Excluded from the McCann settlement

[loanchargehurt]

The option has always existed for any scheme user, with pre-2011 loans, who hasn't settled, to ask for their appeal to be heard at tribunal. Pre-2011 loans were before the DR legislation came in, so would be judged on the law as it was at the time (ie. the law that was "not clear").

If you haven't settled your pre-2011 loans, you could do this.

I wouldn't fancy the chances though because I can't recall a single appeal in the last 20 years, involving a tax avoidance scheme, that has ever been successful.

You must know that neither part of what you said makes sense.

1. An individual would need sufficient funds to be able to take this all the way through the courts from FTT, to UTT, to CoA, to Supreme Court. They’d need a budget of maybe £1m so it makes no economic sense unless the tax at stake is much in excess of the costs. HMRC know this and will spend taxpayer money to price the individual out of justice. Some say that was the point of disbanding the old General Commissioners and Special Commissioners. But of course none of that was needed for pre-DR loans because the all the case law was in their favour. You seem to have missed the point that until at least November 2015 the Courts had ruled against HMRC when HMRC tried to argue in Dextra and Sempra and Rangers (FTT & UTT) that loans were taxable on the individual. We know from FOI responses that HMRC first proposed the Loan Charge behind the scenes in September 2015, before the Court of Session deciding on Rangers, at a time when the case law was all in favour of the taxpayer. So why would any taxpayer have felt the need to take a case to Tribunal (they wouldn’t). The Loan Charge was designed to cover HMRC failures in Tribunal. HMRC said of the Loan Charge “We win or we win, clever isn’t it”. The Loan Charge was designed to get around the decisions of the courts. This is your and my HMRC, they don’t play with a straight bat.

2. HMRC and the taxpayers pick from the same pool of barristers and Kings Counsel. That’s the same counsel. That’s the same counsel who might have given positive opinions on the likely outcome of tax schemes. The only way for HMRC to have won all cases would be if barristers were giving opinions they knew couldn’t work (some might say that, but it’s not realistic), or if HMRC manipulated things to ensure that only cases they are likely to win eventually get to Tribunal (that definitely happens where HMRC capitulates on the very steps of the court), or if the courts have got the memo that their pensions might be in jeopardy if they don’t vote for the state.

Even HMRC don’t claim to have won all cases in the last 20 years but the figures in the recent past have been more and more skewed in their favour. That’s interesting to note and you can pick your reasons from the list I’ve given.

[woody1]

You must know that neither part of what you said makes sense.

Of course. That's the reality of using a tax avoidance scheme when the promoter's promises/guarantees/assurances turn out to be worthless. You're on your own.

----

HMRC's handling of schemes over the past 20-odd years has been nothing short of abysmal. I'm not even sure they're doing a much better job now. There's a reason cojak maintains this list; in the hope that it may deter others from falling for these scams.
https://forums.contractoruk.com/hmrc...e-schemes.html

----

HMRC demonstrated back in 2008 just how far they were prepared to go, when they introduced retrospective legislation to clobber one scheme. I know a few people caught up in that one. Some settled, a couple went bankrupt. Bizarrely, a group of them are still fighting on.

----

You talk about people being penalised for doing the right thing. But can you not see the bigger picture? Getting paid in loans, to avoid tax, was never right.

One way or another, tax avoidance, on the industrial scale it became, would never be tolerated. It's highly regrettable HMRC didn't clamp down on this much earlier instead of letting it get completely out of hand. Had they done so, they would never have needed to come up with something as ridiculous as a Loan Charge going back 20 years, just to cover their failings.

[woody1]

Here's something to ponder.

What if someone, who had pre-2011 loans, appealed to the tax tribunal on their own with no representation. What would they have to lose? What good did hiring expensive lawyers ever do in all the cases that have failed so far?

I know someone who did go to the tax tribunal on their own, albeit over a more minor matter. The Judges did not allow HMRC's barrister to bully or intimidate them, or bamboozle them with legalese. They got a fair hearing based on the plain facts.

Now, that is something HMRC wouldn't be expecting...

[loanchargehurt]

Here's something to ponder.

What if someone, who had pre-2011 loans, appealed to the tax tribunal on their own with no representation. What would they have to lose? What good did hiring expensive lawyers ever do in all the cases that have failed so far?

I know someone who did go to the tax tribunal on their own, albeit over a more minor matter. The Judges did not allow HMRC's barrister to bully or intimidate them, or bamboozle them with legalese. They got a fair hearing based on the plain facts.

Now, that is something HMRC wouldn't be expecting...

It would be pretty pointless now for an individual to take an appeal to Tribunal in light of the surprising Supreme Court decision in Rangers and the surprising Court of Appeal decision in Hoey. Collectibility may be another matter though.

Read this article for a view on how surprising was the Supreme Court decision in Rangers:
https://www.taxadvisermagazine.com/a...rs-whod-be-ref

What retrospective legislation are you referring to in 2008? There is a protocol for introducing retrospective legislation, that’s exactly why HMRC have argued the Loan Charge is retroactive not retrospective.

[woody1]

What retrospective legislation are you referring to in 2008? There is a protocol for introducing retrospective legislation, that’s exactly why HMRC have argued the Loan Charge is retroactive not retrospective.

This:

AI Overview

Section 58 of the UK Finance Act 2008 introduced controversial retrospective tax legislation to shut down avoidance schemes that used offshore trusts and double taxation treaties. It altered past tax treatment back to 2001, affecting roughly 2,000 contractors and freelancers, though subsequent legal challenges failed. [1, 2, 3, 4]

Key Aspects of the 2008 Legislation

• Target: Schemes exploiting the UK/Isle of Man and other double taxation treaties to shelter foreign partnership or trust income.

• Mechanism: Section 58(4) was framed as "always having had effect," rendering specific past tax arrangements unlawful retrospectively rather than just from the March 2008 Budget announcement date.

• Scope: Limited by standard assessment time limits to the 2001/2002 tax year onward (barring fraud or negligence).

• Estimated Impact: HMRC estimated about £200 million in tax revenue was at stake from the targeted arrangements. [1, 2, 3, 4, 5]

Controversies and Legal Challenges

• Rule of Law Concerns: Critics and campaign groups like No To Retro Tax argued that making transparent, legal past actions unlawful retroactively damages legal certainty and taxpayer trust. [1, 2]

• Human Rights Claims: Affected taxpayers launched judicial reviews (such as R (Huitson) v HMRC) claiming the law breached Article 1 of the First Protocol (protection of property) under the European Convention on Human Rights. [1, 2]

• Outcome: The UK courts upheld Section 58, ruling that Parliament's intervention was a proportionate legislative response to protect public finances from aggressive tax avoidance.

[woody1]

I bet none of the loan scheme promoters mentioned this to potential clients.

This was the writing on the wall; a sea change moment. Use a tax avoidance scheme and HMRC will, by hook or by crook, nail you.

[loanchargehurt]

I bet none of the loan scheme promoters mentioned this to potential clients.

This was the writing on the wall; a sea change moment. Use a tax avoidance scheme and HMRC will, by hook or by crook, nail you.

They did it by crook.

The argument in 2008 was that it was clarification of legislation announced properly in 1987
4.68 The Government announces, with retrospective effect from 12 March 2008, clarification of indefinitely retrospective legislation introduced in 1987 to counter double taxation treaty avoidance schemes.

Whereas the Loan Charge is a completely new charge but they tried to claim it wasn't retrospective at all.

Some promoters did warn of the risk of retrospective legislation so you just lost your bet. For some the risk was highlighted in every engagement letter with clients and the risk had to be assessed. But then HMRC claim it isn't retrospective so taxpayers are left that they can't argue they were not warned about the risk of retrospection. HMRC have thrown the rulebook out the window and just argue anything that suits them.

[woody1]

HMRC use external barristers to find devious ways of nailing schemes.

They didn't come up with s58 themselves, nor s684, and probably not the loan charge either. Stupid really. They should have put their focus on stopping schemes being created in the first place.

That list of cojak's makes me laugh. There seem to be new ones popping up all the time.

----

Of course, if it hadn't been for IR35, there wouldn't have been a market for these damn things. But that's another story...

[woody1]

It would be pretty pointless now for an individual to take an appeal to Tribunal in light of the surprising Supreme Court decision in Rangers and the surprising Court of Appeal decision in Hoey.

Which is another reason why HMRC/HMT will refuse any further concessions.

You don't have to answer this but think about it. Would you have preferred that McCann (and maybe Morse) hadn't happened, so that everyone was still treated the same?

[loanchargehurt]

Which is another reason why HMRC/HMT will refuse any further concessions.

You don't have to answer this but think about it. Would you have preferred that McCann (and maybe Morse) hadn't happened, so that everyone was still treated the same?

I think I’m about at the end of my tether.

All I’m asking for is that the people who are still affected be treated the same way as those who are to benefit from the McCann Review. I’m pointing out the irony that those who do stand to benefit are the ones who have been the least compliant, potentially all the way through.

And I’m asking why the lobby group don’t focus on that for the sake of the 24,000 victims who are excluded.

Yet you keep arguing with me about how we deserve it being tax avoiders. I’m not asking for any special treatment other than be treated the same as everyone else. Pay income tax but not IHT on what has deemed to be earnings, then let people get on with their life and get back to being productive members of society rather than bankrupt them.