Going Dutch

[webberg]

A case heard a couple of years ago (Joost Lobler v HMRC [2013] UKFTT 141) has had another round in Tribunal at UKUT [2015] 152.

Without going into too much detail the later hearing was about appealing under Human Rights rules (failed) and in particular whether the signing of a contract without taking professional advice was an action capable of rectification (yes).

basically when the contract he signed had options which gave the same commercial result but different tax results and no advice was taken, could rectification to a more reasonable tax position be applied. Yes it could.

(Mrs Justice Proudman is fast becoming my favourite judge).


When many of you signed up for "scheme A" rather than be an employee or trade via a ltd co, were you given professional advice?

Lots for BIG GROUP to work on here.

[MercladUK]

Well I certainly didn't take any professional advice.

[MercladUK]

so....
what I am reading is that under this provision (if applicable) you could try to argue that the contract value say 100k could have been put through a limited company instead of scheme A (retrospectively in theory of course) as an option and the tax liability could (in theory) of a limited company apply instead of straight tax on other income which HMRC want to apply?

Am I understanding this correctly?

[webberg]

so....
what I am reading is that under this provision (if applicable) you could try to argue that the contract value say 100k could have been put through a limited company instead of scheme A (retrospectively in theory of course) as an option and the tax liability could (in theory) of a limited company apply instead of straight tax on other income which HMRC want to apply?

Am I understanding this correctly?

That's possible but would be an outlier in terms of result - won't stop BG arguing that.

More likely it acts as a limitation on penalty meaning that the final result is going to be closer to the current offer and therefore not much to lose by fighting on.

[StrengthInNumbers]

Very interesting. With all these case in higher courts - UBS, DB, Rangers, Fisher and now this one, one of following will happen in next 18 months -
1) HMRC lose all grounds and nothing to pay at all - HMRC will fight tooth and nail as all those who settled will be crying babies.
2) HMRC lose many grounds and while walking on ice offers a much much better settlement to save face and move on. Likely in my view.
3) HMRC wins all and those who did not settle have to pay up. In most cases managed properly I would think without penalties.

4th scary option is HMRC lose and government comes up with mother of all retrospective legislation.

[webberg]

Very interesting. With all these case in higher courts - UBS, DB, Rangers, Fisher and now this one, one of following will happen in next 18 months -
1) HMRC lose all grounds and nothing to pay at all - HMRC will fight tooth and nail as all those who settled will be crying babies.
2) HMRC lose many grounds and while walking on ice offers a much much better settlement to save face and move on. Likely in my view.
3) HMRC wins all and those who did not settle have to pay up. In most cases managed properly I would think without penalties.

4th scary option is HMRC lose and government comes up with mother of all retrospective legislation.

I think that there are more options but 2 is what BG is aiming at promoting and creating.

I would take issue with the timing. I think we're perhaps 3 to 5 years from option 2.