BN66 - Court of Appeal and beyond

[Tax_shouldnt_be_taxing]

I normally don't encourage detractors from entering these threads* but as you've tried to draw us into your fight I'm letting them through.

Be aware though that you have now changed the nature of this thread into a debate as opposed to a support.


*(don't confuse a couple of threads with a whole forum, though I recognise that many have this thread on speed dial and don't realise that there is a CUK world out there)

Outrageous!

Everybody knows Kojak starts with a K...

Unless you mean this:

Cojak Hanzi Dictionary: Unihan Hanzi Radical Chart

Nope, I don't get that either. Good weekend to you anyways.

[AtW]

I've made some extra-ordinary effort to resist posting in threads like this for at least 18-24 months, and I do feel pathetic for breaking up and doing it

cojak is right though - the moment you called for PR and "fellow" small business owners you've invited other people, weak excuse but true.

Didn't realise the "wide margin of appreciation" involved!

Would you mind giving an answer to very specific question, namely effective rate of tax you paid whilst (I assume) being part of this scheme? It's a very simple question and HMRC already should know all details.

Is it 3.5% at the judge said in recent ruling? 5%? 20%? Why won't you have a poll on here asking all members of that scheme to say what's their effective rate, this might be very useful because based on recent ruling 3.5% figure is what most people will assume.

It's not an unreasonable question really given that you plan to do your PR campaign. I don't really want to post more in this thread, so I assume you won't answer it, which in itself will speak louder than all your legal words.

By the way, in all my dealings with HMRC (asking questions over the phone) on variety of subjects they were fairly quick to get through (I can name lots of private companies that took FAR longer to get to clueless person on the phone), they were quick and helpful, when they could not answer my question they put me in touch with someone who could. To be fair though I never tried to claim black is white and that 3.5% of tax should be paid on what other people (like myself) would pay 40%+NI.

It is possible that I am wrong, HMRC is wrong, Parliament is wrong, courts are wrong and you might win it in Supreme Court or maybe even European Court, for some of you keeping the fight is better than surrender, I can understand that, however you really need to realise that even if you have law on your side (which so far it isn't and I can't see how it will be), then you still can't claim any kind of high moral ground, especially when it comes to other small businesses who pay full whack of taxes (which are too high for sure, but those who pay at 3.5% effective rate only make others pay more).

Stick to your technicalities, retrospection etc, but don't try to claim "The Moral High Ground" because you don't have any.

Apologies to mods and admin, I really did not want to post here, made myself stop at least 30 times

P.S. Say hi from me to brillopad next time you see him, I don't support him in this fight but I would certainly support him on divorce/kids front.

[AtW]

Probably best to ignore today's visitors.

If you ever go on the General threads you will know why.

I don't agree with your position, but I like you anyway - you sure have soul of a warrior.

It's a pity you are fighting for the wrong cause. I have to say you've become more defeatist recently (questioning your own position), the last judgement is sure hard one but I am sure you know that chances ain't good fundamentally.

I wish everyone paid lower taxes, especially people who take big risks by setting up businesses, hell I wish everyone would pay 3.5% of income tax - lower taxes across the board for everyone!!!

The keyword is everyone though, the difference between 3.5% and 40% (or even 20%) is just way too high, HMRC and courts simply had no choice but to deal with such threat to tax revenues. The court judgement says it very clearly in the judgment.

btw, there are a lot of very decent people in General who might want to fool around but they are very good decent people. You don't get invaded here often because they are very decent and afraid very much of mods banning them ...

[AtW]

Last post here before I get banned for real (unless Mr "I Paid Correct Tax To the Penny" posts his effective tax rate)...

You've used artificial technicalities to make your claim (in my view).

It's possible HMRC did the same to beat you (again, in my view).

You might not like it because you lost, but the truth is that you have no moral highground whatsoever: they may have used against you the same weapon (only more deadly) than you tried to use against them.

[bananarepublic]

You might not like it because you lost, but the truth is that you have no moral highground whatsoever

I was in the scheme for several years and have a large liability to say the least. I agree with you regarding moral high ground and the ridiculous notion of a PR campaign.

However, when did morality come in to this? I don't have a moral obligation to maximise my tax bill. The scheme was aggressive, yes, but so was IR35. At the time I joined (2001) it just seemed like the opposite end of the spectrum. I was cross.

I dont think a government most of whose members were caught with their hands in the till (MP expenses) are in any position to lecture us. But lets not go into moral equivalence!

As far as I am aware I followed the laws prevailing at the time. That is my obligation. The question is whether the government acted legally in changing the law. I don't feel any particular reason to justify myself morally.

[OnYourBikeGB]

And that, ladies and gentlemen, sort of sums up the difficulties we would face if we try to get popular support for ourselves. It ain't going to happen. Putting aside our own sorry situation though, there is a bigger issue here, and that is that retrospective taxation without warning backdated against anyone or any company for 6 years is wrong. Especially when a legal process to resolve the dispute had already been agreed. We never hid anything, we never lied. I know there are companies out there that are getting crushed by the tax burden, I know there are many companies out there small and large that are using legal tax planning (HMRC themselves have) to avoid the burden. I'd be curious to know how many businesses use no tax planning whatsoever and pay the maximum tax they can, versus the number who try to lower their tax burden. We're all somewhere on the scale, some further out than others. Our fight, is our fight alone, I suppose. I welcome other views, it does add perspective, because, let's face it, in here, we only hear mainly our own opinions most of the time and we have so much to lose and the loss would be so unbearable for most if not all, it is difficult to see us through others eyes.

That said, there is a genuine threat to business here. A victory for HMRC in the SC is a threat to many, many businesses that seek to legally reduce their tax burden. That's a fact, no matter what you think about us. That HMRC can seemingly backdate those taxes to a time of their choosing and a business that is prosperous on one day can the very next day have been in a state of bankruptcy due to not only the claimed tax, but years and years of added on interest, simply cannot be right, especially where no lies have been told, no figures hidden and a process to resolve a dispute has already been agreed. There's a human cost too, in stress, depression, marital breakdowns and divorce.

I do not have a lot of confidence in a victory in SC and am resolved to paying up and moving on. Many people will think we are getting what we deserve, and no amount of pointing out the unfairness in how we have been treated will convince them otherwise, but there are many, many businesses that may have this on their own doorstep in the future. I believe that popular support is impossible, though widespread concern and pressure over the use of retrospective taxation is a possibility. And if we don't succeed then we will have to face the consequences of our actions and many more may face the consequences of their inaction when they could have made a difference.

[OnYourBikeGB]

However, when did morality come in to this? I don't have a moral obligation to maximise my tax bill. The scheme was aggressive, yes, but so was IR35. At the time I joined (2001) it just seemed like the opposite end of the spectrum. I was cross.

I dont think a government most of whose members were caught with their hands in the till (MP expenses) are in any position to lecture us. But lets not go into moral equivalence!

[AtW]

I was in the scheme for several years and have a large liability to say the least. I agree with you regarding moral high ground and the ridiculous notion of a PR campaign.

We are in agreement.

I ain't going to preach morality of paying "full whack" of taxes, all I am saying is that those who choose to take risks to reduce them massively are playing with fire and HMRC/Govt/court have no choice but to deal with it, they might as well disband themselves if it is upheld that paying effective 3.5% tax is ok (even if it's a temporary loophole).

There is tax planning and there is taking the piss: issueing challenge to the State who has got FAR more resources than anybody else is crazy.

I understand very clearly that some or even many people who got into that scheme risk losing house and it will completely fook over their life - I don't feel pleased about it, I think that HMRC would make a smart move if they offer reasonable settlement, the problem is that their options become more limited as this battle becomes higher profile, and really, it becomes more and more difficult to settle it as they keep winning court cases. Would you settle easily in their case, would you really?!?!

I hope there will be a settlement with HMRC that would deal with this problem.

P.S. I am got nothing to do with the scheme or HMRC or courts, all of the above is my personal opinion.

[AtW]

That said, there is a genuine threat to business here. A victory for HMRC in the SC is a threat to many, many businesses that seek to legally reduce their tax burden. That's a fact, no matter what you think about us.

This sounds like a reasonable position until you check facts of the case: just how many businesses are resident in UK, do work in UK for UK based client, yet expect offshore entity to get the money and pay 3.5% effective tax (in words of the recent judgement), how many small UK businesses can relate to it? I reckon most of those who can are in this thread because they are directly affected by this specific judgement.

As I said I hope HMRC will be sensible enough to offer reasonable settlements once the issue settled by courts.

Good luck.

[bananarepublic]

We are in agreement.

I ain't going to preach morality of paying "full whack" of taxes, all I am saying is that those who choose to take risks to reduce them massively are playing with fire and HMRC/Govt/court have no choice but to deal with it, they might as well disband themselves if it is upheld that paying effective 3.5% tax is ok (even if it's a temporary loophole).

There is tax planning and there is taking the piss: issueing challenge to the State who has got FAR more resources than anybody else is crazy.

I understand very clearly that some or even many people who got into that scheme risk losing house and it will completely fook over their life - I don't feel pleased about it, I think that HMRC would make a smart move if they offer reasonable settlement, the problem is that their options become more limited as this battle becomes higher profile, and really, it becomes more and more difficult to settle it as they keep winning court cases. Would you settle easily in their case, would you really?!?!

I hope there will be a settlement with HMRC that would deal with this problem.

P.S. I am got nothing to do with the scheme or HMRC or courts, all of the above is my personal opinion.

Perhaps if the government had felt so strongly about what we did they shouldn't have waited 6 years to deal with us. They knew precisely what was going on from around the end of 2001 and could have figured out who was doing it because we told them! They let the situation get out of hand. The retrospection was their get out of jail free card.

The tax rate seems a bit low, but the 'take home' was around 85% including fees. I am sure a well known retailer manages better than that!

In my case the government has had most of my money any way during this time because I bought CTDs a long time ago.

For other people they reopened returns years after they had been accepted. This seems plain wrong as how can they plan retrospectively for a tax charge when their circumstances have changed - for example there is at least one case of a chap getting divorced. Don't think the courts will let him retrospectively change the settlement.

This is less black and white than you make out. But as I said lets not argue about morality.

Perhaps we are the pathological case here but this case will set a very important precedent.