BN66 - Court of Appeal and beyond

[centurian]

One thing recent posts demonstrate is what we'd be up against with any PR activity.

And that's against people who are not overly adverse to the general idea of tax avoidance.

So just imagine what it would be like against the hardcore mob.

[DonkeyRhubarb]

So just imagine what it would be like against the hardcore mob.

Yes, I know.

We're the lowest of the low.

Worse than rioters and looters
Worse than rapists and child molesters
Worse than murderers
Worse than terrorists

Bring back capital punishment for tax dodgers!

[seadog]

The repercusions of retrospective tax legislation.

And that's against people who are not overly adverse to the general idea of tax avoidance.

So just imagine what it would be like against the hardcore mob.

Many people have been quick to say tax avoiders deserve all they get, but the manner in which HMRC have contrived to get this retrospective legislation passed into law should worry the wider business community. Just consider what HMRC will achieve is this finally becomes a precedent.

In 1987 post Padmore they knew about a potential loophole. In 2001 (TN63) they knew about the loophole but chose not to close it. Then 6 years later they clarify the legislation without having it tested in a tax tribunal to reclaim tax and interest

So next time HMRC see what they think is loophole they just quote Huitson and introduce more retrospective legislation and go back to reclaim tax and interest for 6 years.

Let me give you a case to illustrate my point.

Many people use companies to pay a small salary usually around £5,000 and then pay large dividends to shareholder directors.

A very common practice which HMRC disapprove. With S58 behind them what is to stop HMRC suddenly clarifying that directors who are shareholder on say non PLC companies are not entitled to a dividend and they are going to go back 6 years with retrospective tax.

Another example, perhaps closer to home. IR35 tries to clarify the meaning of employment etc. What if HMRC just decide on a new definition of employment as a new catch all definition, no reference to a tax tribunal to test the clarification, just a reference to the Huitson precedent and away they go.

So having achieved success with this case the door is finally open for them to clarify retrospectively at will.

Chickens will then come home to roost but it will be too late. S58 will be the law. When BN66 was introduced that was the proper time to protest, but its still not too late. lets hope the Supreme Court can see the wider picture and the full extent and repercissions this will set if it allowed to stand.

[bve534]

Advertisement in newspaper

One thing recent posts demonstrate is what we'd be up against with any PR activity.

I was never particularly enthusiastic about the idea but now I'm even less so.

In any case, 24 votes is nowhere near enough to raise the kind of money needed to fund such a campaign.

24 people paying around £1500 each would pay for a full page spread in a national newspaper. A half page spread in the business section would probably come in at a lower cost. I was never suggesting a PR "campaign" just trying to find some means of broadcasting the fact that a legal precedent for retrospective taxation is probably going to occur in the UK either through the Gaines-Cooper case or our case. I have spoken to the Gaines-Cooper team but they are not allowed to do anything that might prejudice the SC case, which seems rather strange when we would simply be stating the current facts. Obviously that says the Govt and judiciary want to keep it all as quiet as possible. Fortunately Gaines-Cooper does have a PR team and had achieved wide publicity. if you go to his website it echoes our own statements on retrospective changes/amendments/re-interpretations on tax law
Regards

[DonkeyRhubarb]

I was never suggesting a PR "campaign" just trying to find some means of broadcasting the fact that a legal precedent for retrospective taxation is probably going to occur in the UK either through the Gaines-Cooper case or our case. I have spoken to the Gaines-Cooper team but they are not allowed to do anything that might prejudice the SC case, which seems rather strange when we would simply be stating the current facts.

The Gaines-Cooper team are right to be wary. Such an advert could be seen as criticising or trying to influence the judiciary.

It isn't quite just stating the facts because we'd be claiming that a judgment in favour of HMRC sets a legal precedent for retrospective taxation. So far, the courts have not said anything about this.

It may seem obvious that it sets a precedent but that is something I am sure the Supreme Court will want to address.

Incidentally, the SC judgment in Gaines-Cooper will be interesting because, like us, he got absolutely thrashed in the HC and CoA.

[smalldog]

As was debated in parliament, there was concern this was the thin end of the wedge and that it would open the floodgates to other retrospective tax measures. Kennedy at the time said it would only be used in exceptional cases, what constitutes exceptional exactly?

Whatever your views are on moral grounds this is dangerous territory, Im not scaremongering but HMRC should not be allowed to get away with this as it absolutely sets a legal precedent. And dont give me the whole "parliament voted it in" marlarky, HMRC constructed the story and the legislation.

I for one wouldnt want the risk that HMRC have this in their back pocket and can use this legal precedent in the future to justify other measures.

[DonkeyRhubarb]

I for one wouldnt want the risk that HMRC have this in their back pocket and can use this legal precedent in the future to justify other measures.

It's not HMRC you need to worry about.

Imagine if Labour got back in and Ed Balls was Chancellor.

[Tax_shouldnt_be_taxing]

Good Eavens!

Took a look in after a nice weekend and saw the many posts on this THREAD from what I said last week. Didn't realise I could get people motivated like that!

Anyways, apologies to all on saying "Forum" instead of "thread". Subtle difference in terms of what I meant but clearly a big enough difference to get people up in arms. A Bit like "clarification" and "change". Anways I digress. I'm not going to go further on the points I raised. Actually, I wasn't and don't expect the good folks of UK Plc get get behind us and support us or agree with us. What I was referring to was what the future impact of s.58 being ruled on in HMRC's favour at the SC.

Defense against "Huitson -v- HMRC" in the future?
Legal? - Nope
Transparent? Nope

Defense for "Huitson -v- HMRC" in the future?
Were told HMRC did not agree with you without stating why? Yep
Told to pay on account? Yep

So you see, long after we have all gone away, you're left with a potentially dangerous precedent. And the Government didn't move on BN66 because of 3.5%. That would always have been the number. What they did use to move to enact BN66 was the "substantial amount" of monies at risk.

So in the future, someone uses the law to pay say 32% tax instead of the "fair share" which according to some is 40%. They submit their SAR's and get a "Padmore Paper" from HMRC about not agreeing and the like, just as like in 2002 onwards. Well perhaps, if it was just one person, then no bother, not much at risk. After all, it's only 8% less than the "fair share", so possibly not enough to launch the "Huitson Hostility weapon". But then loads of folks start using it and all get the same HMRC letter. And finally a few years later, some mega dude, uses it to claim say 60M of tax relief using 32%.

What then? Launch Huitson? Well some think not since it's only 8% difference whilst ours was 36.5%. See the problem? At what point does the difference become the issue? There's nothing in this case that says what it is. But take that scenario above and play it out.

It's not about folks supporting us or siding with us, it's about fighting against what this ruling could mean to any number of folks in the future.

Would the scenario I describe above ever happen. Well I can't see that it could now but...

This is the whole problem with retrospective anything were transparency was always in play. If you end up doing something they don't like, they just have to tell you and suggest you pay on account. But it's clear that this subtle point falls on deaf ears, but it's a point nonetheless and the SC might be the only place where that gets considered.

Right, I'll put the hot cake back in its box...

[DonkeyRhubarb]

We'll never convince many people that BN66 sets a dangerous precedent.

On the contrary, the majority would probably regard the precedent as a good thing - it gives HMRC/Govt the backing of the courts to clobber more people like us.

If the SC upholds the CoA, then I'm sure there will be calls for more retrospective legislation to counter tax avoidance.

[screwthis]

Will retrospective taxes affect us all?

I don't remember seeing this at the time so is a first read for me.

BBC News - Will retrospective taxes affect us all?

She raises the same concerns DR and TSBT have, namely "Is it the thin end of a very dangerous wedge, allowing HMRC to get its own way without bothering to argue its case in the courts? "



I think this excerpt accurately reflects why most of believe we have been singled out unfairly...

"He [Huitson] thought the scheme was legal, and so did his advisers.

HM Revenue and Customs (HMRC) did not agree.

So far, so commonplace: HMRC frequently disagrees with taxpayers.

If these disputes cannot be settled, both parties often end up in court, where each side puts forward their argument.

Sometimes HMRC wins, sometimes the taxpayer.

Section 58

In 2008 the government changed the rules. "


Also nice to see Parker actively discouraged any compassion wrt collection.