as a form of avoidance it is unacceptable, then I think it is reasonable to close it on the day you have announced that you want it to stop. We are confident, I may say, that this does not conflict with the ECHR.


Here here. Totally agree. Quote from Mr Gordon Brown.

unbelievable, since GB was in charge when BN66 happened.

looks latest budget might cause anyone now in a Ltd company:

According to the chancellor’s report, the incoming package to tackle tax avoidance through PSCs includes ways to simplify how “IR35 is administered”

So at the moment I pay myself a dividend through my Ltd company - is this now tax avoidance - I guess its better than aggressive tax avoidance.

[taxedermy]

long time lurker

In the past I have only read this thread (& sometimes even take action) but never posted.

I got the same message back as everyone else from the TSC.

I am still yet to hear back from my local MP (Justine Greening)

Keep up the good work!!

[TalkingCheese]

Guess how I spend my spare time these days :-(

Prior to my meeting with my MP I thought I would have a little Devils Advocate Q&A against myself. Any extra comments/corrections, either way feel free:

What is the justification for such retrospection in the law that Section 58 Finance act 2008 allows ?
- The intent of the law has not changed and dates back to 1987. Therefore it is no surprise.
Then why not just apply the "intent" of the law to those affected by taking cases to the special commissioners ?
- because the law needed to be clarified beforehand
What was being clarified in Section 58 finance act 2008 ?
- That it was not only partners affected but anyone receiving income from the trust
So that is an amendment to the law ?
- No that is a clarification to put beyond doubt that it includes everyone not just partners.
Then if so, it stands to reason that the law was open to interpretation.
- The intent was clear and the interpretation was deliberately articial
If the intent was clear then, again, why didnt you take the 4 test cases to the special commissioners rather than changing the law, avoiding the need to go to court to debate the fact ?
- <The only answer I can think of here is that it was the easiest route to a resolution and if they could get it through parliament they wouldnt have to rely on the interpretation of the law.>

Those involved did not have any idea that the law could be changed in such a way and affect them retrospectively, agreed ?
- incorrect, Padmore in 1987 showed that retrospective application of the law was a possibility
But no-one was taxed retrospectively in this case. Those affected had no unexpected tax bill as a result of the retrospective change in law. It merely stopped those who hadnt claimed in making claims. It saved the public purse paying back £100m.
- and S.58 will gain the public purse £200m <note:no answer for the difference in the 2 cases as I believe there isnt one>
But this is very different to giving an unexpected windfall, resulting in the public purse paying back the money. In the case of S.58 it is not money the public purse currently has, or expects, without the retrospective application.
Also most wont be able to pay as it is a surprise tax
- they should have saved the extra money as they knew it was a risk due to investigations <No answer again on the difference>
But the amount due is almost doubled with interest as it took so long
- then we will give time to pay
Is that within HMRCs protocol, and Rees Rules, when, again there was no warning, and Padmore 1987 did not apply as a clarification was needed and only announced in March 2008 ?
- It was the intent of the law in 1987 to include all beneficiaries of the trust
Then why werent the test cases taken to the special commissioners to prove this ?
<we stop here again>

Let's assume that it is clear that the law in 1987 includes those affected by S.58 (which it isnt, but this is devils advocate!). Why did it take 6/7 years of knowing about it's use for HMRC to cite this as a reason the scheme didnt work ?
- We had mentioned all along that it did not work and were investigating returns since 2001
But the reasons you mentioned were not Padmore and always challenged successfully by those affected and seemingly accepted by the Inland Revenue/HMRC
- They were not accepted
Then why was there a need to change the law with S.58 and why not use the original reasons in front of the Special commissioners
<again we stop here>
Ok, then do you believe it is justified to take 6/7 years to make this change, all the while incurring interest (unknown to those affected or anyone else until the law was changed)
- It takes as long as it takes to get to this point <best answer I could think of>


And other questions I failed to even find plausible devilish answers for:
Why is it now acceptable for JCHR to be involved when retrospection is applied but wasnt in 2008 ?
Why did the HMRC not give justification to the JCHR, when asked, on the affect of S.58 ?
Why do banks and large corporations get concessions but not the "little" people ?
Doesnt it seem that those affected are caught in a situation which hasnt happened before and wont happen again due to new protocols put in place ?
It seems like the treasury has little to lose with this legislation:
- The purse gains some money from these working/middle class folk.
- It is not a large corporation so doesnt get the publicity or the attention that investors are too concerned about.
- It was introduced by the last government so not the coalitions fault.
yet thousands of individuals lives and their families will be greatly affected in a negative way. Is that fair ?