Human Rights Committee condemns retrospective tax

**BrilloPad** · 10 July 2009, 09:55

Then I get a chance to congratulate you a second time!

Very well done Sir

**cojak** · 10 July 2009, 10:04

<Tips hat to DonkeyRhubarb>

You found it! Congrats DR...

**The Lone Gunman** · 10 July 2009, 10:06

Originally posted by DonkeyRhubarb View Post

This relates to BN66, or what many of you will euphamistically know as the "dodgy IoM scheme".

It was originally posted on Accounting/Legal, but several people have suggested it should be here.

Joint Committee on Human Rights Report:
http://www.publications.parliament.u...3/13304.htm#a5

Letter from JCHR to Stephen Timms:
http://www.publications.parliament.u...3/13308.htm#a6

It still boils down to the question of whether the clarification as the Govt. see it was a new definition or not.
If it is new then I agree, there should be no retrospection. If, however, they were clarifying what has always been the case then all those who have used the scheme are liable.
Hard as that may be to swallow it is the case.
It sems to me (though memeory may be playing tricks) that there has been advice from experts to these IoM schemes that said they were dodgy for many years. There have only been one or two giving advice that they were legit and oddly enough those advisors were the ones running the schemes.

**AlfredJPruffock** · 10 July 2009, 10:10

I think you will find Governments are very selective in which aspects of the Human Rights Convention that it acknowledges - especially in millitary and fiscal concerns the Human Rights convention can and often is overiden by Nations due to 'internal considerations'.

In other words Governments will legistlate irrespecitve of Strasbourg - when it is in their own interest to do so. The provsions of Strasbourg are not always Binding.

In this case 200 Million good reasons.

Dont count on Strasbourg coming to the rescue.

But I wish you luck against this draconic legislation.

**Cyberman** · 10 July 2009, 10:30

I wonder if any of these people affected were some of the idiots that voted for Labour in 1997 or since.

**BrilloPad** · 10 July 2009, 10:40

Originally posted by The Lone Gunman View Post

It still boils down to the question of whether the clarification as the Govt. see it was a new definition or not.
If it is new then I agree, there should be no retrospection. If, however, they were clarifying what has always been the case then all those who have used the scheme are liable.
Hard as that may be to swallow it is the case.
It sems to me (though memeory may be playing tricks) that there has been advice from experts to these IoM schemes that said they were dodgy for many years. There have only been one or two giving advice that they were legit and oddly enough those advisors were the ones running the schemes.

If they are clarifying then it proves there was a loophole all along.

Let them go to commissioners/court with the original legislation. Its up to them to clarify.

**DaveB** · 10 July 2009, 11:52

From what I've read about this there seem to be a three major points to consider.

1. HMRC have known about these schemes for at least 7 years but have not been consistent in declaring them valid or invalid over that period.

2. HMRC have known about these schemes for at least 7 years and have only now decided to declare them as invalid and persue participants for "unpaid tax".

3. HMRC are attempting to declare them invalid restrospectivly over the 7 years they knew about them but did nothing about them, which the JCHR has decided is almost certainly in breech of the HRA in light of items 1 and 2.

If HMRC had been consistent in saying they were invalid then they would have a stronger argument for persuing cases back 7 years. Individual cases would be fought on their own merits in light of consistent advice from HMRC that scheme managers would then argue was incorrect and the courts would sort it out.

If HMRC had decided now that the schemes were invalid from this point forward and outlawed new schemes there would be no issue. The "Loophole" would be closed, current schemes would close and eveyone would go back to running their own Ltd co.

Since they have done neither they appear to have created a rod for their own back when trying to recover "unpaid tax" over the whole 7 year period and dramatically undermined any case they may have had.

**Cyberman** · 10 July 2009, 11:58

Originally posted by DaveB View Post

From what I've read about this there seem to be a three major points to consider.

1. HMRC have known about these schemes for at least 7 years but have not been consistent in declaring them valid or invalid over that period.

2. HMRC have known about these schemes for at least 7 years and have only now decided to declare them as invalid and persue participants for "unpaid tax".

3. HMRC are attempting to declare them invalid restrospectivly over the 7 years they knew about them but did nothing about them, which the JCHR has decided is almost certainly in breech of the HRA in light of items 1 and 2.

If HMRC had been consistent in saying they were invalid then they would have a stronger argument for persuing cases back 7 years. Individual cases would be fought on their own merits in light of consistent advice from HMRC that scheme managers would then argue was incorrect and the courts would sort it out.

If HMRC had decided now that the schemes were invalid from this point forward and outlawed new schemes there would be no issue. The "Loophole" would be closed, current schemes would close and eveyone would go back to running their own Ltd co.

Since they have done neither they appear to have created a rod for their own back when trying to recover "unpaid tax" over the whole 7 year period and dramatically undermined any case they may have had.

All great in theory. Meanwhile divorces, attempted suicide etc carry on thanks to a caring socialist HMG. It's only fair.

**AlfredJPruffock** · 10 July 2009, 12:14

HMRC are attempting to declare them invalid restrospectivly over the 7 years they knew about them but did nothing about them, which the JCHR has decided is almost certainly in breech of the HRA in light of items 1 and 2.

The question of legislative Time Limits is always controversial - furthermore the provisions of the Strasbourg Convention in the commercial and financial sectors are very rarely binding.

Ultimately the member state may exercise what Strasbourg terms 'a margin of appreciation' should it with to remain immune from Strasbourg when the matter is fiscal in its nature.

On the other hand ; had HMRC been waterboarding you during their investigations , then thats a different matter .

Human Rights Committee condemns retrospective tax