HMRC Consultative Document - marketed tax avoidance schemes

[varunksingh]

Two snippets from me,

Firstly, if contacting non-tory MPs, does anyone think it is worth highlighting how this policy appears to be highly politically motivated, and aimed at securing a fighting fund the chancellor can use as a giveaway ahead of the next election? Add in that the burden of repaying the tax plus interest is going to fall on to a future government, rather than the current incumbent.

I also found this regarding a couple of other pieces of retrospective taxation that reduced the statute of limitation for the taxpayer to claim back overpaid tax.

Tax Analysts -- U.K.'s Retroactive Shortening of Tax Restitution Statute of Limitations Violates EU Law, Advocate General Says

What's interesting is how both were ruled invalid due to the following ...

the advocate general took the position that the key issue is that because the legislation was introduced retroactively and without notice, and with no transitional arrangement offered, taxpayers were caught by surprise and left unable to pursue a claim they had already started.

I think it would make for an interesting discussion with your MP if you were able to highlight that retrospective legislation has been challenged, and ruled against in European courts, and the cost of reimbursing any taxpayers caught by this new proposed legislation will fall entirely on a future government.

Many thanks zaphrus. A really good link.

[DonkeyRhubarb]

Boyle

http://www.taxation.co.uk/taxation/A.../elephant-room

"Late last year HMRC won the case of Philip Boyle v HMRC (TC 03103) at the FTT. In their Spotlight publication of December 2013, HMRC hinted that many other “contractor loan schemes” would come within the Boyle decision. And, in a press release of 9 December 2013, HMRC said that about 15,000 people used tax planning schemes which were similar to the one used by Philip Boyle."

"Therefore, while the Boyle case has a superficial and peripheral resemblance to some other tax planning arrangements, HMRC would convince themselves that this case, assuming it is final, was “relevant to the circumstances” of all the other 15,000 or 16,000 contractor cases and issue payment demands."

[varunksingh]

http://www.taxation.co.uk/taxation/A.../elephant-room

"Late last year HMRC won the case of Philip Boyle v HMRC (TC 03103) at the FTT. In their Spotlight publication of December 2013, HMRC hinted that many other “contractor loan schemes” would come within the Boyle decision. And, in a press release of 9 December 2013, HMRC said that about 15,000 people used tax planning schemes which were similar to the one used by Philip Boyle."

"Therefore, while the Boyle case has a superficial and peripheral resemblance to some other tax planning arrangements, HMRC would convince themselves that this case, assuming it is final, was “relevant to the circumstances” of all the other 15,000 or 16,000 contractor cases and issue payment demands."

and from the same article "Who is next?" and "Risks and retrospection" are same as what I have been saying all along.

[DonkeyRhubarb]

But David Gauke has said that "follower cases" will only affect 4,000 taxpayers in the next 2 years.

Tax Avoidance: 3 Feb 2014: Hansard Written Answers - TheyWorkForYou

Does anyone really believe that?

[VictorValiant]

Belief?

Based on his previous U-turns on retrospection then you cannot believe his comments. Particularly as they have already stated a figure of some 65,000 targeted in their own documentation. What amazes me is that -unless you are a contributor to this or similar forums - there is a good chance that you will not be aware of the proposals until it is too late: no forewarning; no "heads up"; no official letter summarising the intent - it will be law and you won't have a leg to stand on.

[DonkeyRhubarb]

Based on his previous U-turns on retrospection then you cannot believe his comments. Particularly as they have already stated a figure of some 65,000 targeted in their own documentation. What amazes me is that -unless you are a contributor to this or similar forums - there is a good chance that you will not be aware of the proposals until it is too late: no forewarning; no "heads up"; no official letter summarising the intent - it will be law and you won't have a leg to stand on.

Yep, the first most people will be aware of this is when the brown envelope arrives saying pay up in 90 days.

Some consultation it is when they don't even inform the people who will be affected.

[zaphrus]

It's interesting that the consultation duration lasted just 4 weeks, according to

Code of Practice on Consultation



And then



I'm guessing the provision will be "to get this ready in time for the budget", however I don't believe this was indicated in the consultancy document?

Then

Consultation Principles





The most important part being



Is it possible that this consultancy has not abided by their own framework?

That's really interesting ... if they have violated their own consultation framework, then can it be argued that the proposed law cannot stand? If that's the case, then it would be worth trying to delay the law passing, as I'm sure I read in the draft legislation that a follower notice can only be issued within 12 months of either a case being opened, or a similar case being final (Boyle), now if the law wasn't able to pass until 12 months after the Boyle ruling, then follower notices could not be issued in respect of Boyle.

[zaphrus]

But David Gauke has said that "follower cases" will only affect 4,000 taxpayers in the next 2 years.

Tax Avoidance: 3 Feb 2014: Hansard Written Answers - TheyWorkForYou

Does anyone really believe that?

Probably worth mentioning the discrepancy in figures when writing to your MP.

[SantaClaus]

It's interesting that the consultation duration lasted just 4 weeks, according to

Code of Practice on Consultation



And then



I'm guessing the provision will be "to get this ready in time for the budget", however I don't believe this was indicated in the consultancy document?

Then

Consultation Principles





The most important part being



Is it possible that this consultancy has not abided by their own framework?

Very interesting point. It does say in the document that they have no legal obligation to abide by their own code which makes me wonder why they even bother with a code of conduct. Ah yes, I remember now... some overpaid management consultancy gets a huge fee to come up with this stuff.

Considering the usual consultation period is 12 weeks and they have only given us 4 weeks, despite this proposed legislation affecting 65,000 people, it stinks to high heaven. This is typical of the underhand way that HMRC go about their business.

I've sent this to the NTRT Steering Group to see if anything can be done. I think it's also worth stating in any communications to the consultation/your MP that HMRC/govt have broken their code of conduct.

[flamel]

My response has been sent for what it's worth, I say, feeling like King Canute in a sea of pirates known as HMRC