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

[swede]

MPs reply received.

Along with standard letter from Gauke.

Will now sort out arranging to go and see him - he was a Member of the Treasury Select Committee back in 2006-7.

[LisaContractorUmbrella]

LisaContractorUmbrella has made this post and I hope won’t mind too much if I pull out a couple of points.

The first thing is that this is taken from an HMRC webpage. As far as I can tell the link is Code of Practice 8 cases: Identification of Code 8 cases: Tax avoidance

This is a current publication, it is not the information that HMRC made available in 2001 or 2002. In other words, it is not information that was available when people had the power to make a choice. It is close to useless to pull up a modern document and say, “well you should have read this”. It wasn’t available.

The page is discussing ‘avoidance’ but the fact is that the scheme we’re talking about did not fit into any definition of avoidance that was current at the time. It did not fit into HMRCs definition and it did not fit in to the OECD definition. There is a good reason for that, and I’ll come back to that later in my post.

As we’re being presented with ‘HMRC guidance’, it is worth considering what it is worth. The recent Gaines-Cooper case found that HMRC guidance has no legal force and HMRC are not required to follow it. So here we have a second reason to doubt this ‘advice’.

Even if we overlook both of those points, and read the HMRC advice NOW being offered – can you see any clear guidance in the article? It is caged in woolly language – we even have an out of context quote which adds very little to what it says. It would be as well say, “got any money? Hand it over.”

Now, the reason that the scheme was not caught by any definition of avoidance is because the UK assigned their taxing rights to the Isle of Man. The UK made a treaty with the IoM that said that in these circumstances it would be the Isle of Man who would have the right to levy tax and not the UK. The scheme did not work by accident – it was not a loophole in that sense. It was by government design.

You might say that it was not intended to be used in the way that it was. But that’s missing the point – the UK knew that the scheme was possible in the 1990s and they knew that it was in use in 2001. They didn’t do anything about it and in fact their behaviour suggested that they had decided to tolerate it. States (the UK) often do tolerate such things. Take charity donations – the UK have been fully aware that wealthy people were choosing to make massive charity donations rather than pay income tax for a long time. They have tolerated it for a long time.

Our complaint is not that the law has changed, but that is has changed retrospectively. I had no warning that this was going to happen despite a warning being part of both HMRCs and Parliaments published policy.

But it’s not just that. We were open and honest. HMRC never asked many questions about the scheme because they already knew all the details of it. Our, the scheme users, behaviour was above reproach. Could HMRC say that? I doubt it. Their justification for s.58 was at best deceptive, and at worst a downright lie.

My most recent letter claimed that the Courts had examined the scheme and found that everything was fine. Once again, the point is missed. We are talking about Parliament being misled. Again and again the courts have said that if Parliament is misled then it is for Parliament to remedy that. They did not examine this at all.

So, as I have said before, this is nothing to do with tax avoidance. The question we have is whether it is okay for HMRC to wilfully mislead the legislature of our country?

You are exactly right about where this came from and the salient point (I think) 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’.

This is the whole thinking behind retrospection - basically it doesn't matter whether or not parliament did enter something into law; they can use the argument that they would have done if they had thought about it.

[swede]

You are exactly right about where this came from and the salient point (I think) 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’.

This is the whole thinking behind retrospection - basically it doesn't matter whether or not parliament did enter something into law; they can use the argument that they would have done if they had thought about it.

That sounds fair - if you ask them to apply the facts that were applicable at the time.

[DonkeyRhubarb]

You are exactly right about where this came from and the salient point (I think) 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’.

This is the whole thinking behind retrospection - basically it doesn't matter whether or not parliament did enter something into law; they can use the argument that they would have done if they had thought about it.

In other words, Tax Law as written down in statute cannot be relied upon.

That send a great message to anyone thinking of investing in the UK.

Caveat Emptor - enter this country at your own risk.

[moira under the stairs]

You are exactly right about where this came from and the salient point (I think) 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’.

This is the whole thinking behind retrospection - basically it doesn't matter whether or not parliament did enter something into law; they can use the argument that they would have done if they had thought about it.

...and you would endorse, support, except or find this 'Fair' ....whoops there's that word again.

[Tax_shouldnt_be_taxing]

You are exactly right about where this came from and the salient point (I think) 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’.

This is the whole thinking behind retrospection - basically it doesn't matter whether or not parliament did enter something into law; they can use the argument that they would have done if they had thought about it.

HMRC manuals also state 'guidance' that they will act swiftly to close down loopholes whenever they are found. Enough said.

[greybob]

Reply received from MP

...with standard reply from David Gauke.
He is a tory minister - ed v@izey. He had admitted to knowing nothing about S58 and so just forwarded my letter onto DG. I'm drafting my response and want to encourage him to actually look at the evidence rather than just be a condiut between me and Gauke/HMRC. Which single document from the NTRT site should I include (I dont want to scare him off with a deluge of paperwork). My initial thought was N002 (selected quotes from DG). Were all these quotes from the March 2008 budget debate? Any suggestions welcome.

[TalkingCheese]

...with standard reply from David Gauke.
He is a tory minister - ed v@izey. He had admitted to knowing nothing about S58 and so just forwarded my letter onto DG. I'm drafting my response and want to encourage him to actually look at the evidence rather than just be a condiut between me and Gauke/HMRC. Which single document from the NTRT site should I include (I dont want to scare him off with a deluge of paperwork). My initial thought was N002 (selected quotes from DG). Were all these quotes from the March 2008 budget debate? Any suggestions welcome.

- A001 if you havent given that already
- and then I would also let him have copies of the HMRC correspondence when you were first told they did not accept the scheme and were asked to make payment on account (May 16th 2007 probably).
- Maybe the one before saying they want to make sure you dont pay too much or too little tax (November 2006), showing they didnt reject it then

This will highlight the misinformation that is being handed out in this standard letter. Maybe even the nice piccy on here: Latest News | No To Retrospective Taxation

[Toocan]

You are exactly right about where this came from and the salient point (I think) 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’.

This is the whole thinking behind retrospection - basically it doesn't matter whether or not parliament did enter something into law; they can use the argument that they would have done if they had thought about it.

They did think about it, as I said in my post they assigned taxing right to The Isle of Man. Then, in 1987, in Parliament, the then Norman Lamont accepted that schemes such as this would exist.

The justification you suggest is not valid in this case. If it were, I doubt retrospection would have been needed.

Once again I repeat, this is not about tax avoidance.

[DonkeyRhubarb]

...with standard reply from David Gauke.
He is a tory minister - ed v@izey. He had admitted to knowing nothing about S58 and so just forwarded my letter onto DG. I'm drafting my response and want to encourage him to actually look at the evidence rather than just be a condiut between me and Gauke/HMRC. Which single document from the NTRT site should I include (I dont want to scare him off with a deluge of paperwork). My initial thought was N002 (selected quotes from DG). Were all these quotes from the March 2008 budget debate? Any suggestions welcome.

In terms of HMRC always maintaining that the scheme didn't work, here are 2 pieces of evidence which contradict this.

1) Jane Kennedy's statements to Parliament. Search for the word "flouts".
http://notoretrotax.org.uk/public-do...lause%2055.doc

2) HMRC's evidence to the High court. See page 7, point 20.
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