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

[GottaBeOptimistic]

Or read the CIOT's response to the consultation. The DOTAS proposal has retrospective effect back to 2004, and potentially affects 65,000 people.

http://www.tax.org.uk/Resources/CIOT...20response.pdf

Apologies DR if I appear out of the loop with this but does the DOTAS proposal mean that people who worked through an EBT scheme are at risk of retrospective tax also ? If so how far back could that apply ?

[DonkeyRhubarb]

Apologies DR if I appear out of the loop with this but does the DOTAS proposal mean that people who worked through an EBT scheme are at risk of retrospective tax also ? If so how far back could that apply ?

It could affect any scheme which was registered under DOTAS, or HMRC believe should have been registered, since DOTAS was introduced in 2004.

EBTs could also be affected by the other proposal regarding "follower cases". HMRC have claimed that the Boyle decision last year applies to other loan schemes.

[Guttersnipe]

Apologies for appearing equally out of the loop and (for using you as a research resource!), but I see the 2004 DOTAS term mentioned often. Am I naive in thinking that since all my activity was in 2003 there's a possibility that this may not affect me?

[smalldog]

my understanding is that any transactions prior to DOTAS is 2004 are not affected, that correct.... anyone?

[DonkeyRhubarb]

Apologies for appearing equally out of the loop and (for using you as a research resource!), but I see the 2004 DOTAS term mentioned often. Am I naive in thinking that since all my activity was in 2003 there's a possibility that this may not affect me?

It shouldn't affect you but there is a slight doubt over this.

Montpelier were notified of the DOTAS number for the scheme on 1 October 2004 and one of HMRC's witnesses at the High Court claimed that every return submitted on or after this date should have included the number. If this were true then tax year 2003/4 could potentially be caught because the returns were filed in January 2005.

However, I'm not sure this is right though since my understanding is that DOTAS could only apply from tax year 2004/5 onwards.

[Guttersnipe]

Ta. I'll stick with "maybe a possibility" then :-)

[GottaBeOptimistic]

It shouldn't affect you but there is a slight doubt over this.

Montpelier were notified of the DOTAS number for the scheme on 1 October 2004 and one of HMRC's witnesses at the High Court claimed that every return submitted on or after this date should have included the number. If this were true then tax year 2003/4 could potentially be caught because the returns were filed in January 2005.

However, I'm not sure this is right though since my understanding is that DOTAS could only apply from tax year 2004/5 onwards.

Isn't this another double standard then. Our scheme users get penalised prior to 2004 where as everyone else potentially get's penalised post 2004 ?

[DonkeyRhubarb]

Isn't this another double standard then. Our scheme users get penalised prior to 2004 where as everyone else potentially get's penalised post 2004 ?

I'm not sure the HMRC witness understood DOTAS. I don't believe the rules can apply prior to tax year 2004/5.

What's even more annoying is that Montpelier, along with many other tax firms, only registered to be "on the safe side". DOTAS included a grandfathering provision meaning that schemes that existed prior to 2004 were excluded. The CIOT response to the consultation specifically mentions this.

Once again, HMRC penalise people for being open, honest and transparent.

[handyandy]

I'm not completely certain on this point but I think the proposed changes in the consultation paper refer to there already being an open inquiry into your return as one of the requirements to use the follower/payment provisions. So if you don;t have an open inquiry into a pre-2004 tax year I'd assume it is unlikely HMRC will try to penalise you for those years even if they are doing so for later years where you were using the same scheme but it was registered under DOTAS (the point being that having a DOTAS number on your return was the thing that tended to trigger an automatic opening of an inquiry).

Of course that will not stop HMRC going back to previous years, even if they didm;t open an inquiry, if they thing there was deliberate misrepresentation on the returns. And it also would't stop HMRC and the Treasury changing the law yet again in the future if they feel there are big historical revenue seams that they can mine whilst publicising it as clamping down on tax cheats!

[GottaBeOptimistic]

I'm not sure the HMRC witness understood DOTAS. I don't believe the rules can apply prior to tax year 2004/5.

What's even more annoying is that Montpelier, along with many other tax firms, only registered to be "on the safe side". DOTAS included a grandfathering provision meaning that schemes that existed prior to 2004 were excluded. The CIOT response to the consultation specifically mentions this.

Once again, HMRC penalise people for being open, honest and transparent.

Does this mean that there are grounds for Montpelier users to challenge and not have to pay anything prior to 2004/2005 ?

It sounds like we are one of many schemes that came under DOTAS and were at risk and therefore there could be a rule for consistency ?