BN66 - Court of Appeal and beyond

[DonkeyRhubarb]

Do we know whether the appeal application was submitted?

According to the latest letter it was.

NOTE

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[DonkeyRhubarb]

Request for your input

I have been in touch with a couple of other guys off the forum to put together a response to the points raised in Mummery’s judgement.

The judgement can be read here

Huitson, R (on the application of) v Revenue and Customs [2011] EWCA Civ 893 (25 July 2011)

The key issues taken direct from the judgement are.

1. public interest issues:

2. the right to enjoy one’s possessions without unjustified State interference;

3. a taxpayer’s legitimate expectations in such matters; the State’s fiscal policies and financial concerns; principles of legal certainty and proportionality in the context of retrospective legislation;

4. achieving a fair balance between the interests of the community and the rights of the individual;

5. the operation of Double Taxation Arrangements;

6. Changes over recent years in the judicial approach to the construction of tax avoidance schemes and applicable tax legislation.

In order to help us provide a response could you all go through the judgement with a view to making comment on these 6 points? We will then collate these and forward to the legal team to ensure no stone is left unturned to get this decision overturned in the Supreme Court.

Thanks
DR

PLEASE DO NOT POST YOUR RESPONSE ON THE FORUM, HMRC MONITOR THE FORUM.

SEND IT TO ME AS A PM

[Tax_shouldnt_be_taxing]

I don't believe it is at the moment.

If the SC was lost then an extension would have to be negotiated with HMRC.

It also depends what happens to Steed's application in the mean time. If it was accepted by Strasbourg then I think HMRC would continue to postpone collection.

If the application is still pending in 18 months time then HMRC might not be so amenable. Although it could be argued that by then the application had been in the system 4 years and a decision would be more imminent.

It may also be possible to petition Strasbourg to try and prevent enforcement.

Remember, HMRC know that enforcing collection could involve asset seizures and bankruptcy. It wouldn't look good if they did this before the court had even heard the case.

DR, if HMRC were "amenable" to stand back and watch for 8 years before thinking it important to act, I think it only "fair" to allow a further 8 years to stand and watch whilst we progress the case. So 2019 it is...

I mean what's good for the goose and all. Anyways, it not like they suddenly LOST 300M that had already been SPENT is it? That might hurt your bank account if you get my drift.

[centurian]

DR, if HMRC were "amenable" to stand back and watch for 8 years before thinking it important to act, I think it only "fair" to allow a further 8 years to stand and watch whilst we progress the case.

I'm pretty sure you used the f-word in irony here, but I've seen that word bounced around a bit in posts recently - and you guys need to be careful not to overuse it.

Your whole justification over the years for using an intensive tax avoidance system is that fairness is irrelevant ( i.e. "paying your "fair" share of taxes")

[seadog]

"paying your fair share"

I'm pretty sure you used the f-word in irony here, but I've seen that word bounced around a bit in posts recently - and you guys need to be careful not to overuse it.

Your whole justification over the years for using an intensive tax avoidance system is that fairness is irrelevant ( i.e. "paying your "fair" share of taxes")

There is no such thing as "paying your fair share". Your opnion of fair might be very different from my opinion of fair.

Lets start from the legal position of the tax system in this country. Nobody pays any tax unles the government has passed a law to say you do. Income tax as we know it today has only been around about 150 years. before that we has corn laws, window taxes etc, a whole raft of taxes which were struck down becise they were "unfair"

So has the government passed a law which says in our particular case we must pay tax?

Well HMRC think there is a rule but we don't. In this country if there is a disagreement over such matters the way to resolve it is to go to the well establised tax courts to get a legal ruling on the matter. That would be "fair" and if we lost then we we would have to pay the tax.

But in this case HMRC by their own admision in Technical Note 63 did not feel confident that their interpretation of the rules were correct so instead of going to the tax courts they changed the ruls and made it retrospective.

How does that measure up to being "fair"

We all know HMRC can be a bully. It has come in for a great deal of criticism recently over its behaviour. Some say this it is as bad as the newspapers in the hacking scandel. HMRC has previously been referred to as "institutionally dishonest"

When you can be judge and jury in your own case how does that measure up to "fair".

Breaching our human right is a very high hurdle to overcome, which is exactly why HMRC chose to go down this route rather than the accepted route of the tax court followed by prospective legislation if they were proved wrong.

So please explain how HMRC have been "fair"

[screwthis]

There is no such thing as "paying your fair share". Your opnion of fair might be very different from my opinion of fair.

Lets start from the legal position of the tax system in this country. Nobody pays any tax unles the government has passed a law to say you do. Income tax as we know it today has only been around about 150 years. before that we has corn laws, window taxes etc, a whole raft of taxes which were struck down becise they were "unfair"

So has the government passed a law which says in our particular case we must pay tax?

Well HMRC think there is a rule but we don't. In this country if there is a disagreement over such matters the way to resolve it is to go to the well establised tax courts to get a legal ruling on the matter. That would be "fair" and if we lost then we we would have to pay the tax.

But in this case HMRC by their own admision in Technical Note 63 did not feel confident that their interpretation of the rules were correct so instead of going to the tax courts they changed the ruls and made it retrospective.

How does that measure up to being "fair"

We all know HMRC can be a bully. It has come in for a great deal of criticism recently over its behaviour. Some say this it is as bad as the newspapers in the hacking scandel. HMRC has previously been referred to as "institutionally dishonest"

When you can be judge and jury in your own case how does that measure up to "fair".

Breaching our human right is a very high hurdle to overcome, which is exactly why HMRC chose to go down this route rather than the accepted route of the tax court followed by prospective legislation if they were proved wrong.

So please explain how HMRC have been "fair"

Couldn't agree more.

Stamp duty was originally just that, a duty for the time taken to stamp the deed transfers. This should by rights be a few hundred quid. Now the govt. want 5% for a house over £1million which lets face it in London is nothing nowadays. This tax doesn't keep up with inflation and doesn't adjust for region. How is that fair?

TV tax...a tax for owning a television whether you watch BBC or not and despite paying for cable, despite having paid the VAT on the television you bought plus the income tax on the money earned to pay for the TV plus the fuel duty the supply chain had to pay to deliver the parts etc etc. How is that fair?

Death duty. A tax on money already taxed when earned/saved/CGT etc.

BN66 a nuclear attack on a LEGAL structure. A structure to which they admitted in 2002 or whenever that they could not legally defeat (or some words to that effect).

As SeaDog said they were the judge and executioner and then because it is so heavy handed and unpalatable they pass a law to say that they can never do that again (Kind of like God with his rainbow promise never to flood earth again).

How is that fair?

By "fair" what they mean is others have paid the maximum tax we were able to squeeze from them so we want you to pay the same. "Fair" means "same". Not same as them or big business but same as the other little guys. So fair means don't try to be clever, don't plan to advantage yourselves, act like a good employee and pay us in full.

[ContractIn]

According to the latest letter it was.

NOTE

If you are not receiving these letters then contact Montpelier and make sure you are on the mailing list.

Thanks DR, received letter today. Seems to be a bit more aggressive, which I like!

[Leyther70]

I think its only 'fair' that they can wait 8 years for me to pay what they think I owe, as they seem to believe waiting 8 years before doing anything was 'fair'!

[Tax_shouldnt_be_taxing]

I'm pretty sure you used the f-word in irony here, but I've seen that word bounced around a bit in posts recently - and you guys need to be careful not to overuse it.

Your whole justification over the years for using an intensive tax avoidance system is that fairness is irrelevant ( i.e. "paying your "fair" share of taxes")

Yes I did use it with irony and yes it has been used often here. But count the number of times it was used during the Parliamentary debating stages and in Court. They're way up on us!

Just like the use of the word "proportionate" to justify BN66. But to what? Perhaps to what is fair? Hard to tell or even measure since both are mere concepts.

So I'll have a go at defining what proportionate DOES rather than what is MEANS.

The money in question has been defined as 100M, 200M or 300M. Let's not quibble about 100M or so but just take the middle ground as that seems fair. So 200M it is. Clearly the exact amount is irrelevant since the rationale to legislate was that it was "significant". So fiscally, the number itself doesn't matter just that it can be defined as "significant".

Society is made up of some 60M folks. Not all taxpayers. But that is society for you. Those who work, those who are retired, those who are kids and of course those who have 16 kids and cannot spell the word work. But let's not discriminate. All should be treated fairly or perhaps the same.

So HMRC get 200M quid. A one off windfall if you like (oops, there's that word again). Distribute it across society and every person gets... 3.33 quid each for the ENTIRE year or 1 penny a day for ONE year.

Wow, Waitrose here I come! But to make something proportionate you have to balance it with another measure.

So 2,500 people in society have to PAY this 200M. Keeping it fair as above that's about 80 grand each. Now you don't have to be Einstein to see that the proportionate LOSS to 2,500 folks is somewhat larger than the proportionate GAIN to 60M folks. But hey, that's life apparently.

Roll forward to the present day. The economy is in a mess. Everyone is saying that to get things moving, people need to SPEND into the economy. Well let's see what the above does.

I doubt 60M folks are going to rush out and spend their 3 quid on much that matters. There's not much in Waitrose for 3 quid I'd even want. So I don't see the use of 3 quid per person as providing much of an extra stimulus on high street spending.

What I do see is that to extract 80 grand from 2,500 folks will certainly reduce by a military mile their spending power. And with it a massive amount of Consumptive Tax. This will have a negative impact on the economy whereas 3 quid won't have any affect. If some are made homeless or bankrupt there exists a real possibility of them depending on the very state that put them there. How will that be paid for? Perhaps out of the 3 quid everyone else gets?

I see nothing economically valid in enforcing BN66. And as for proportionate? To what again? Well a loss to economic spending, an added burden on the state and 2 of Waitrose melt in the middle chocolate puddings for all! Yeah, proportionate my a*se and most definitley NOT in the Public Interest!

Oh, and I've just checked, my liability does not include 3 quid off so either I'm also being discriminated against with this DISPROPORTIONATE act or HMRC's lunch bills will benefit to the tune of 3 quid times 60M citizens.

Right, that's their proportionate argument put to the sword. Next?

[Emigre]

Yes I did use it with irony and yes it has been used often here. But count the number of times it was used during the Parliamentary debating stages and in Court. They're way up on us!

Just like the use of the word "proportionate" to justify BN66. But to what? Perhaps to what is fair? Hard to tell or even measure since both are mere concepts.

So I'll have a go at defining what proportionate DOES rather than what is MEANS.

The money in question has been defined as 100M, 200M or 300M. Let's not quibble about 100M or so but just take the middle ground as that seems fair. So 200M it is. Clearly the exact amount is irrelevant since the rationale to legislate was that it was "significant". So fiscally, the number itself doesn't matter just that it can be defined as "significant".

Society is made up of some 60M folks. Not all taxpayers. But that is society for you. Those who work, those who are retired, those who are kids and of course those who have 16 kids and cannot spell the word work. But let's not discriminate. All should be treated fairly or perhaps the same.

So HMRC get 200M quid. A one off windfall if you like (oops, there's that word again). Distribute it across society and every person gets... 3.33 quid each for the ENTIRE year or 1 penny a day for ONE year.

Wow, Waitrose here I come! But to make something proportionate you have to balance it with another measure.

So 2,500 people in society have to PAY this 200M. Keeping it fair as above that's about 80 grand each. Now you don't have to be Einstein to see that the proportionate LOSS to 2,500 folks is somewhat larger than the proportionate GAIN to 60M folks. But hey, that's life apparently.

Roll forward to the present day. The economy is in a mess. Everyone is saying that to get things moving, people need to SPEND into the economy. Well let's see what the above does.

I doubt 60M folks are going to rush out and spend their 3 quid on much that matters. There's not much in Waitrose for 3 quid I'd even want. So I don't see the use of 3 quid per person as providing much of an extra stimulus on high street spending.

What I do see is that to extract 80 grand from 2,500 folks will certainly reduce by a military mile their spending power. And with it a massive amount of Consumptive Tax. This will have a negative impact on the economy whereas 3 quid won't have any affect. If some are made homeless or bankrupt there exists a real possibility of them depending on the very state that put them there. How will that be paid for? Perhaps out of the 3 quid everyone else gets?

I see nothing economically valid in enforcing BN66. And as for proportionate? To what again? Well a loss to economic spending, an added burden on the state and 2 of Waitrose melt in the middle chocloate puddings for all! Yeah, proportionate my a*se.

A fair and proportionate response.