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

[OnYourBikeGB]

Interest is included in the "follower cases" proposal (chapter 3, page 13, 3.30-3.33).
https://www.gov.uk/government/upload..._avoidance.pdf

They don't specify with the DOTAS proposal but it does say this in 4.10

"The majority of the details set out in Chapter 3 will also be relevant to this [DOTAS] proposal, but with some additional considerations and safeguards."

I would therefore assume that it will include interest.

When I read that, I'm still not sure. The example they give is for £20K, and there is 4 years interest due on it. After paying the £20K, 3.32 seems to imply that the interest will stop accumulating until 'the liability is agreed and paid', which I am hoping means after the tribunal. If it doesn't, I'm sunk!

[helen7]

Thinking I might send a quick letter to MP with summary:

• I used a legal IR35 tax product from 2001-2008.
• HMRC then recommend government change the law retrospectively, which happened even though the minister responsible didn't understand the implications (ie didn't know it would bankrupt so many people)
• Judicial review said not against human rights for a government to retrospectively change the law
• HMRC now would like to introduce new law to enable collection of taxes before court decide if tax is due
• I could now be made bankrupt before any court has 'reviewed' HMRC actions

I just think we need as many MPs as possible to ensure they understand the implications of the proposal.

To save you some time I have filled in the MP answers for you.

• I used a illegal IR35 tax product from 2001-2008.
• HMRC then recommend government change the law retrospectively, which happened even though the minister responsible didn't understand the implications (ie didn't know it would bankrupt so many people) So what?
• Judicial review said not against human rights for a government to retrospectively change the law - Its the law, whats the problem? I can't argue with the court.
• HMRC now would like to introduce new law to enable collection of taxes before court decide if tax is due - I'll do whatever my party tells me to do
• I could now be made bankrupt before any court has 'reviewed' HMRC actions Here is a leaflet on dealing with bankrupcy

[FredBasset]

When I read that, I'm still not sure. The example they give is for £20K, and there is 4 years interest due on it. After paying the £20K, 3.32 seems to imply that the interest will stop accumulating until 'the liability is agreed and paid', which I am hoping means after the tribunal. If it doesn't, I'm sunk!

I think that is what it means too, 3.30 says interest is due when a dispute is resolved, 3.31 is quite clear and 3.32 says when the liability is finally agreed.

They talk about how interest stops when the payment is made, not that you have to pay the interest.

Let's not give them any ideas though.

[SantaClaus]

To save you some time I have filled in the MP answers for you.

• I used a illegal IR35 tax product from 2001-2008.
• HMRC then recommend government change the law retrospectively, which happened even though the minister responsible didn't understand the implications (ie didn't know it would bankrupt so many people) So what?
• Judicial review said not against human rights for a government to retrospectively change the law - Its the law, whats the problem? I can't argue with the court.
• HMRC now would like to introduce new law to enable collection of taxes before court decide if tax is due - I'll do whatever my party tells me to do
• I could now be made bankrupt before any court has 'reviewed' HMRC actions Here is a leaflet on dealing with bankrupcy

Of course, if it was illegal, we would be tried in a criminal court and retrospective legislation would not be allowed.

[helen7]

Of course, if it was illegal, we would be tried in a criminal court and retrospective legislation would not be allowed.

At least we'd get our chance to have our day in court!!

[DonkeyRhubarb]

When I read that, I'm still not sure. The example they give is for £20K, and there is 4 years interest due on it. After paying the £20K, 3.32 seems to imply that the interest will stop accumulating until 'the liability is agreed and paid', which I am hoping means after the tribunal. If it doesn't, I'm sunk!

I've re-read it, and I think you're right.

[Cantthinkof1]

Totally agree

When I read that, I'm still not sure. The example they give is for £20K, and there is 4 years interest due on it. After paying the £20K, 3.32 seems to imply that the interest will stop accumulating until 'the liability is agreed and paid', which I am hoping means after the tribunal. If it doesn't, I'm sunk!

Hi OnyourBikeGB,

I have spent a good hour reading and re reading the proposals contained in the document, and I believe that you and DR are correct, in that the interest will stop accumulating once the initial tax amount is paid off.
I think this is backed up by the fact that it is Simple interest and not subject to Compound interest (i.e. if the capital is paid off, then there is nothing to charge interest against). If they did continue to levy interest charges then this surely would be looked upon as charging compound interest, which they don't do (well, unless someone knows different?!!)
Hope the above makes sense!

[smalldog]

I've re-read it, and I think you're right.

thats also how I read it so glad we all seem to agree. On another point its very unclear what would happen if you cant pay the follower notice. It needs to be made very clear which I suspect will happen during the finance bill debates to cover situations where:

- tax payer doesnt have cash to settle the follower notice but has assets that can be sold at a later date to settle. This would require postponement of the follower for a period of time to allow such a sale
- tax payer doesnt have cash or assets to settle the follower notice, will TTP procedures be implemented and on what basis
- if either of the above apply is the tax payer exempt from the follower notice legislation and it only applies in the case where a tax payer has an obvious cash flow advantage and can settle without any hardship, i.e. the money is in savings and easily accessible
- would tax payers have bankruptcy proceedings brought against them in the case of failing to pay a follower notice

[reckless]

DOTAS Payment Acceleration

So basically, HMRC get what NTRT may have offered up as a settlement compromise (the tax shortfall but NO interest; not sure about N.I. payments though), but then keep the option to get the interest too later, if they can be bothered to actually debate the issue in a First Tier Tax Tribunal.

Timing wise, of course this would allow HMRC to issue payment notices in July, collect in October (not just from us, but all 65,000 pending cases), and in turn this ill-gotten bounty would then allow George Osborne to offer up various sweetners in his April 2015 budget, just in time for the election. If it pays off for them, then by picking the low hanging fruit early, their scam has worked. If it doesn't, then the next governemnt can always chase up the interest element, if they believe it is worth the effort, and if HMRC can get their act together - I know, a long shot!!

[OnYourBikeGB]

I've re-read it, and I think you're right.

That's a relief! Lol. I've said it before, I'll say it again, it's like living in a Kafka novel.