BN66 - Court of Appeal and beyond

[Alba]

FORGOT TO ADD the all important part

“I’ve come up with a budget that has reduced the 50p rate to 45p, so we don’t have the highest income tax rate in the world. But I’ve also asked people who are currently paying zero to pay income tax. (Contradiction here me thinks, I thought that he was left shocked finding that the top multi-millionaires pay verry little or no tax at all. What one is it)”

The disclosure that Mr Osborne is now studying individual’s tax returns is likely to add to the pressure on ministers to publish details of their own financial affairs. The Chancellor told this newspaper that he was “very happy” to consider publishing his tax return but the proposal has sparked a Cabinet backlash.

Every cloud has a silver lining, and we may now find most of our MP's to be more understanding and/or helpful of our plight!

George Osborne was left 'shocked' after an analysis of the tax returns of multi-millionaires which he personally ordered found that they are exploiting loopholes to pay little or nothing at all.
By Robert Winnett and James Kirkup (Telegraph)
10:00PM BST 09 Apr 2012

A confidential study by HM Revenue and customs found they are using aggressive avoidance schemes to reduce their income tax rate to an average of 10 per cent - less than half the level paid by the average Briton. (What ever happened to confidentiality?) The Chancellor personally studied the “anonymised” copies of the tax returns submitted by some of the country’s wealthiest citizens which showed some people are able to avoid paying income tax entirely.

The analysis convinced Mr Osborne that millionaires must pay a minimum rate of tax equivalent to about a third of their earnings, which has been described as a “tycoon tax”.

Mr Osborne told The Daily Telegraph: “I was shocked to see that some of the very wealthiest people in the country have organised their tax affairs, and to be fair it’s within the tax laws, so that they were regularly paying virtually no income tax. And I don’t think that’s right. (But it is legal, missing the point again) “I’m talking about people right at the top. I’m talking about people with incomes of many millions of pounds a year. The general principle is that people should pay income tax and that includes people with the highest incomes.

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“I’m not allowed to be shown the names of the individuals but I’ve sat with the most senior people at the Inland Revenue, the people who run some of the high net worth units there. They have given me examples, anonymised examples, and so we are taking action.”

The report found that Britain’s 20 biggest tax avoiders have used three main loopholes to legally (there's that word again LEGALLY) reduce their their income tax bills by a total of £145 million in a year.

Two thirds of them wrote off business losses in one of their companies against their income tax bill, reducing it by as much as half .

Several of them offset the cost of business mortgages or borrowing on buy-to-let properties against their income tax bill, while others took advantage of relief on donations to charity.

The rest of the article is in the telegraph.

[GottaBeOptimistic]

George Osborne was left 'shocked' after an analysis of the tax returns of multi-millionaires which he personally ordered found that they are exploiting loopholes to pay little or nothing at all.
By Robert Winnett and James Kirkup (Telegraph)
10:00PM BST 09 Apr 2012

A confidential study by HM Revenue and customs found they are using aggressive avoidance schemes to reduce their income tax rate to an average of 10 per cent - less than half the level paid by the average Briton. (What ever happened to confidentiality?) The Chancellor personally studied the “anonymised” copies of the tax returns submitted by some of the country’s wealthiest citizens which showed some people are able to avoid paying income tax entirely.

The analysis convinced Mr Osborne that millionaires must pay a minimum rate of tax equivalent to about a third of their earnings, which has been described as a “tycoon tax”.

Mr Osborne told The Daily Telegraph: “I was shocked to see that some of the very wealthiest people in the country have organised their tax affairs, and to be fair it’s within the tax laws, so that they were regularly paying virtually no income tax. And I don’t think that’s right. (But it is legal, missing the point again) “I’m talking about people right at the top. I’m talking about people with incomes of many millions of pounds a year. The general principle is that people should pay income tax and that includes people with the highest incomes.

Related Articles
Tax reform project running into trouble, say experts
09 Apr 2012
Budget 2012: Chancellor George Osborne promises attack on property tax dodge
18 Mar 2012
Budget 2012: Tax avoidance crackdown will target big business
18 Mar 2012
“I’m not allowed to be shown the names of the individuals but I’ve sat with the most senior people at the Inland Revenue, the people who run some of the high net worth units there. They have given me examples, anonymised examples, and so we are taking action.”

The report found that Britain’s 20 biggest tax avoiders have used three main loopholes to legally (there's that word again LEGALLY) reduce their their income tax bills by a total of £145 million in a year.

Two thirds of them wrote off business losses in one of their companies against their income tax bill, reducing it by as much as half .

Several of them offset the cost of business mortgages or borrowing on buy-to-let properties against their income tax bill, while others took advantage of relief on donations to charity.

The rest of the article is in the telegraph.

I think this is good news for us...
"Mr Osborne told The Daily Telegraph: “I was shocked to see that some of the very wealthiest people in the country have organised their tax affairs, and to be fair it’s within the tax laws, so that they were regularly paying virtually no income tax. And I don’t think that’s right. (But it is legal, missing the point again) “I’m talking about people right at the top. I’m talking about people with incomes of many millions of pounds a year. The general principle is that people should pay income tax and that includes people with the highest incomes. "

It strengthens our case for retrospection to be effective from 2008 and to hear the case in the tax courts.

[SantaClaus]

Call to arms

Looks like the govt. are shouting very loudly this morning to drown out any noise about India.

George Osborne: I'm going after the wealthy tax dodgers - Telegraph

I think we need to balance the above story with some comments.


My entry...

Another case of "do as I say, not as I do" from this hypocritical government.

We still haven't forgotten that George Osborne criticised the Indian government for introducing a retrospective tax, whilst conveniently ignoring the fact that the UK government introduced a retrospective tax in Section 58 of the 2008 Finance Act.

This sets an important precedent in tax law, that has gone unreported in mainstream media. Businesses should be aware that HMRC are now free to RETROSPECTIVELY TAX ANY BUSINESS OR INDIVIDUAL IN THE UK ON A WHIM.

[TalkingCheese]

it_contractor/Alan is back

George Osborne: I'm going after the wealthy tax dodgers - Telegraph

copying, pasting and spouting his nonsense.

[SantaClaus]

Hey IT contractor. I made another comment. You better hurry up and reply.

ITContractor, you seem incapable of discussing anything without using emotional arguments to cloud the facts.

Every citizen should have certainty of one's tax situation according to the current law.

Nobody expects tax law to be changed RETROSPECTIVELY and used as some kind of punishment. What message does this send to businesses wishing to set up in the UK?

When India mentioned "Clarificative Retrospective Amendment", they were hinting at HMRC misleading Parliament into passing section 58 of the 2008 as a "clarification" of existing law, when in reality it was a retrospective change to existing law, backdated over 7 years.

Regarding your wild claims that IT contractors earn 150k+ a year. Yes, the odd one does, but most contractor's income when spread over periods of time in and out of work roughly equate to that of a permanent salary.

In addition, most people entered into the aggressive tax avoidance scheme because the govt. of the day introduced IR35 which deemed contractors to be employees, even though they received no sick pay, redundancy or holiday pay. At the time IR35 was introduced, Stephen Timms was on the board of Ovum PLC who were in direct competition with "one man band" IT contractors. He had vested interest in destroying (us) the competition.

May I make a suggestion that perhaps if you feel so badly about nurses, teachers and firemen, you should set aside some of your £150k salary to help them.

Need some recommendations guys. ITContractor is currently on 8.

[OnYourBikeGB]

The Public Arena

As our battle seems to be moving more into the public arena, can I suggest that we exercise a degree of caution in what we say on comments? We will never get support for avoiding tax. Our target must be the unfairness of retrospection. The points in my view that need to be emphasised are:

1) HMRC knew all along that the loophole existed, from the very beginning.
2) That we openly declared we were using it, effectively asking them for comment.
3) HMRC did respond saying they did not believe it to be legal, but actually quoted as a reason why it did. This has been acknowledged in court.
4) We agreed to test our case before the law, and willingly put up test cases.
5) In the seven years HMRC failed to take any legal action whatsoever to close the loophole, which led to other companies adopting it
6) Retrospection was introduced without any warning, and was done so under the guise of clarification, against strong opposition from Gauke and other Lib Dems and Tories.
7) The Government is not prepared to use retrospection, or so it seems, against multi-millionaires because 'to be fair it was legal'. But if it has been applied to us, then it should be applied 'fairly'.
8) We are NOT looking to get off. We want our day in court as agreed with HMRC under the law as it stood and we are prepared as both we and HMRC had agreed, to accept the ruling

There is one other thing that has troubled me for a long time, why did HMRC not act to close the loophole? The technical note makes reference to various technical reasons as to why they could not tackle it, yet they were able to do it easily in 2008. Why did they not do the same in 2001? I suspect there's something behind this, something changed. They didn't need Padmore, they only needed Padmore to smuggle it through Parliament under the guise of 'clarification', effectively to cover their own asses. They could have just stipulated it freestanding. I smell a rat. Before we jump to the conclusion that it's because they are incompetent, I'd point out that so far it's us that has looked like the mugs, not them.

Above all, we must not appear arrogant. We must also appear to be willing to take our medicine if we lose. Joe Public will never side with us, we want to make sure that what we are highlighting is the hypocrisy of Osborne and HMRC, not that we are claiming a right to be tax avoiders. Just my thoughts.

[funjim]

So the 145 million pd question then

Does this mean that hmrc will now close these schemes retrospectively ... In about 5 years from now ... And then charge interest ?

That's the precedent right ?


Hmm bet I know the answer ... Maybe your MP could ask the question ?

[SantaClaus]

Done. 64 posts by tonight though - we need more. Come on chap!

Wow, that's excellent!

If only everybody could post a few comments every time there was a tax article, Section 58 could dominate the Google search results for UK tax.

[taxedermy]

Osborne backs Vodafone on India tax | beyondbrics | News and views on emerging markets from the Financial Times

All:

May I suggest that EVERYONE kindly clicks on the above website and writes a comment. This is a very serious and serendipitous event for us - we must capitalise on it now. When the FT sees how many readers responded, I suspect they will write again in the paper about it, and after all the FT is the world's leading financial newspaper; one of great influence.

DP

...done!

[Alba]

Class System

Hi OYBGB,

I get your point about not being too arrogant, which I am not, and I am sure many others are not. For me I come from the working classes, and found a LEGAL way to be more tax efficient, no crime there.

However, how come for the likes of me, the lower classes, it is seen as unacceptable, but for the top notch or the elite, it is seen as being perfectly LEGAL?

I would like to think that even in these days, most people would support the underdog, in this case I talk about myself.

As our battle seems to be moving more into the public arena, can I suggest that we exercise a degree of caution in what we say on comments? We will never get support for avoiding tax. Our target must be the unfairness of retrospection. The points in my view that need to be emphasised are:

1) HMRC knew all along that the loophole existed, from the very beginning.
2) That we openly declared we were using it, effectively asking them for comment.
3) HMRC did respond saying they did not believe it to be legal, but actually quoted as a reason why it did. This has been acknowledged in court.
4) We agreed to test our case before the law, and willingly put up test cases.
5) In the seven years HMRC failed to take any legal action whatsoever to close the loophole, which led to other companies adopting it
6) Retrospection was introduced without any warning, and was done so under the guise of clarification, against strong opposition from Gauke and other Lib Dems and Tories.
7) The Government is not prepared to use retrospection, or so it seems, against multi-millionaires because 'to be fair it was legal'. But if it has been applied to us, then it should be applied 'fairly'.
8) We are NOT looking to get off. We want our day in court as agreed with HMRC under the law as it stood and we are prepared as both we and HMRC had agreed, to accept the ruling

There is one other thing that has troubled me for a long time, why did HMRC not act to close the loophole? The technical note makes reference to various technical reasons as to why they could not tackle it, yet they were able to do it easily in 2008. Why did they not do the same in 2001? I suspect there's something behind this, something changed. They didn't need Padmore, they only needed Padmore to smuggle it through Parliament under the guise of 'clarification', effectively to cover their own asses. They could have just stipulated it freestanding. I smell a rat. Before we jump to the conclusion that it's because they are incompetent, I'd point out that so far it's us that has looked like the mugs, not them.

Above all, we must not appear arrogant. We must also appear to be willing to take our medicine if we lose. Joe Public will never side with us, we want to make sure that what we are highlighting is the hypocrisy of Osborne and HMRC, not that we are claiming a right to be tax avoiders. Just my thoughts.