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

[Fireship]

While I accept that it was a free choice (based on supposedly expert opinion) whether an individual used a tax planning scheme or not, the thing that I find most annoying is that, given there has been full disclosure to HMRC via the DOTAS scheme and the speed with which HMRC now seem capable of issuing assessments, was there really no legal (let alone moral) requirement for them to have addressed these issues sooner, at a time when doing so wouldn't have proved ruinous to so many?

That would make for a very interesting scenario indeed!

[Disgusted of Coventry]

While I accept that it was a free choice (based on supposedly expert opinion) whether an individual used a tax planning scheme or not, the thing that I find most annoying is that, given there has been full disclosure to HMRC via the DOTAS scheme and the speed with which HMRC now seem capable of issuing assessments, was there really no legal (let alone moral) requirement for them to have addressed these issues sooner, at a time when doing so wouldn't have proved ruinous to so many?

Oddly enough, the Law Society website (presumably an authoritative source) has some guidance notes which include a description of DOTAS' objectives:

The purpose of the legislation is to identify the detail of schemes seeking to avoid tax and to identify those who use such schemes. HMRC's purpose is to:

1. Identify as early as possible schemes that are being used
2. Challenge avoidance schemes by contesting returns and, where necessary, pursuing the matter through the Courts;
3. Produce legislative changes that will close down avoidance schemes where litigation is not appropriate or where the amount of tax at stake is particularly large.

It doesn't say anything about twiddling their thumbs for several years, and then retrospectively moving the goalposts.

[OnYourBikeGB]

Thank you for your comments and ideas - certainly helpful.

Sounds to me like the only route out of this DOTAS mess is going perm and become a PAYE employee.
Which includes the usual politics, 360 semi-annual performance reviews and the inability to working for more than one clients -
from my perspective the key benefit of being a contractor.

Let me ask bluntly: have they killed off the contractor market in the UK? Because that's what this all seems to be coming down to?

Wonder what PCG has got to say on all this?

Happy days - not!

That's a very good question. Freelancers are vital to the UK industry, we are exposed to many more complex and varied scenarios than even the best permies, but who in their right minds would want this level of stress and uncertainty? Just because the Government says something is fair, it doesn't make it so. Their objective is not fairness, it's tax receipts, no matter how they dress it up with slogans. Leaving aside the subject of tax-planning, do we believe that our industry is being victimised and what will be the long-term effect of this?

[DeadDOTAS]

Question in the "stupid question department" re. validity of DAs and likely impact

Dear all,

Here's a question from the "stupid question department" re. the validity of the DAs we've received:


Hector's website states the following ( SALF409 - Enquiries into Tax Returns: discovery assessments )

__________________________________________________ _______________
"SALF409 - Enquiries into Tax Returns: discovery assessments
Discovery assessments
Section 29

HMRC has the power to make 'discovery assessments', under TMA70/S29 (1), to prevent a loss of tax.

TMA70/S29 provides general rules for HMRC assessments to prevent any loss of tax, but the rules limit the right to make a discovery assessment for any period if a self assessment has already been made by the taxpayer for that period.

The rules that apply where a self assessment has already been made embody the principles established in case law and in particular in the case of Scorer v Olin Energy Systems Limited [58 TC p592]. Unless the loss of tax has been brought about carelessly or deliberately, if the information 'discovered' was already in the officer's possession when the self assessment became final, HMRC have no right to make a discovery assessment.

These rules ensure that a taxpayer who has made a full disclosure in the tax return has absolute finality once the time allowed for opening an enquiry has passed. This is the case even if the tax return is subsequently found to be incorrect, unless it was incorrect because of careless or deliberate conduct. In any case where there was incomplete disclosure or careless or deliberate conduct HMRC have the power to remedy any loss of tax."

_________________________________________________

Here comes my stupid question then:

If everything was disclosed properly as part of the Self assessment (i.e. 'discovered'), HMRC's OWN rules stipulate that the DA is INVALID in the first place? Do you agree?

Now, presumably an INVALID DA = NO actual DA exists? Do you agree?

Consequently, when there is NO actual DA in existence, they cannot send you an accelerated payment notice, or can they?

(And, in case you are trying to be clever, the GAAR rule would not apply either, because you've clearly identified the whole thing as a fully disclosed DOTAS arrangement in the first place.)

I'm only trying to follow their logic - but maybe being logical is asking too much as far as Hector is concerned...

Found this, maybe useful to illustrate further:
http://www.rpc.co.uk/index.php?optio...373&Itemid=129
http://www.accountingweb.co.uk/artic...essment/541237

And 15 things Hector doesn't want you to know:
http://www.tax-hell.co.uk/portfolio/...t-you-to-know/
(I'm not affiliated/related to the author of the eBook, but I've bought it before and thought it was worth the money)

Thoughts/feedback?
Many thanks.

[DeadDOTAS]

HMRC case closures

Yes, the main stream newspaper have been talking about an "80%" success rate of Hector when going to tribunal.

But, I've come across the following website which lists some of Hector's case closure where they either lost or had to withdraw:
Tax Investigation And Tax Tribunal Appeal Case Closures - Martyn F Arthur

And there is more:
Case Study: Tax Tribunal Directs HMRC to Issue Closure NoticeHMRC Tax Dispute resolution | Tax Solicitors & Tax Barristers | London Tax Advice & Tax Services | City Law Firm, London

Particularly interesting may be the following paragraphs:

__________________________________________________ _

"Factual Background: HMRC’s Tax Enquiry
In January 2010, HMRC opened an enquiry into Mr Bloomfield’s tax returns. Despite providing adequate information HMRC believed that further properties owned by Mr Bloomfield which were purchased in 2007/2008 were not disclosed in his tax returns. As a result, HMRC requested further information from Mr Bloomfield.

Closure Notice: Application under section 28A(4) Taxes Management Act 1970
In response to HMRC’s request for further information, Mr Bloomfield made an application under section 28A(4), Taxes Management Act 1970 (TMA). Under this section, a taxpayer has the right to apply to the Commissioners for directions requiring an officer to issue a closure notice within a specific period.

This application will be heard and determined in the same way as an appeal. If the application is successful, HMRC will be required to issue a closure notice unless there are reasonable grounds for not doing so.

Mr Bloomfield’s application under section 28A(4) TMA was based on the following grounds:

• HMRC’s enquiry has been unreasonably protracted, onerous and conducted unreasonably;
• Mr Bloomfield is a 70 year old male who is undergoing medical investigations for memory loss and confusion;
• Following a complaint being made, there has been unreasonable delay and a refusal by HMRC’s officers to answer correspondence; and
• HMRC made voluminous requests for documents and information, parts of which were based on information already provided, which had not been considered significant.

...

The tribunal directed HMRC to issue a closure notice within 30 days of its decision which would allow the remaining enquiries to be completed without delay.

Comments: Implications of Closure Notices
This case is a reminder to taxpayers that they can bring to an end a long running investigation and enquiry by HMRC, provided there are sufficient grounds for doing so. However, an application under section 28(4)(A) TMA will not be appropriate in all circumstances and much will depend on specific factors of the case.


"
__________________________________________________ _____

So, maybe an Application under section 28A(4) Taxes Management Act 1970 is a route to fast-track our cases and if successful, prove that the DAs are INVALID and UNLAWFUL and, as a result not even avoid "accelerated payment notices" but maybe even receive "closure notices" to get our appeals resolved.

Just another thought - and sorry if I am stating (or missing?) the obvious. I am not a tax lawyer or specialist, just reading/researching the issues at hand.

Thanks for reading and sharing your comments.

[cojak]

I want to remind everyone that this IS NOT an EBT DOTAS 'general chewing the cud' thread - this is the NTRT BN66 (Montpellier) thread. If requested by DR/Santa Claus I will move these posts to the HMRC Enquiries forum.

Edit: since posters are ignoring this advice I will make it clearer - all DOTAS posts can now be found in HMRC consultative document for marketed tax avoidance schemes - never fear, DR will be over to answer your questions I'm sure.

[DonkeyRhubarb]

I want to remind everyone that this IS NOT an EBT DOTAS 'general chewing the cud' thread - this is the NTRT BN66 (Montpellier) thread. If requested by DR/Santa Claus I will move these posts to the HMRC Enquiries forum.

Edit: since posters are ignoring this advice I will make it clearer - all DOTAS posts can now be found in HMRC consultative document for marketed tax avoidance schemes - never fear, DR will be over to answer your questions I'm sure.

There is some common ground because the BN66 Montpelier scheme could also be affected by the DOTAS legislation but you're right the place to discuss that is in the condoc thread.

Many thanks for moving the posts.
DR

[banchini]

MP contact for calcs

DR et al

Can anyone provide the latest contact in MP who can provide accurate liability calc?

Would this not show up on government gateway also? Just wondering how to correlate any numbers MP provide with those from HMRC?

Thanks

<mod note: banchini has told me that he has been a user of the MP scheme.>

[DonkeyRhubarb]

DR et al

Can anyone provide the latest contact in MP who can provide accurate liability calc?

Would this not show up on government gateway also? Just wondering how to correlate any numbers MP provide with those from HMRC?

Thanks

<mod note: banchini has told me that he has been a user of the MP scheme.>

If you have received closure notices, which have been appealed, then the amounts should appear online. I don't think these figures include interest though.

If you want exact figures I would ask HMRC.

[smalldog]

If you have received closure notices, which have been appealed, then the amounts should appear online. I don't think these figures include interest though.

If you want exact figures I would ask HMRC.

and my understanding is that any follower notices would exclude any interest calculations. They are for the postponed/appealed amount without interest. Interest calculations appearing online seems inconsistent and it seems to be down to the individual. I have recently seem some added and its very obvious if they are, it will say interest and years broken down.