BN66 - Court of Appeal and beyond

[Rhydd]

Our approach

The current tax avoiders witch-hunt by politicians and the media means that most members of the public are likely to be against us. There will be lots of people who support IT Contractor’s views and we need to be careful not to stir them up: they are best ignored.
I think that the legal approach and approaching Members of Parliament is the way to go. On the political angle, even MP’s who don’t want to, or don’t have time to get into detail should be uneasy about the potential for political fall-out:
• The unfairness (retrospective for seven years AND interest!) that other voters might fear
• The risk of putting off foreign investors (as pointed out to the Indian government George Osborne)
• Damage from the exposure of MP’s cynicism (Osbourne - Barclays and Vodaphone, Gauke - against s59 but now letting it proceed).
When you go to tell your MP of the impact of BN66 on your family, be aware that he/she will also be seeing heartbreaking cases of refused refugees who are about to be returned to poverty or much worse being forced from homes and children from schools. Sympathy for us might be limited so I’d be inclined to focus on the legal argument and the politics.

[nick4notax]

Just wondering....

If MP's Counsel advises an appeal to the ECHR, Counsel should pay regard to and plead the findings of the EU Study on The Rule of Law, adopted/ratified/accepted by the Venice Commission in April 2011. This is an extract on retrospection in the context of the duty of all Member States to uphold the pillars of the Rule of Law (the one in question here is Legal Certainty) and the Convention on Human Rights.
46. Legal certainty requires that legal rules are clear and precise, and aim at ensuring that situations and legal relationships remain foreseeable. Retroactivity also goes against the principle of legal certainty, at least in criminal law (Article 7 ECHR), since legal subjects have to know the consequences of their behaviour; but also in civil and administrative law to the extent it negatively affects rights and legal interests.

Nosing through our forum's old pages (yes, my train journey is THAT boring!!) and I was wondering how we could be chased according to S58: if you apply S58, then we're all guilty of tax "evasion". But, we cannot be punished for a criminal offence (which tax evasion is) because the "offence" is only now an offence due to a retro law change. Einstein pondered travelling backwards in time risked such paradoxes, so what real hope does Hector have ?!?

[bombaycat]

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.

I agree, I come from a totally poor background and earned everything I have we didn't even have a loo for a few months when I was growing up - I am not making that up. Like many here IR35 pushed me towards using MP, I had always avoided all dodgy sounding schemes that people around me used because I thought it was risky. It really irks me that when ordinary people use schemes its suddenly the worst thing in the world and we need to be punished out of all proportion to anything ever done before. But like you say rich, privileged types seem to get protected and offered respect for wearing the right tie or something, it really pisses me off. The law should treat us all the same, so should the law makers and the law enforcers.

[Tax_shouldnt_be_taxing]

Nosing through our forum's old pages (yes, my train journey is THAT boring!!) and I was wondering how we could be chased according to S58: if you apply S58, then we're all guilty of tax "evasion". But, we cannot be punished for a criminal offence (which tax evasion is) because the "offence" is only now an offence due to a retro law change. Einstein pondered travelling backwards in time risked such paradoxes, so what real hope does Hector have ?!?

'Offence'? Well lets see. We must have 'broken' something in law otherwise HMRC would not issue a CN and demand payment. According to what I have from them I have tax liabilities on my share of the income from a partnership.

That's like saying I've been issued a speeding fine for speeding according to the Highway Code. Err, which bit of it?

s.58 is not tax law and you did not break 'it'. But looking at s.58 it makes many amendments, sorry 'clarifications' to all manner of taxing Statutes, even back to 1970. Golly, I thought this was a 'clarification'. It seems to me that they have done a carpet bombing job of anything that might mean tax avoidance with a partner. So the offence you're being penalised for is speeding under the Highway Code.

The only reason I can fathom for such a 'wide margin of appreciation' is that HMRC don't actually know what Statute applies under law if any even now so they made s.58 nail retro to anything that moved (stuffing others too who have nothing to do with this) and then making a generalised claim to obtain tax from us. Perhaps the Einstein consideration is not too far off the mark in terms of what defines us for such a liability - Light in a wave on Monday, Tuesday & Wednesday. It's a particle on Thursday, Friday & Saturday. On Sunday it's both!

A tax grunt in HMRC didn't invent s.58, an Alchemist did...

[SantaClaus]

I agree, I come from a totally poor background and earned everything I have we didn't even have a loo for a few months when I was growing up - I am not making that up. Like many here IR35 pushed me towards using MP, I had always avoided all dodgy sounding schemes that people around me used because I thought it was risky. It really irks me that when ordinary people use schemes its suddenly the worst thing in the world and we need to be punished out of all proportion to anything ever done before. But like you say rich, privileged types seem to get protected and offered respect for wearing the right tie or something, it really pisses me off. The law should treat us all the same, so should the law makers and the law enforcers.

Ok, I'm going to lay it bare, like I never have before...

I grew up on a council estate and came from a broken family. Often I was sent to school with no dinner money.
Bailiffs turning up at the door for unpaid bills was a regular occurrence, and we never seemed to have enough money for the electric and gas meter. At 15, I had to get a weekend job out of necessity, not for pocket money.

My mother was mentally ill and in and out of hospital. It was a battle in that sort of environment to study for my A levels. Yet somehow despite everything, I managed to get a Computer Science degree and highly paid work in the City. Contracting was a way in through the "back door" in the early days of City work, whereas permanent work required Oxbridge graduates.

So now, the rich elite who run the country and have had everything handed to them on a plate since the day they were born would like to kick me and my family back in the gutter, because they can't bear to see an average person doing well for themselves.

[travellingknob]

Quick question:

Say one was only in the scheme for 1 year - 2007/08

And say the retrospection does get amended to only affect claims after April '08 - would this mean that a tax return submitted in January 2009 (for tax period 2007/08) would be treated retrospectively or not?

Thats an interesting question. As Emigre said lots of guesses and IF's but I'd arrive at 3 different conclusions depending on what exactly was changed :
a) If the whole retrospective clause were deleted then maybe the claim would be valid.
b) However, more in keeping with Padmore would be to accept EXISTING claims are valid but deny any NEW claims are valid after April 08. Thus your 2007/8 return gets caught but earlier ones dont. In fact I think this can be argued regardless whether s58 is amended or not.
c) Of course Rees Rules would find differently again and state the law was only announced in March 08 so claims submitted after the announcemend would be valid but only for the period until the announcement date.

So for the specific tax year 2007/8 potentially 3 very different outcomes.

[p4nd4b34r]

I grew up on a council estate and came from a broken family. Often I was sent to school with no dinner money.
Bailiffs turning up at the door for unpaid bills was a regular occurrence, and we never seemed to have enough money for the electric and gas meter. At 15, I had to get a weekend job out of necessity, not for pocket money

well you were lucky. . There were `undred and fifty of us livin in shoe box in middle o`t road. . .every mornin we had get up, lick road clean wi`t tongue etc. . .

[travellingknob]

"So now, the rich elite who run the country and have had everything handed to them on a plate since the day they were born would like to kick me and my family back in the gutter, because they can't bear to see an average person doing well for themselves."

Sounds like frustration is getting the better of you my friend.
What makes you think 'rich elite' and 'priviledged types' weren't affected by s58 as well ? As for growing up 'poor' so did most of the people in this country and lets not forget that includes many of our MPs. Its irrelevant.

Retrospective taxation is the issue, not who it affects nor how badly it affects them. It may help our case to highlight the plight of many who will be bankrupted but lets not jump on the current bandwaggon of blaming 'the rich'.

The blame rests squarely with those HMRC officials who mislead government, the managers that first incentivised them to do so and the government that passed legislation with ill thought out consequencies !

[BrilloPad]

I got my montp letter last night - confirmed my view they are a bunch of twunts. Well - JC and WG are. They are very bad at communication. And why put the ball in our court? The letter should of said that anyone who wants to settle is mad and should get a CTD if they can.

Having said that, they are the only bunch of twunts we have and they are still fighting our case.

[travellingknob]

Nosing through our forum's old pages (yes, my train journey is THAT boring!!) and I was wondering how we could be chased according to S58: if you apply S58, then we're all guilty of tax "evasion". But, we cannot be punished for a criminal offence (which tax evasion is) because the "offence" is only now an offence due to a retro law change. Einstein pondered travelling backwards in time risked such paradoxes, so what real hope does Hector have ?!?

Yes I believe this forms the basis of a legal argument that in fact s58 can only apply to claims post March 2008 (Rees). Pre that date transactions were made under tha law of the day. Returns were submitted under the law of the day. They cannot be judged under a law that did not exist.
Under this arguement, Only transactions made and/or returns submitted after s58 was announced (Rees) can be judged under the s58 law - the retrospective element only applies to claims that had not been submitted.
If this could be a winning arguement, I hope your previous years tax returns were all up to date.
On the downside this arguement also acknowledges that s58 would apply to your 2007/8 return. However, it also needs to be decided if in fact s58 even applies to the Montp scheme.