Political motivation for tax persecution

[DonkeyRhubarb]

The Government may not control the courts but they (and public opinion) certainly influence them.

The courts approach to tax avoidance definitely seems to have shifted over the past few years. It is not necessarily enough anymore to show that an arrangement was within the letter of the law. Judges are increasingly adopting a more purposive approach and taking into account what Parliament would have intended.

There was a reference to this in the Boyle decision.

"120. In reaching the above conclusions and deciding this appeal we have borne in mind Parliament's intention which is to render liable to tax income which in substance and reality is employment income."

[centurian]

Those 40,000 were Tory voters anyway. Hanging out those 40,000 to dry might persuade a million or 2 C1/C2 voters(who actually matter) to vote for them.

WHS - it's a simple numbers game - and unfortunately the spreadsheet says "no".

Up to 40,000 votes lost, not all of whom voted Tory anyway - and some may continue to vote Tory anyway, since all the realistic alternatives will probably be just as bad, or even worse - probably net 20,000 votes lost.

Offset that against the potentially hundreds of thousands of votes gained through the appearance of "cracking down on tax dodgers". I think this may be less than they originally calculated because I think the government are not getting as much "credit" as I think they hoped, largely because the big corporations are still getting away with it.

But the numbers were crunched probably several years ago - and t's too late to change course now, or they will lose even more votes.

[centurian]

It is not necessarily enough anymore to show that an arrangement was within the letter of the law. Judges are increasingly adopting a more purposive approach and taking into account what Parliament would have intended.

A little pedantic perhaps, but strictly speaking, such a scheme wasn't operating within the letter of the law then, given that the law has always given judges this latitude - which I agree they only seem to be recently using.

A scheme is only "legal" if it passes the specific items of law which it is exploiting, and also, the wider law in relation to tax matters.

Scheme providers seem to be become fixated on making sure their schemes pass the first part, while not giving enough focus to the second part - in part due to the way that judges were rendering judgements, causing them to take their eye off the ball.

That's why we may see "poorly implemented" schemes fail, while other very similar schemes succeed. The hard part is - how do you know whether your scheme was poorly implemented or not. The providers are not going to tell you they screwed up.

[jbryce]

A little pedantic perhaps, but strictly speaking, such a scheme wasn't operating within the letter of the law then, given that the law has always given judges this latitude - which I agree they only seem to be recently using.

A scheme is only "legal" if it passes the specific items of law which it is exploiting, and also, the wider law in relation to tax matters.

Scheme providers seem to be become fixated on making sure their schemes pass the first part, while not giving enough focus to the second part - in part due to the way that judges were rendering judgements, causing them to take their eye off the ball.

That's why we may see "poorly implemented" schemes fail, while other very similar schemes succeed. The hard part is - how do you know whether your scheme was poorly implemented or not. The providers are not going to tell you they screwed up.

What I don't get is that HMRC aren't using the tools they have available to target the current crop of schemes. Where's the GAAR in all of this? It should be ruling against the current crop of schemes, for example Garraway.

I'm also not too sure that the current avoidance strategy is winning many votes, Google and Starbucks still avoid it and all the strategy does is highlight that.

[Zero Liability]

The Government may not control the courts but they (and public opinion) certainly influence them.

The courts are part of the government, but I am guessing you guys mean the executive & legislative arms.

[StrengthInNumbers]

A little pedantic perhaps, but strictly speaking, such a scheme wasn't operating within the letter of the law then, given that the law has always given judges this latitude - which I agree they only seem to be recently using.

A scheme is only "legal" if it passes the specific items of law which it is exploiting, and also, the wider law in relation to tax matters.

Scheme providers seem to be become fixated on making sure their schemes pass the first part, while not giving enough focus to the second part - in part due to the way that judges were rendering judgements, causing them to take their eye off the ball.

That's why we may see "poorly implemented" schemes fail, while other very similar schemes succeed. The hard part is - how do you know whether your scheme was poorly implemented or not. The providers are not going to tell you they screwed up.

Providers will not but their actions will.

[StrengthInNumbers]

What I don't get is that HMRC aren't using the tools they have available to target the current crop of schemes. Where's the GAAR in all of this? It should be ruling against the current crop of schemes, for example Garraway.

I'm also not too sure that the current avoidance strategy is winning many votes, Google and Starbucks still avoid it and all the strategy does is highlight that.

Not using the tools because if unacceptable avoidance is stopped in roots, how will they keep their jobs? Disclose avoidance so that we sleep over it for decade and then come back to destroy you. You are morally wrong for disclosing but we are morally correct as finally we took our finger our - utter crap

Very short term view - in medium to long term - they will lose votes. Companies will go where they can efficiently do business, government will not be able to twist their arms to pay what government wants. As companies will go so the jobs will go - it is a cycle. Government could have controlled financial crises just by increasing the reserve ratios and what is counted as reserve but did nothing - they were on the gravy train and now only banks are being targeted when real culprits were regulators. Banks did what they were meant to i.e. make profit - it was for regulators to ensure the system stays healthy not bank's responsibility. Wait and see - this will come back and bit government in its arse

[dangerouswhensober]

Criticism of Government tax policy from it's own MPs

I made the original posting on this thread on December 4th.

I have just found this link (on the NTRT thread) describing a apeech made by (Tory) David Davis on the same day.

Tory veteran David Davis attacks government tax avoidance crackdown as threat to the rule of law | City A.M.

Mr Davis states that:
"The government has become the biggest threat to the rule of law ..."

He also says:
" ... there was a serious risk to the rule of law in Britain today coming from the government because these measures fundamentally departed from the conventional understanding of British justice".

This is very useful - if senior and respected members of the governing party think that the current drive against tax avoiders is unjust (and even illegal), then there is certainly hope for a rational reconsideration of the FN/APN legislation at some point in the future.

(BTW - Mr Davis also notes that "HMRC was spectacularly incompetant ...")

[Boobetty]

Mr Davis also notes that "HMRC was spectacularly incompetant

Not sure we need a politician to tell us what we know already.

[StrengthInNumbers]

Mr Davis is being heard by no one at the moment.