2019 tax charge - consultation preparation

[DotasScandal]

However, when Parliament responds with retrospective legislation, which is legal, the response come that it is not moral. It's a funny old world.

No, the response is that it goes against fundamental legal principles.

Please reread what Gauke himself had to say about retrospective legislation.
Here's the link:

House of Commons General Committee

"It is not acceptable that the Government permit something that they consider unacceptable to exist for some years, and then seek to introduce retrospective legislation to address it. That is what we see here. The comments from the professional bodies are universally critical. The Chartered Institute of Taxation described the retrospective nature as “extreme” and “unjustified”, the Law Society described it as “wrong in principle”, and the Institute of Chartered Accountants in England and Wales said that “it sends out a very damaging signal about the stability of the UK tax system”."

The whole debate is worth your time.

[Old Greg]

No, the response is that it goes against fundamental legal principles.

Please reread what Gauke himself had to say about retrospective legislation.
Here's the link:

House of Commons General Committee

"It is not acceptable that the Government permit something that they consider unacceptable to exist for some years, and then seek to introduce retrospective legislation to address it. That is what we see here. The comments from the professional bodies are universally critical. The Chartered Institute of Taxation described the retrospective nature as “extreme” and “unjustified”, the Law Society described it as “wrong in principle”, and the Institute of Chartered Accountants in England and Wales said that “it sends out a very damaging signal about the stability of the UK tax system”."

The whole debate is worth your time.

Perhaps I have misunderstood. When the critiques are that retrospective legislation is "not acceptable", "extreme", "unjustified", "wrong in principle", are they describing such legislation as illegal or immoral or something else?

[DonkeyRhubarb]

99.999% of the population, including MPs, would say the use of schemes was wrong. The argument that "it was legal" doesn't cut any ice. The vast majority would also support retro action to tax them.

I have no argument with this anymore.

However, I do think users of schemes are entitled, if they wish, to resist such HMRC/HMG action, even if it is ultimately futile. That's why I support what Big Group are doing.

On the other hand, if I could turn the clock back 8 years, I might have been better off settling and moving on with my life.

[Old Greg]

99.999% of the population, including MPs, would say the use of schemes was wrong. The argument that "it was legal" doesn't cut any ice. The vast majority would also support retro action to tax them.

I have no argument with this anymore.

However, I do think users of schemes are entitled, if they wish, to resist such HMRC/HMG action, even if it is ultimately futile. That's why I support what Big Group are doing.

On the other hand, if I could turn the clock back 8 years, I might have been better off settling and moving on with my life.

Of course they are.

I have to say, even my stony heart was softened when I see that some providers are asking for partial loan repayments. I hope you all tell them where to stick it.

[DotasScandal]

Perhaps I have misunderstood. When the critiques are that retrospective legislation is "not acceptable", "extreme", "unjustified", "wrong in principle", are they describing such legislation as illegal or immoral or something else?

I think it was pretty clear. The principle that legislation should be prospective is fundamental in law, as without it, all predictability is removed from the system.
It's about the integrity and stability of the system.
It's cold technicality, like the laws of physics. Morals have nothing to do with it.

[DonkeyRhubarb]

Perhaps I have misunderstood. When the critiques are that retrospective legislation is "not acceptable", "extreme", "unjustified", "wrong in principle", are they describing such legislation as illegal or immoral or something else?

It's not illegal, that's for sure.

It used to be exceptional but now it seems to be accepted.

Arguing against it is a bit last decade.

[Old Greg]

I think it was pretty clear. The principle that legislation should be prospective is fundamental in law, as without it, all predictability is removed from the system.
It's about the integrity and stability of the system.
It's cold technicality, like the laws of physics. Morals have nothing to do with it.

No it isn't. Parliament is sovereign. Otherwise the retrospective legislation would be illegal. The retrospective legislation is clearly legal, so there can be objection to it on legal grounds.

The objections you state appear to be of fairness, not law. Or have I missed something?

[ASB]

However, when Parliament responds with retrospective legislation, which is legal, the response come that it is not moral. It's a funny old world.

Yes, retrospective legislation is perfectly legal. It is generally rarely used and when it is is normally semantically not retrospective rather simply retroactive (as is the 2019 tax charge). Personally I don't think it unreasonable to backdate the 2019 tax charge to the time of its announcement. Those things that occurred before that should be safe.

I'm not arguing a moral case against retroactive legislation. But, although, legal (ultimately the executive can pass what the hell it wants) it does question many natural legal principles. That of certainty of action/outcome is the main one for me.

In general retrospective is used to alleviate unintended consequence. Not to impose additional intended consequence.

[AtW]

I'll debate with most people, except the (blatantly) intellectually dishonest.

So I am intellectually dishonest, nice.

But people who stand up in court and claim without blushing that getting paid for normal job via offshore trust which then loans back money without interest and intention to repay is perfectly legal normal thing, no 40% tax due Sir, double taxation agreement blah blah blah - they are all intellectually honest.

Well I am glad I am not one of them even if it earns me the title of being "intellectually dishonest".

---

APNs were inevitable. Many other countries would follow this correct concept as it's the only way to ensure money don't disappear quickly, it also serves as very good discouragement to scheme users so a big deterrent in itself. I'd personally do it a bit different - make CDTs a requirement in case when DOTAs used, that should be done automatically in SA - emergency tax code until things clear up.

Retro action was also inevitable - scheme users should be under no illusion that the worst that's going to happen is that loophole is closed and they move on to another. Such element of uncertainty acts as a deterrent too.

[Old Greg]

So I am intellectually dishonest, nice.

But people who stand up in court and claim without blushing that getting paid for normal job via offshore trust which then loans back money without interest and intention to repay is perfectly legal normal thing, no 40% tax due Sir, double taxation agreement blah blah blah - they are all intellectually honest.

Well I am glad I am not one of them even if it earns me the title of being "intellectually dishonest".

Welcome to DOTAS through the Looking Glass, my friend.