BN66 - Court of Appeal and beyond

[Buzby]

epetitions

https://submissions.epetitions.direct.gov.uk/

do we think we could get 100,000 to sign a petition, then this could get BN66 debated in house of commons.

[northernSoul]

HMRC

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.

..

So please explain how HMRC have been "fair"

I havent' seen this forum in a while but I see there is still some confusion over HMRCs constitutional position.

HMRC :-
i) is not a legislator. It did not change the law. Parliament did, the principle legilsative forum of the British people. In reality, Parliament is your opponent in this case.
ii) is not a forum and is not empowered to decide the law
iii) is not a lawyer and cannot tell you what the law is (by virtue of (ii) as much as anything)
iv) is your opponent in an ongoing legal dispute and under no obligation to assist you in winning, the same as in any other legal dispute since time immemorial
v) will probably treat you like a child if you pay your taxes like everybody else. And give you a lollipop afterwards. But join a scheme like Montpelier's and it'll treat you like the big boys you are. And see you in court. And if it wins, it'll bankrupt you if necessary and force you to sell your houses, like the big boys you are, until it gets some money - having said that, as typical creditors go, it's far better behaved than most.

so your implacable enmity to HMRC is misplaced ... parliament is your enemy. Alas, the laws of parliament are much more difficult to beat in court than the antics of HMRC. HMRC are involved in this case only to represent a certain view of the law : an interested party, as it were. In reality their role in these cases is less than pivotal, because the claimant is Montpelier and the defendant is,in effect, the law.

I don't know if HMRC's lawyers have even been that influential with the bench. They seem to made their minds up without a great deal of support from HMRC's barristers being necessary.

As for 'fairness' that was permitted to enter the judicial equation the moment Montpelier invoked the HRA defence. The letter of the law is dispensed with in such cases, in favour of a general disposition to 'do the right thing'. And few judges are going to conclude that tax avoidance is 'the right thing', or take much persuasion that retrospective legislation is proportionate.

A letter of the law defence was available, of course, on the original law, until the retrospective legislation was passed. Why did no scheme member or Montpelier get a ruling from the tax commissioners before then ? It would have saved a lot of bother - and if a forum had given a ruling against HMRC, to be contradicted by later retrospective legislation, that later legislation would DEFINITELY have been in breach of the ECHR.

An opportunity passed up.

[Tax_shouldnt_be_taxing]

I havent' seen this forum in a while but I see there is still some confusion over HMRCs constitutional position.

......

An opportunity passed up.

A good analysis. However, to argue against HMRC changing the law you need to also consider that the likes of JK were advised. And as she herself admits, it was on the basis of the advice given that the law was framed. Who advised her? Well whether directly or indirectly it WAS HMRC. MacDougalls witness testimony for the High Court says "HMRC looked again in Autumn 2007 at the Padmore legislation".

So whilst your considerations are well thought out, don't think for a minute that HMRC did not in fact create this law. I agree our fight is with Parliament and perhaps we should be challenging HM Treasury. But we're challenging HMRC. And that too is right. HMRC stated they looked at the Padmore legislation in 2007 and right on the heels of that came BN66 and those in Parliament supporting it took advice. You don't have to be smart to know where that came from. It's the mob sitting across from you in the 2 courts we've been through.

If you blame someone for firing a gun, you should also look to find where they got it from.

[Slobbo]

I havent' seen this forum in a while but I see there is still some confusion over HMRCs constitutional position.

HMRC :-
i) is not a legislator. It did not change the law. Parliament did, the principle legilsative forum of the British people. In reality, Parliament is your opponent in this case.
ii) is not a forum and is not empowered to decide the law
iii) is not a lawyer and cannot tell you what the law is (by virtue of (ii) as much as anything)
iv) is your opponent in an ongoing legal dispute and under no obligation to assist you in winning, the same as in any other legal dispute since time immemorial
v) will probably treat you like a child if you pay your taxes like everybody else. And give you a lollipop afterwards. But join a scheme like Montpelier's and it'll treat you like the big boys you are. And see you in court. And if it wins, it'll bankrupt you if necessary and force you to sell your houses, like the big boys you are, until it gets some money - having said that, as typical creditors go, it's far better behaved than most.

so your implacable enmity to HMRC is misplaced ... parliament is your enemy. Alas, the laws of parliament are much more difficult to beat in court than the antics of HMRC. HMRC are involved in this case only to represent a certain view of the law : an interested party, as it were. In reality their role in these cases is less than pivotal, because the claimant is Montpelier and the defendant is,in effect, the law.

I don't know if HMRC's lawyers have even been that influential with the bench. They seem to made their minds up without a great deal of support from HMRC's barristers being necessary.

As for 'fairness' that was permitted to enter the judicial equation the moment Montpelier invoked the HRA defence. The letter of the law is dispensed with in such cases, in favour of a general disposition to 'do the right thing'. And few judges are going to conclude that tax avoidance is 'the right thing', or take much persuasion that retrospective legislation is proportionate.

A letter of the law defence was available, of course, on the original law, until the retrospective legislation was passed. Why did no scheme member or Montpelier get a ruling from the tax commissioners before then ? It would have saved a lot of bother - and if a forum had given a ruling against HMRC, to be contradicted by later retrospective legislation, that later legislation would DEFINITELY have been in breach of the ECHR.

An opportunity passed up.

So who do you think dreamed up the retrospective angle to this if not HMRC? The politicians certainly didn't. The Labour ones went in on the day with clear instructions to vote it in. They didn't make a decision. I don't know if the opposition politicians went in with instructions to vote against it but certainly the arguments on the opposition side seemed to be well thought out and considered which implied some of them did there homework.

As to why didn't we or MP take this to the tax commissioners. I thought it had to be HMRC that did that and anyway why would anyone pay to have something scrutinised when it was compliant with the law. My understanding was that HMRC didn't come up with BN66 angle until late in the day and never put that down in front of us or MP as the reason why the tax planning didn't work until BN66. The early legislation dealt with partners not trustees as well so how could it have applied. Why challenge something that didn't appear to need challenging.

Here is a question that has always confused me. If the legislation changes the meaning of the term partner to include trustees does this not change the term for all laws? If so what impact does this have for every law that deals with either trustees or partners.

Will HMRC now turn around and say look at trusts that are set up to avoid the death duty and apply some other tax law that dealt with partners to that arrangement?

[Tax_shouldnt_be_taxing]

[QUOTE=Slobbo;1371720]

As to why didn't we or MP take this to the tax commissioners. I thought it had to be HMRC that did that and anyway why would anyone pay to have something scrutinised when it was compliant with the law.

QUOTE]

HMRC don't have to do it, but in nearly all cases they would instigate litigation. We could have taken it to litigation. But on what basis? What would you be defending? "We don't accept your tax relief claim" is not much if anything to go on. You could go running to daddy (sorry the tax courts) shouting, sir, sir, HMRC don't like what I'm doing. But if you got a letter from the bank saying they didn't like the way you ran your overdraft is not the same as saying you are in breach of the conditions of your overdraft so we're adding penalties. The former would probably get ignored for good reason whilst the latter would have you hopping mad if you didn't agree.

Quite a difference don't you think?

[northernSoul]

So whilst your considerations are well thought out, don't think for a minute that HMRC did not in fact create this law.

..

If you blame someone for firing a gun, you should also look to find where they got it from.

Try telling the courts that HMRC passed the law - you'll get nowhere with that one! The fact that they had input is neither here nor there. The moment the queen's moniker hit the papyrus, HMRC, and it's role in it, is of monumental irrelevance.

No, I don't believe that the directors of Smith and Wesson should be imprisoned if I choose to shoot my next door neigbour. More importantly, the law will, likewise, give such fantasies short shrift.

You can't nudge the HMRC into responsibility for the law. Not only is it patently legally wrong, it assumed that parliament had no opinion on the matter. Parliament has had consistent opinions on tax avoidance : it doesn't like it. And nudgiing, ot trying to nudge HMRC into resposnsibility for the law alters your legal position not one iota.

There have to be rules : and the main rule in the UK is, only the EU and UK parliament pass laws. End of. There is no other interpretation possible. Law is all about rules. Computer people understand rules. You can't get a 'for loop' to behave a different way from week to week. They always behave the same way. That's how computers work. And legal systems are the same : its the rules that count. HMRC can't be constutionally different from week to the next.

[Tax_shouldnt_be_taxing]

There have to be rules : and the main rule in the UK is, only the EU and UK parliament pass laws. End of. There is no other interpretation possible. Law is all about rules. Computer people understand rules. You can't get a 'for loop' to behave a different way from week to week. They always behave the same way. That's how computers work. And legal systems are the same : its the rules that count. HMRC can't be constutionally different from week to the next.

Damned right your can't. But in this case the "for loop" in 2008 is most certainly not the same as the "for loop" in 1987 and yet without changing it (via clarification) it does just that. And I'm sure "computer people" would be all out of work if their "code" or "rules" just kept flipping from one week to the next or in our case from one decade to the next plus 1.

Thanks for clarifying this. Maybe we should take some program code to the SC to prove BN66 is broken and impossible.

[seadog]

Misleading parliament

I havent' seen this forum in a while but I see there is still some confusion over HMRCs constitutional position.

HMRC :-
i) is not a legislator. It did not change the law. Parliament did, the principle legilsative forum of the British people. In reality, Parliament is your opponent in this case.



An opportunity passed up.

Hi Northern Soul

You are technically correct that it is parliament who makes the law, but who puts forward the proposal and who provides the briefing papers to suppoort the case in Parlaiment. Of course its not MP's but the Treasury and HMRC.

If you read the transcrpits of the debates in parliament when S58 was passed you will realise that Jane Kennedy who spoke on the clause has misled Parliament by making statements which to say the least were "economical with the actualite."

The details of this are very complex and many of the facts were delibertly kept from MP's during the debate.

For example HMRC raised enquiries about this scheme in 2000 and went so far as issuing an internal Technical Note 63 to all staff in which they admit they could not challenge the scheme on technical ground.

In other word they accept the users were entitled to the claim but did not like it. Instead of closing the loophole in 201 as soon as they realised it was a loophole, they waited 6 years to bully taxpayers with spurious arguments why the claims were not admissible.

Eventually they agreed to take 4 test cases to the tax courts which is were this should have been decided but knowing they would lose they managed to mislead parliament into passing an unusual retrospective law.

The option to force an enquiry into Jane Kennedy /Stephen Timms misleading parliament is still on the cards. This would reveal more confidential records of the actual devious underhand and misleading information used in trying to get this passed by parliament.

[Tax_shouldnt_be_taxing]

You can't nudge the HMRC into responsibility for the law. Not only is it patently legally wrong, it assumed that parliament had no opinion on the matter. Parliament has had consistent opinions on tax avoidance : it doesn't like it. And nudgiing, ot trying to nudge HMRC into resposnsibility for the law alters your legal position not one iota.

The only other time I can recall anyone saying the HMRC was in HMRC witness testimony. In fact as best as I can recall, I've only ever known somone in HMRC using "the" before HMRC. Looking at your call sign, you don't work in Shipley West Yorkshire do you?

[northernSoul]

The only other time I can recall anyone saying the HMRC was in HMRC witness testimony. In fact as best as I can recall, I've only ever known somone in HMRC using "the" before HMRC. Looking at your call sign, you don't work in Shipley West Yorkshire do you?

Drat ! Foiled at last ! That's right, I've made a point you don't like so I must be a spy.

Carry on nudging HMRC into a legislative cap and see where it gets you.

MP's lawyers need something novel to win, maybe you can tell them your constutional analysis.