Reply to: What's the big deal with BN66?

[DonkeyRhubarb]

As I said before, the game is not over yet.

A lot of you believe we will ultimately lose, and you may be right but it's got a way to go yet.

So far, HMRC have not had to reveal their hand.

For example, in the JR they did not put forward a single legal opinion they had obtained on the scheme. The only opinion they offered was one sought on behalf of a taxpayer (AJ - Suo Motu).

They also haven't had to disclose the advice they gave to Ministers when proposing BN66.

The Court of Appeal could ask to see these documents.

Given that Montpelier are paying all the legal costs and have pledged to take it to Europe if necessary, we've got nothing to lose by just sitting back and seeing what happens.

[centurian]

I question your statement that you dont think the fact HMRC never took it to court doesnt equate to it ever being 100% legal.

In other words, if you dont prove something is in fact illegal, it must be considered legal.

Sorry, but I just don't agree. It just means it's undecided. What's legal or not is decided by courts, not the legal advisors of HMRC in deciding whether or not to pursue a case.

If HMRC had, say a 10% chance of success, HMRC would probably decide not to take it to court, but that doens't mean it's 100% legal - just that it's not worth the effort of pursuing it considering the high risk of the judgement going against them.

In criminal law, the police/CPS don't always prosecute. That doesn't mean the actions were legal - in fact the CPS can change their mind at any point up to the statute of limitations. Legality is only determined by a conviction/aquital in court.

I'm still on your side, certainly in terms of retrospection, but I would now consider that claiming the scheme was 100% legal is overstating the situation a bit.

[AtW]

In other words, if you dont prove something is in fact illegal, it must be considered legal.

Well, since you have not proven in court that alleged HMRC's "retrospection" is illegal, then it must be legal according to your own words.

[BolshieBastard]

So it was never actually tested in court. I was under the impression (from the various BN66 threads) that it was proven to be legal.

I admit it looks like you had a good chance you would have won, but I don't think the fact that HMRC never took it to court automatically equates to the scheme ever being 100% legal.

HMRC never actually challenged the legality of the IoM scheme in either a court or via the 4 test cases they stated they would put before the commissioners.

The BN66 issue in court didnt actually test the legality of the IoM scheme either although the learned judge commented that it appeared to be legal.

However, the court action re BN66 is over the use of retrospective legislation to make the scheme illegal.

I question your statement that you dont think the fact HMRC never took it to court doesnt equate to it ever being 100% legal.

I'd argue that if an activity is considered 'illegal' but that no official body is prepared to test that question of legality directly in court, then, de facto, that action is, legal.

In other words, if you dont prove something is in fact illegal, it must be considered legal.

[centurian]

The legality of the scheme appears indisputable since hMRC never tested it in court.

So it was never actually tested in court. I was under the impression (from the various BN66 threads) that it was proven to be legal.

I admit it looks like you had a good chance you would have won, but I don't think the fact that HMRC never took it to court automatically equates to the scheme ever being 100% legal.

[Incognito]

And as I keep saying, I dont really care what your opinion is either.

A very well presented argument so it warrants a response.

Its a bit rich of you to claim you are working towards some law degree and then say MP's scheme didnt work \ wasnt legal just because they had a few pieces of paper. You are talking about mP's legal counsel I take it who are respected tax lawyers?

You've misconstrued my argument. At the end of the day, lawyers are paid for their 'opinions,' the justiciary are paid for their 'judgements,' that's the difference and that's why you shouldn't really place your wholehearted faith in those 'pieces of paper.' from mP's counsel.

Not only that but the Suo Moto scheme (the provider of which was in dispute with MP) had been involved with a settlement with HMRC regarding their scheme.

That's always puzzled me, if you read the IoM judgement on the dispute, it appears that AJ had it from another legal source that the scheme didn't work (assuming Suo was similar to mP). Were mP ever aware of that advice?

OK I agree law is down to interpretation but you cant call it bits of paper when you yourself are working towards a similar qualification.

I was referring to counsels advice that the scheme would work, not referring to anyone's qualifications or suitability to practice law.

You use emotive words like fool and liar and state the scheme was illegal.

I never stated it was illegal, I said in my opinion it didn't work. Big difference and HMRC seem to agree as well which is why you aren't being hit with penalties on top of the statutory interest.

You state this issues aggrivates you because the users took a gamble. Tell me what is different between that and the gamble many iT contractors take over IR35?

Absolutely no difference at all. You're entirely correct, it's exploiting the system and it's taking a risk measured against your chances of getting away with it. I'm not aggrieved because people TOOK the gamble; it noises me up when people are complaining because the gamble failed. I would say the same thing to someone caught by IR35, you took the risk, no-one else.

Tax laws as well as other laws have always been full of loopholes. Loopholes have always been exploited, to use your venacular again. Where is your indignantion about these?

I've told you, it's not the use of the loophole, it's complaining after you're caught that irritates. And I don't mean to offend by that, everyone has the right to complain, but it's the 'victim' mentality which is a bit much.

[AtW]

You state this issues aggrivates you because the users took a gamble. Tell me what is different between that and the gamble many iT contractors take over IR35?

I know you are not listening, but the difference is huge because the difference between tax due and tax paid would be much higher in this BN66 case: this means your exposure is much higher in case of having to pay up.

By extension this means that the scheme that costs HMRC more will attract more attention, especially the scheme that appears to piss all over HMRC.

Furthermore IR35 is personal - you'd have to pursue many different separate people, where as in this "scheme" they've clustered nicely by joining this "scheme".

[BolshieBastard]

Yeah, maybe it has, I apologise if I've cause offence.

As I keep restating, whether you win or lose is of no consequence to me.

The way I see it is members of the scheme took a gamble when they joined the scheme. I was told of a 'great' IoM scheme about 4 years ago, may have been MontP and I had a look at it. I decided there was no way I was going to get involved in it, not out of any moral sense of duty to pay my fair share of tax, but because there was no way in this world I could see me getting away with it. I don't care how many little bits of paper the scheme providers had in front of them because at the end of the day it has no legal bearing, it's just one man's musings on whether or not it works.

This is what agitates me. Scheme members took a gamble. Anyone that says they quite honestly thought it was a 100% legit scheme with no risk attached at all is either a liar or a fool. It's not tax planning, it's exploiting what they think is a loophole. And if you get away with it then well done, it was a risk worth taking. But all the bleating from the crowd about the Human Rights; being forced into the scheme because of IR35; HMRC are out to get you; Labour are going to get us all next; it's just not fair; and so on and so on is what annoys me personally.

And with that I'll leave you to fight your case. Good luck, I believe you will need it.

And as I keep saying, I dont really care what your opinion is either. I made a couple of posts on this thread to give a scheme user's perspective in response to the thread title. I dont want your sympathy. I dont think any of the scheme's users want your sympathy either.

If you thought about joining a great IoM scheme 4 years ago, it may or may not have been our scheme as there was more than one.

The fact of the matter is, if we'd have heard of the IoM scheme 4 years ago, we probably wouldnt have joined either because HMRC had started to investigate it a few years before that and actually had 4 scheme users which they said they would put before commissioners to determine the scheme's legality.

Not only that but the Suo Moto scheme (the provider of which was in dispute with MP) had been involved with a settlement with HMRC regarding their scheme.

I'd already left the scheme by this time but for other reasons.

Its a bit rich of you to claim you are working towards some law degree and then say MP's scheme didnt work \ wasnt legal just because they had a few pieces of paper. You are talking about mP's legal counsel I take it who are respected tax lawyers?

OK I agree law is down to interpretation but you cant call it bits of paper when you yourself are working towards a similar qualification.
You use emotive words like fool and liar and state the scheme was illegal. That's your opinion. It isnt MP's tax lawyers opinion. The law will ultimately decide who is correct but forgive me, I think I know who's view on legality of the scheme I'll believe. And its not someone using emotive terms suchs as fools, liars and getting away with it.

You state this issues aggrivates you because the users took a gamble. Tell me what is different between that and the gamble many iT contractors take over IR35?

Please dont say you have organised your tax affairs to be inside \ outside of iR35 because Im talking about the vast numbers of contractors who 'gamble' over iR35.

Are you going to get all indignant over them if they are deemed iR35 caught?

I tell you what, even if you organise your contract to be outside iR35, there still a risk someone can be deemed caught because of the info the client co may supply to hMRC in their loaded questions. In any event, only the Tax Commissioners can truely determine your iR35 status so there's still this huge risk or gamble you use against the IoM scheme.

People who are in this battle arent 'bleating' because HMRC say the scheme is illegal and therefore owe thousands, per se.

They are 'bleating,' to use your emotive language again, because HMRC took no action to determine the scheme's illegality (note, illegality) for 8 years and after they had selected 4 test cases some years prior to that.

If HMRC had of proved the scheme illegal in 2002 when suo moto made them aware of the scheme, do you seriously think people would still have used it from that point onwards?

If the scheme had of been deemed illegal not just someone's 'impression' of it being illegal and people had then continued to use it, then you would have a point. But they didnt and I consider you dont.

Tax laws as well as other laws have always been full of loopholes. Loopholes have always been exploited, to use your venacular again. Where is your indignantion about these?

Remember the Sark Lark? That was a tax loophole. Once deemed illegal guess what? No one used it again. Wonder why!?

Do we start using retrospective law changes for all of these loopholes or just the ones you dont agree with? I think your arguments are pretty weak and based on your own prejudices.

[AtW]

My comment was meant for your donkey

[DonkeyRhubarb]

You are either incredibly brave or incredibly desperate.

Good luck.

Actually neither. Personally, I could settle tomorrow, and I have a CTD to stop any interest.

Montpelier are paying all the legal costs, so I've nothing to lose by sitting back and seeing what happens.

Those who can't afford to settle ain't got much to lose either. If it drags on for a few years, then at least it gives them time to save.

[AtW]

the human rights aspect of retrospective legislation to make the scheme illegal.

Millions of those killed by murderous regimes are turning in their mass graves now when human rights laws are used to justify right to reduce one's tax to near zero (in words of the judge).

Anyone who brings up a case citing human rights that does not involve proper human rights violations like torture, slavery etc deserves to have the case chucked out in automatic loss of argument.

[AtW]

You are either incredibly brave or incredibly desperate.

Good luck.

[DonkeyRhubarb]

You think you've got more resources such as time and money than HMRC?

Not more than HMRC.

But more than enough to fight it until every avenue of appeal has been exhausted, and better motivated than a public body.

I know, for example, that the consortium of property developers represented by PwC have already pledged £1M.

Montpelier have their own commercial vested interest for fighting this to the bitter end.

[BolshieBastard]

So was it actually legal or not ? That sounds like it could have fallen one way or the other.

HMRC selected 4 users of the IoM scheme with the intention of putting them before the Tax Commissioners. HMRC never did put these 4 test cases to the test.

Wonder why? Perhaps its because their counsel told them the scheme was legal and they had a less than 50 \ 50 chance of winning? The alternative is after selecting the 4, they, hMRC, sat on their arses for the next 4 or 5 years and waited until with no more options left to ensure their view would prevail, they had retrospective legislation enacted.

The legality of the scheme appears indisputable since hMRC never tested it in court. The learned judge in our case also suggested the scheme was legal but, he wasnt specifically considering the legality of the scheme, more so the human rights aspect of retrospective legislation to make the scheme illegal.

[AtW]

HMRC have a long road ahead before they see a penny out of anyone.

You think you've got more resources such as time and money than HMRC?