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

[SantaClaus]

A big thank you to everyone who has recently set up a standing order.

No matter how much it's for, it's hugely appreciated.

I'll second and third that.

[LisaContractorUmbrella]

HMR&C have just announced (RSS feed) that they have today signed an agreement with the Isle of Man which establishes a new disclosure facility, allowing investor in IOM to come forward and settle outstanding tax liabilities http://www.hmrc.gov.uk/news/lsle-of-man-disclosure.pdf (big file 642k)

[Alba]

Homeowners who let to holidaymakers face massive tax attack

Given our predicament, it may be worth Whitehouse following up on the above mentioned (in the main the extract highlighted below) article by Ian Cowie in the Telegraph.

Yes, really. Small wonder, then, that even senior accountants express doubts about changing interpretations of the law. David Rothenberg of Blick Rothenberg told me: “The question which should be asked is to what extent could taxpayers rely on an established pattern of HMRC treatment where HMRC subsequently changed their mind?

“Is it fair to impose tax without any scrutiny by Parliament where even HMRC admit they had previously misinterpreted the law and had published their own incorrect understanding?”

With commendable understatement, George Wade of independent buying agents Property Vision, observed: “I suspect that many holiday homeowners who rent them out when they are not using them will get better at tax planning.”

[Alba]

Why MPs are wrong to blur the legal line between tax avoidance and evasion

Another article by Ian Cowie Your Money of February 19th 2013, that should be read by all, a few pertinent extracts below:

"Tax avoidance is legal, while tax evasion is illegal – an important distinction that most people understand but the House of Commons Public Accounts Committee (PAC) seems keen to blur.

Worse still, it wants to “name and shame” people engaged in the perfectly legal pursuit of trying to maximise that portion of our income we retain, rather than sending it to HM Revenue & Customs (HMRC) so that politicians can spend it for us.

A spokesman for the PAC claims in a written statement issued today: “Promoters of boutique tax avoidance schemes like the one brought to our attention by the case of Jimmy Carr, are running rings around HMRC.

So it is worth quoting a famous judgement more than 80 years ago, by Lord Clyde, President of the Court of Session, who ruled: “No man in the country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or property as to enable the Inland Revenue to put the largest possible shovel in his stores.

“The Inland Revenue is not slow, and quite rightly, to take every advantage which is open to it under the Taxing Statutes for the purposes of depleting the taxpayer’s pocket. And the taxpayer is in like manner entitled to be astute to prevent, so far as he honestly can, the depletion of his means by the Inland Revenue.”

Those general principles remain as true now as they were then. While we are ruled by law, rather than politicians’ dictat, it is simply not good enough for them to claim that tax avoidance schemes are ‘morally wrong’. If so, MPs are well-placed to change the law and make these schemes illegal."

[reckless]

Another article by Ian Cowie Your Money of February 19th 2013, that should be read by all, a few pertinent extracts below:


So it is worth quoting a famous judgement more than 80 years ago, by Lord Clyde, President of the Court of Session, who ruled: “No man in the country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or property as to enable the Inland Revenue to put the largest possible shovel in his stores.

“The Inland Revenue is not slow, and quite rightly, to take every advantage which is open to it under the Taxing Statutes for the purposes of depleting the taxpayer’s pocket. And the taxpayer is in like manner entitled to be astute to prevent, so far as he honestly can, the depletion of his means by the Inland Revenue.”

"

I really like that quotation Alba. It sums up the whole avoidance argument so eloquently and succinctly. All NTRT members should memorise it for future use! It's a pity (I assume) that Lord Clyde is no longer around today - we could have given him an honorary position in NTRT.

[Emigre]

HMR&C have just announced (RSS feed) that they have today signed an agreement with the Isle of Man which establishes a new disclosure facility, allowing investor in IOM to come forward and settle outstanding tax liabilities http://www.hmrc.gov.uk/news/lsle-of-man-disclosure.pdf (big file 642k)

Lisa,

Having read the disclosure facility agreement am I right in thinking that it is targeted at hitherto undeclared assets (and therefore income) in IOM? If so, isn't that a very different thing to our situation where we obtained a DOTAS reference (potentially even where one was not required), and made full declaration on our SARs including full use of the "white space"?

If someone has done that, claimed DTA relief, and NOT had an enquiry opened then surely they are entitled to assume that they are not on HMRC's radar? For those with enquiries open surely we are looking (prior to s58) at a world where there was a difference of opinion over the efficacy of the arrangements and nothing else. Post s58, we may still have a difference of opinion over the efficacy of the application of S58 to our arrangements.

I thank you for the link but at present I do not see that it actually applies to any of us that has given the level of transparency indicated above on our SARs. For those that provided less information then I could see an argument for it becoming a more grey area.

[Ninja]

Tax Hypocrisy

Good quote from Lord Clyde. I have filed it away for later use.

1. David Cameron
David Cameron's family could have money tied up in offshore tax havens after it was revealed his father made a fortune through a network of offshore investment funds.


Ian Cameron, whose wealth was once estimated at £10m, ran several, perfectly legal, offshore accounts in tax havens such as Panama City and Geneva.

The Guardian newspaper reports that Ian Cameron, who died in 2010, left a fortune of £2.74m, from which the Prime Minister personally received a sum of £300,000.

Read more: David Cameron's family fortune 'made through tax-dodging offshore investment funds' | Mail Online

2. Margaret Hodge
Margaret Hodge didn’t take too kindly to being accused of tax hypocrisy by Priti Patel yesterday (20 Nov 2012). The litigious Labour MP and ardent anti-tax avoidance campaigner insists she has done nothing wrong with her shareholding arrangements at 0.01% tax rate paying Stemcor. She has succeeded in scaring off the dead tree press from reporting her arrangements. Guido has been crunching the numbers and it seems Priti is on to something…

Hodge claimed in a grilling by Michael Crick earlier this month (Nov 2012) that “I am a tiny, tiny, tiny shareholder”. Her direct shareholding is 1.26% which, given that Stemcor paid out £4,519,000 in dividends last year, means she received some £56,939. That shareholding alone is worth £1.8 million. Hardly a tiny amount.
Margaret Hodge’s Multi-Million Pound Stemcor Trusts Says £1.8 Million Shareholding is “Tiny, Tiny, Tiny” - Guy Fawkes' blog

[Emigre]

So it is worth quoting a famous judgement more than 80 years ago, by Lord Clyde, President of the Court of Session, who ruled: “No man in the country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or property as to enable the Inland Revenue to put the largest possible shovel in his stores.

“The Inland Revenue is not slow, and quite rightly, to take every advantage which is open to it under the Taxing Statutes for the purposes of depleting the taxpayer’s pocket. And the taxpayer is in like manner entitled to be astute to prevent, so far as he honestly can, the depletion of his means by the Inland Revenue.”

Those general principles remain as true now as they were then. While we are ruled by law, rather than politicians’ dictat, it is simply not good enough for them to claim that tax avoidance schemes are ‘morally wrong’. If so, MPs are well-placed to change the law and make these schemes illegal."

Or similar words by Lord Tomlin...

“Every man is entitled if he can to arrange his affairs so that the tax attaching under the appropriate Acts is less than it otherwise would be. If he succeeds in ordering them so as to secure that result, then, however unappreciative the Commissioners of Inland Revenue or his fellow taxpayers may be of his ingenuity, he cannot be compelled to pay an increased tax” (IRC v Duke of Westminster [ 1936 ] AC1 (HL)).

[Ninja]

Tax Hypocrisy (Part 2)

1. Margaret Hodge (18 Feb 13, The Telegraph)
"Individuals and companies using tax avoidance schemes should be “named and shamed”, according to MPs who lambast the Government for not doing enough to close legal loopholes."
MPs call for tax avoiders to be 'named and shamed' - Telegraph

Starting by naming herself no doubt!

2. David Cameron (19 Feb 13, The Telegraph)
David Cameron launched another broadside at "aggressive" tax avoidance on Monday, on the first day of a trade visit to India.
David Cameron launches broadside at tax avoidance - Telegraph

Another one putting himself forward.....

[travellingknob]

1. Margaret Hodge (18 Feb 13, The Telegraph)
"Individuals and companies using tax avoidance schemes should be “named and shamed”, according to MPs who lambast the Government for not doing enough to close legal loopholes."
MPs call for tax avoiders to be 'named and shamed' - Telegraph

Starting by naming herself no doubt!

2. David Cameron (19 Feb 13, The Telegraph)
David Cameron launched another broadside at "aggressive" tax avoidance on Monday, on the first day of a trade visit to India.
David Cameron launches broadside at tax avoidance - Telegraph

Another one putting himself forward.....

Whilst it may be rather synical for politicians to talk this way, they are perfectly entitled to target avoidance schemes, shut them down and take the moral high grounds on so called 'aggressive avoidance' by sending a clear message to the electorate thats the policies they intend to follow.
I see nothing wrong with the current position many politicians are taking but of course we all know that our scheme operated at a time there was no such focus on this issue which has after all been a problem for the treasury for many decades.
I absolutely support the government tackling tax loopholes and avoidance schemes and closing them down through legal means. I would welcome the level playing field we might one day see at the end of that process. However, the trouble with politicians is that they jump on the bandwagon of today but are slow to implement the changes required. What happened to this catch all law that was supposed to come out of the last budget to tackle such schemes ? Its the perfect example of the fluff and emotive language used but the lack of meaningful action behind it. Naming and shaming someone who has done something perfectly legal is just a preposterous thing to say, I hope the public sees through such rubbish and boots those particular politicians out at the next election. They are worthless.

None of it is relevant to the scheme we followed which was borne out of the IR35 legislation which itself backfired on the treasury to such a point that IR35 actually lost the government revenue rather than generated it. None of the language used today is relevant to our scheme which closed around the time of the financial crash and before this charade of a phase 'aggressive avoidance' had even been coined.