Reply to: Argentia, anyone heard of them?

[DaveB]

OK, try this one for size then:

However, HMR&C have moved the goalposts and decided that actually it was evasion and that everyone should have known it was evasion and therefore everyone deserves huge penalties and fines

Have HMRC said that Mr Huitson is guilty of tax evasion then?

Again, technically, he is according to the letter of the law and I suspect this is exactly what HMRC are saying privately to ministers to justify what they are doing. They know full well they wont get away with in the courts for the reasons I've said before. If they had even the slimmest thought that they could get away with it they would have passed the whole lot over to be dealt with as criminal cases and not civil ones.

[NotAllThere]

Vallah has a problem parsing English, and understanding that "stop" means "stop". But now he's a couple of days for remedial study.

[Vallah]

"and they would have been right - at the time it was avoidance and not evasion. "

Nope - can't see a problem with that.

Or were you unhappy and her calling them a 'crowd'?

OK, try this one for size then:

However, HMR&C have moved the goalposts and decided that actually it was evasion and that everyone should have known it was evasion and therefore everyone deserves huge penalties and fines

Have HMRC said that Mr Huitson is guilty of tax evasion then?

[DaveB]

I'm sorry, but I'm not going to be bullied by you. You're wrong, plain and simple, and you can send me all the warnings you like. What she said is there in black and white:

When the BN66 crowd signed up to the scheme they used they probably used all the same arguments that the EBT guys are using now and they would have been right - at the time it was avoidance and not evasion.

That is not saying they are guilty of evasion, that is saying that at the time the schemes were concieved they were seen as avoidance.

As I said earlier, on strict interpretation of the law it is no longer avoidance and never has been. The fact that HMRC is not prosecuting is something else altogether.

[cojak]

"and they would have been right - at the time it was avoidance and not evasion. "

Nope - can't see a problem with that.

Or were you unhappy and her calling them a 'crowd'?

[Vallah]

She has not made that assertion. I am not arguing with you. I am telling you to STOP.

I'm sorry, but I'm not going to be bullied by you. You're wrong, plain and simple, and you can send me all the warnings you like. What she said is there in black and white:

When the BN66 crowd signed up to the scheme they used they probably used all the same arguments that the EBT guys are using now and they would have been right - at the time it was avoidance and not evasion.

[cojak]

And so you agree with her assertion that the Montpelier contractors are guilty of tax evasion then?

Lisa has said nothing of the sort in this thread. I agree with her when she said that HMRC moves goalposts.

HMRC dislikes tax avoidance as much as it dislikes tax evasion.

The Montpelier contractors are guilty of nothing, as far as I'm aware...

[DaveB]

So in practise, retro changing of laws makes avoidance into evasion, but HMRC will not prosecute as such, meaning that the 200% penalties lisa talked about will never be applied?

Have I got that right?

As it stands now, yes you have. HMRC are persuing the 'outstanding' tax as a civil debt, meaning they can 'only' charge interest on it. DR can correct me on this if I have missed somthing in the regs that means they can apply penalties as well, but I dont think they can.

This may well change if HMRC win the current court cases. A cynic could make all sorts of legal arguments based on that scenario.

[NotAllThere]

And so you agree with her assertion that the Montpelier contractors are guilty of tax evasion then?

She has not made that assertion. I am not arguing with you. I am telling you to STOP.

[sal626]

Following the letter of the law as it now stands after S58, they are.

Post S58, in purely legal terms, the Montpelier schemes are illegal and have been illegal from the day they were concieved.

The fact that HMRC are not persuing them as such is a different matter.

They know very well that they would get nowhere in the courts trying to prosecute people under a law that retrospectively makes criminals of those who were obeying the the law previously.

So in practise, retro changing of laws makes avoidance into evasion, but HMRC will not prosecute as such, meaning that the 200% penalties lisa talked about will never be applied?

Have I got that right?

[DaveB]

And so you agree with her assertion that the Montpelier contractors are guilty of tax evasion then?

Following the letter of the law as it now stands after S58, they are.

Post S58, in purely legal terms, the Montpelier schemes are illegal and have been illegal from the day they were concieved.

The fact that HMRC are not persuing them as such is a different matter.

They know very well that they would get nowhere in the courts trying to prosecute people under a law that retrospectively makes criminals of those who were obeying the the law previously.

[Vallah]

And so is Lisa...

And so you agree with her assertion that the Montpelier contractors are guilty of tax evasion then?

[cojak]

And so is Lisa...

[Vallah]

I'm perfectly aware of the difference between tax avoidance and evasion thanks.

[cojak]

Why tax avoidance is a problem for everyone

The Government, Her Majesty's Revenue & Customs (HMRC) and HM Treasury (HMT) have a shared objective of minimising the tax gap (that is, the difference between the tax collected and the tax we think ought to be collected) within the context of the Government wider agendas. We want to provide our customers with a level playing field while maintaining the UK's international competitiveness. Our strategy for delivering this objective is through encouraging everyone to pay tax at the right time and vigorously tackling those who deliberately avoid their responsibilities.

In the UK the tax loss from avoidance is estimated to run into several billion pounds across both direct and indirect taxes. This directly affects the delivery of public services and long-term economic growth. Avoidance distorts markets, is economically unproductive and breaks the link between economic productivity and reward.

The vast majority of our customers do not participate in tax avoidance and will stand to benefit from HMRC's anti-avoidance strategy. HMRC is taking a proportionate, risk - based approach to avoidance, which is consistent with HMRC's commitment to supporting our customers.

What is tax avoidance?

HMRC's Anti-Avoidance Group (AAG) offers guidance about what factors indicate that tax avoidance may be occurring. It is impossible to provide a comprehensive definition of avoidance - HMRC's guidance describes the sorts of activity that HMRC may perceive as avoidance.

Based on an understanding of HMRC's guidance, our customers ought to be aware when they are undertaking activities that HMRC may regard as tax avoidance and thus taking on higher risks.

Lists of Signposts

# Transactions or arrangements where the income, gains, expenditure or losses falling within the UK tax net are not proportionate to the economic activity taking place or the value added in the UK - especially where the transactions or arrangements are between associates within the same economic entity and would not have occurred between parties acting at arm's length and/or add no value to the economic entity as a whole. For example:

* The transfer of ownership of an income stream from a UK resident company to an associated company resident in a low/no tax jurisdiction in circumstances where the economic activity giving rise to the income does not accompany the transfer of ownership and/or where no economic benefit accrues to the economic entity as a whole.

# Tax law is sometimes enacted to target particular transactions or arrangements and give them a particular tax result. Alternative transactions or arrangements designed to sidestep the effect of such legislation, but which otherwise achieve the same result, constitute a signpost. For example:

* Arrangements designed to give the same effect as a share redemption without constituting one in law to frustrate the operation of section 91A or 91B FA 1996 (shares treated as debt).

I've put the key words regarding avoidance in bold for you.

(The dangerous phrase is in red)

As I said, HMRC want to treat both the same.