Originally posted by cojak
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<Dashes over to BN66 with towels and smelling salts>
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WSS
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Not a good day on CUK!Comment
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Might as well post this here too; the judgment is online:
Huitson, R (on the application of) v Revenue and Customs [2010] EWHC 97 (Admin) (28 January 2010)Comment
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Not much to be done apart from advising against rashness (which I don't think anyone heard).
No need to give 'em anymore ammo...
Think I'll leave them to their pain...
"I can put any old tat in my sig, put quotes around it and attribute to someone of whom I've heard, to make it sound true."
- Voltaire/Benjamin Franklin/Anne Frank...Comment
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Originally posted by NickFitz View Post
What alot to read, here is a summary with translation..
Translation: the scheme was taking the piss.It is also immediately plain that the tax avoidance scheme, if it worked, would be singularly attractive to any person in the position of the Claimant, that is, any resident of the UK who, as a self-employed person, carried on a trade or profession here. So long as end users were content to contract with an intermediary, rather than with the actual provider of the services, and so long as professional rules did not preclude such intermediation (barristers, for example, need not apply), any UK self-employed trader could reduce his or her taxable income to a tiny fraction of what it would otherwise have been. I accept that very many would not do so, taking the view that the tax avoidance scheme was wholly artificial and perhaps thinking that as UK residents they should be paying UK income tax on the profits of their trade or profession. But, and the figures produced by HMRC confirm this, a substantial number would be attracted. By the time the challenged legislation was enacted there were about 2,500 taxpayers exploiting similar arrangements, and the amount of income tax at stake had risen to £100 million.
· In particular, the potential distortion of competition should not be overlooked. It is one thing to try to compete with, say, an IT consultant who is perhaps more experienced, efficient or skilled: it is entirely a different matter to seek to match a competitor who has the advantage of an effective income tax rate of 3.5 per cent. In my view, for various reasons, including the pressure of competitive disadvantage, such a tax avoidance scheme could be expected to have a very significant "bandwagon" effect, and, as I have stated, this is corroborated by the figures produced by HMRC.
The efficacy/legality of the scheme was not as clear cut as many think.I would summarise the foregoing analysis as follows. The tax efficacy of the arrangements was far from clear cut. There were respectable arguments on both sides of the question..I do not believe that the outcome of any legal proceedings in respect of the arrangements would have been a foregone conclusion. They would, I believe, have been complex, protracted and costly.
HMRC first wrote to the Claimant regarding his use of the tax avoidance scheme on 4 December 2003, but HMRC informed him that it was likely to challenge the validity of the claim only on 16 June 2004. No basis for challenge was mentioned. The Claimant was advised to make payment on account in respect of the disputed sum, so as to avoid the accrual of interest and the incurrence of a possible penalty.HMRC gave plenty of notice and advised payment on account to avoid interest. But even if the tax payer didnt pay up on account they shouldn’t have spent the money.In these circumstances, it was for taxpayers to assess for themselves the risk inherent in not paying the tax in advance. The prudent would retain liquid funds to ensure that they could meet any future tax demand, including claims for interest. If, however, taxpayers chose to spend the whole, or a substantial part, of their net income on current consumption, making no, or inadequate provision for any future liability, or to invest part of it in illiquid assets that might decline in value, they did so at their own risk.
So no violation of human rights.Last edited by Iron Condor; 28 January 2010, 11:11.Comment
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I didn't really have an opinion of the legality of the scheme.
My concern was the legality of the retrospective legislation.
It seems manifestly wrong.
As if you could be arrested for saying that you'll vote Tory in the next election, if Labour win the election and put the Amended Emergency Powers Act of 2014 into effect....
"I can put any old tat in my sig, put quotes around it and attribute to someone of whom I've heard, to make it sound true."
- Voltaire/Benjamin Franklin/Anne Frank...Comment
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Originally posted by cojak View Post
I think one effects the other. If the scheme is very dodgy (and taking the piss) the courts wont reject retrospective legislation on human rights grounds.
If the scheme was legit and widely accepted (income splitting etc) and widely used then the government cant so easily bring in retrospective legislation.
I think this is the right balance.Last edited by Iron Condor; 28 January 2010, 11:40.Comment
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It's even made BBC 5live news.
<sigh>"I can put any old tat in my sig, put quotes around it and attribute to someone of whom I've heard, to make it sound true."
- Voltaire/Benjamin Franklin/Anne Frank...Comment
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