No To Retro Tax – Campaign Against Section 58 Finance Act 2008

[DonkeyRhubarb]

Cameron vows not to mix with tax avoiders :: Contractor UK

“There’s always been a distinction between tax evasion and tax avoidance,” the PM said. “[But] there is a form of aggressive tax avoidance which I do think is wrong and people shouldn’t take part in.”

Unless members of family, inner circle or the cabinet that is .......

In a way that's fair enough. The mood has changed.

This certainly wasn't the climate when I was in the scheme 2001-3.

We are not arguing about now. We are arguing about what happened a decade ago.

There isn't an option for us to go back in time and change our behaviour then to suit the current moral climate.

This is one of the paradoxes of retrospective legislation.

[Toocan]

The NTRT was getting some knocks in another forum... it's typical that the ill informed have an opinion on a subject they have relatively little knowledge of.. seems a case 'if I can't you shouldn't' in most cases#

Retrospective taxation campaign

They probably think this is about tax avoidance. It's not.

Anyone who thinks this is about avoidance should read up on what HMRC have done.

This was not a secret or contrived scheme. It was HM Inland Revenue who published the scheme in the 1990s in their tax handbook.

Really, if they changed their mind they had a Finance Act every year, sometimes more often.

It is disappointing that people would have a go at us without bothering to even try to find out the truth. When the details are explained, every single person I have spoken to has been shocked by what HMRC are trying to get away with here.

[DonkeyRhubarb]

This was not a secret or contrived scheme. It was HM Inland Revenue who published the scheme in the 1990s in their tax handbook.

References here in Members docs:
Join Now | No To Retrospective Taxation
Join Now | No To Retrospective Taxation

[BrilloPad]

It is disappointing that people would have a go at us without bothering to even try to find out the truth. When the details are explained, every single person I have spoken to has been shocked by what HMRC are trying to get away with here.

Personally I use the analgy of doing 28 in a 30 zone then the following day limit is retrospectively changed to 25. My friends are thicker than your friends and need a simpler example.

[moira under the stairs]

Personally I use the analgy of doing 28 in a 30 zone then the following day limit is retrospectively changed to 25. My friends are thicker than your friends and need a simpler example.

...... My friends are thicker than your friends....

[LisaContractorUmbrella]

SCIG04150 - Code of Practice 8 cases: Identification of Code 8 cases: Tax avoidance

‘Avoidance’ is not defined in the Taxation Acts and attempts to define it have not in the past been successful. One definition is ‘a situation where less tax is paid than Parliament intended, or more tax would have been paid, if Parliament turned its mind to the specific issue in question’. At a practical level the problem is then essentially one of deciding what Parliament would have intended and identifying who should be asked to decide this.

This highlights an important issue. All fiscal authorities are becoming less and less concerned with fine distinctions between tax planning and tax avoidance and more and more concerned with the effect on the yield to the Exchequer.

That said, Inspectors need to have in simple terms a working concept of ‘avoidance’ in order to properly identify cases which can be worked under Code 8.

The starting point should be that one would normally expect taxpayers to pay tax on their income or profits. Although, in Ramsay v CIR (54TC101) Lord Wilberforce reaffirmed that taxpayers are entitled to arrange their affairs to effect reductions in their tax liabilities, it is reasonable to assume that where a commercial transaction is carried out in a particularly convoluted way, then avoidance is afoot.

Although tax planning is legitimate and arrangements to avoid specific charging sections or to maximise tax allowances, reliefs or exemptions may be perfectly acceptable, it does not follow that this planning always works. An example of an unsuccessful attempt to gain a tax advantage is to be seen in the case of Magnavox Electronics Company Limited v Hall at 59TC610 where the taxpayer simply sought to ensure that a chargeable gain made on a sale to a replacement purchaser arose in the same accounting period as a gain on the sale under the original contract would have done.

In relation to a tax planning scheme Tucker J approved the HMRC challenge (in the Roux case) saying “the taxpayer entered into these schemes presumably after taking professional advice, in the full knowledge of what was involved and with the sole object of avoiding payment of tax. He must have known, or must be presumed to have known, of the risks of Revenue disapproval [of the Pension Scheme] and of all that involved, but he must have considered the fiscal advantages sufficiently attractive to warrant the taking of the risk”.

[moira under the stairs]

SCIG04150 - Code of Practice 8 cases: Identification of Code 8 cases: Tax avoidance

‘Avoidance’ is not defined in the Taxation Acts and attempts to define it have not in the past been successful. One definition is ‘a situation where less tax is paid than Parliament intended, or more tax would have been paid, if Parliament turned its mind to the specific issue in question’. At a practical level the problem is then essentially one of deciding what Parliament would have intended and identifying who should be asked to decide this.

This highlights an important issue. All fiscal authorities are becoming less and less concerned with fine distinctions between tax planning and tax avoidance and more and more concerned with the effect on the yield to the Exchequer.

That said, Inspectors need to have in simple terms a working concept of ‘avoidance’ in order to properly identify cases which can be worked under Code 8.

The starting point should be that one would normally expect taxpayers to pay tax on their income or profits. Although, in Ramsay v CIR (54TC101) Lord Wilberforce reaffirmed that taxpayers are entitled to arrange their affairs to effect reductions in their tax liabilities, it is reasonable to assume that where a commercial transaction is carried out in a particularly convoluted way, then avoidance is afoot.

Although tax planning is legitimate and arrangements to avoid specific charging sections or to maximise tax allowances, reliefs or exemptions may be perfectly acceptable, it does not follow that this planning always works. An example of an unsuccessful attempt to gain a tax advantage is to be seen in the case of Magnavox Electronics Company Limited v Hall at 59TC610 where the taxpayer simply sought to ensure that a chargeable gain made on a sale to a replacement purchaser arose in the same accounting period as a gain on the sale under the original contract would have done.

In relation to a tax planning scheme Tucker J approved the HMRC challenge (in the Roux case) saying “the taxpayer entered into these schemes presumably after taking professional advice, in the full knowledge of what was involved and with the sole object of avoiding payment of tax. He must have known, or must be presumed to have known, of the risks of Revenue disapproval [of the Pension Scheme] and of all that involved, but he must have considered the fiscal advantages sufficiently attractive to warrant the taking of the risk”.

If that's the case why wasn't our scheme allowed to go forward to the Tax Commissioners in 2007, every individual when submitting their tax return must assume to know the risks of the Revenue disapproving of the submission.... You are guilty until proven Innocent ?

[normalbloke]

Cameron vows not to mix with tax avoiders :: Contractor UK

“There’s always been a distinction between tax evasion and tax avoidance,” the PM said. “[But] there is a form of aggressive tax avoidance which I do think is wrong and people shouldn’t take part in.”

Unless members of family, inner circle or the cabinet that is .......

Perhaps The PM would like to define 'aggressive' in this sense? What's the threshold past which something becomes 'aggressive'? And whilst he's at it, can he define 'fair share' for me and n million other taxpayers?

This is why we have laws, not some random wheel of fortune which turns this way and that, dependent on the prevailing moral climate at the time.

I'd prefer him to criticise the legislators at the time instead of spouting some hypocritical soundbite of the moment.

[PlaneSailing]

Risk

SCIG04150 - Code of Practice 8 cases: Identification of Code 8 cases: Tax avoidance

‘Avoidance’ is not defined in the Taxation Acts and attempts to define it have not in the past been successful. One definition is ‘a situation where less tax is paid than Parliament intended, or more tax would have been paid, if Parliament turned its mind to the specific issue in question’. At a practical level the problem is then essentially one of deciding what Parliament would have intended and identifying who should be asked to decide this.

This highlights an important issue. All fiscal authorities are becoming less and less concerned with fine distinctions between tax planning and tax avoidance and more and more concerned with the effect on the yield to the Exchequer.

That said, Inspectors need to have in simple terms a working concept of ‘avoidance’ in order to properly identify cases which can be worked under Code 8.

The starting point should be that one would normally expect taxpayers to pay tax on their income or profits. Although, in Ramsay v CIR (54TC101) Lord Wilberforce reaffirmed that taxpayers are entitled to arrange their affairs to effect reductions in their tax liabilities, it is reasonable to assume that where a commercial transaction is carried out in a particularly convoluted way, then avoidance is afoot.

Although tax planning is legitimate and arrangements to avoid specific charging sections or to maximise tax allowances, reliefs or exemptions may be perfectly acceptable, it does not follow that this planning always works. An example of an unsuccessful attempt to gain a tax advantage is to be seen in the case of Magnavox Electronics Company Limited v Hall at 59TC610 where the taxpayer simply sought to ensure that a chargeable gain made on a sale to a replacement purchaser arose in the same accounting period as a gain on the sale under the original contract would have done.

In relation to a tax planning scheme Tucker J approved the HMRC challenge (in the Roux case) saying “the taxpayer entered into these schemes presumably after taking professional advice, in the full knowledge of what was involved and with the sole object of avoiding payment of tax. He must have known, or must be presumed to have known, of the risks of Revenue disapproval [of the Pension Scheme] and of all that involved, but he must have considered the fiscal advantages sufficiently attractive to warrant the taking of the risk”.

If the arrangement didn't work, and we don't know for sure it does, then I will ensure the correct tax is paid. My chance to prove this one way or another was removed by s58.

The risk of retrospection in this manner was not imparted to me at any point. One of the best lines in the judgement was 'HMRC didn't say they wouldn't act retrospectively' . Well they didn't say they would invade Poland either, so should I expect that?

It is a lie to say this is the same as Padmore. It is plainly a completely different situation. I am upset, and I believe rightly so, that HMRC did not complete the tribunal process as they said they would and instead relied upon a back dated change to fix a problem that they were all to well aware of.

[PlaneSailing]

If that's the case why wasn't our scheme allowed to go forward to the Tax Commissioners in 2007, every individual when submitting their tax return must assume to know the risks of the Revenue disapproving of the submission.... You are guilty until proven Innocent ?

Innocent until someone changes the law.