Reply to: Loan Charge in PMQ's today.

[webberg]

Are you still only reasonably good or are you beating the HMRC good? Just wondering :-)

I think that's for others to say.

My background is out there in public. HMRC/private practice/banks/tax house/recovery business/WTT.

I'm not a magic circle tax lawyer but equally I don't charge £1k (or more) and hour.

I'm not Big 4 trained or have worked there (with them yes, but not as one of them) but given that they ran for the hills on tax schemes a decade ago, I have more recent experience.

I don't want to "beat" HMRC. I want the rule of law to be applied because that is the only way in which everybody gets treated fairly.

Am I good enough to achieve that? Time will tell.

[dammit chloe]

I would say that 75% of the people I know in the tax world, arrived here by accident.

Personally, I joined the Civil Service a long time ago. I was offered three posts, one of which was in a warm office in the middle of winter, Inland Revenue.

I took it because I didn't want to freeze my bits off on Salisbury plain.

To my surprise (and my then manager's) I found I liked it and was reasonably good at it (or at least not so bad that it showed).

My respects to those who made a conscious decision to get into tax.

Are you still only reasonably good or are you beating the HMRC good? Just wondering :-)

[webberg]

I would say that 75% of the people I know in the tax world, arrived here by accident.

Personally, I joined the Civil Service a long time ago. I was offered three posts, one of which was in a warm office in the middle of winter, Inland Revenue.

I took it because I didn't want to freeze my bits off on Salisbury plain.

To my surprise (and my then manager's) I found I liked it and was reasonably good at it (or at least not so bad that it showed).

My respects to those who made a conscious decision to get into tax.

[dammit chloe]

Sorry, I don't do political.

I don't do tax law but I have had to learn just how tedious and arcane most of it is. I worry for someone that likes it :-).

[Iliketax]

Technically probably. Politically maybe not.

Sorry, I don't do political.

[Iliketax]

If spreadsheet Phil applied normal time limits (i.e. 4 years where all information was provided) to schedule 11 and 12 then closed / unprotected years will be out of scope of the loan charge.

True. But that's not what the change to the Finance Bill is about. There are no time limits for the "recovery of lost tax" in Schedule 11 or 12. What Schedule 11 does is create a "relevant step" on 5 April 2019 and then something else (Part 7A ITEPA) taxes it. Once it taxes it in April 2019, the normal time limits apply. Schedule 12 does something similar for the self-employed.

[GreenMirror]

Interesting as usually HMRC dictate the finance bill and MPs rubber stamp it. In 2008 many MPs objected but had to vote for the finance bill. But they could note vote agaoinst as that is a vote of no confidence in the government.

If the government does not change its mind then MPs will vote for it. There is no chance of a vote of no confidence in the finance bill/government.

[wilks]

The new section says:



Looking at this from a DR perspective, it says:



So at its simplest, I'd expect something like this:



Now obviously the Chancellor can print it on coloured paper, do a bit of double underlining and an executive summary. But I can't see it needs much more than that.

_________

If spreadsheet Phil applied normal time limits (i.e. 4 years where all information was provided) to schedule 11 and 12 then closed / unprotected years will be out of scope of the loan charge.

I dont think s/s Phil will agree to this at all even if Nicky Morgan (Chair Treasury committee) and HOL report has requested this.

[demby]

There is a not so subtle difference.

Tax avoidance loan schemes and the loan charge - GOV.UK

S58 - £200m

LC - £3,200m

That's nearly 10% of the EU divorce bill.

Or just 1 and a half weeks NHS cost

[stonehenge]

There is I think a crucial difference. Whether it is enough to tip the balance I don't know.

With section 58, there was a very clear position from HMRC/Government that although the arrangements were understood and accepted as working as advertised as they followed a very literal interpretation of the law as it then stood, the law was poorly crafted and it was never the intention that the advantage be created. Consequently, retrospection was appropriate given that the disparity between written law and intended law, was essentially an error.

With loan schemes, Mel Stride and crew say that the schemes were always defective and that the law at the time (being for 10 years before the law even existed of course) was effective to prevent the "abuse". However, just to make sure, the loan charge is now to be introduced in order to "solve" the equation.

Subtle but important distinctions I think.

There is a not so subtle difference.

Tax avoidance loan schemes and the loan charge - GOV.UK

S58 - £200m

LC - £3,200m

That's nearly 10% of the EU divorce bill.

[dammit chloe]

The new section says:



Looking at this from a DR perspective, it says:



So at its simplest, I'd expect something like this:



Now obviously the Chancellor can print it on coloured paper, do a bit of double underlining and an executive summary. But I can't see it needs much more than that.

Technically probably. Politically maybe not.

[Iliketax]

Does this amendment promise a review of the loan charge, or promise a review of the new extended time limits for offshore matters, including a comparison with other time limits including for the loan charge - where normal time limits apply to a brand new tax charge. I'm far from convinced that what has been won, is worth anything at all despite the rhetoric and repeated statements that this is a review into the loan charge itself.

The new section says:

Review of changes made by sections 79 and 80
(1) The Chancellor of the Exchequer must review the effects of the changes made by sections 79 and 80 to TMA 1970, and lay a report on that review before the House of Commons not later than 30 March 2019.

(2) The review under this section must include a comparison of the time limit on proceedings for the recovery of lost tax that involves an offshore matter with other time limits on proceedings for the recovery of lost tax, including, but not limited to, those provided for by Schedules 11 and 12 to the Finance (No. 2) Act 2017.

(3) The review under this section must also consider the extent to which provisions equivalent to section 36A(7)(b) of TMA 1970 (relating to reasonable expectations) apply to the application of other time limits.

Looking at this from a DR perspective, it says:

(2) The review ... must include a comparison of the time limit[s] on ... recovery of lost tax that involves an offshore matter with other time limits ... , including ... [the April 2019 loan charge ones]

So at its simplest, I'd expect something like this:

Dear House of Commons

Normal (inc Sch 11 and 12)	Offshore matter
4, 6 or 20 years	12 or 20 years

Love and kisses

Spreadsheet Phil

PS: there are no equivalent provisions to section 36A(7)(b).

Now obviously the Chancellor can print it on coloured paper, do a bit of double underlining and an executive summary. But I can't see it needs much more than that.

[smalldog]

There is I think a crucial difference. Whether it is enough to tip the balance I don't know.

With section 58, there was a very clear position from HMRC/Government that although the arrangements were understood and accepted as working as advertised as they followed a very literal interpretation of the law as it then stood, the law was poorly crafted and it was never the intention that the advantage be created. Consequently, retrospection was appropriate given that the disparity between written law and intended law, was essentially an error.

With loan schemes, Mel Stride and crew say that the schemes were always defective and that the law at the time (being for 10 years before the law even existed of course) was effective to prevent the "abuse". However, just to make sure, the loan charge is now to be introduced in order to "solve" the equation.

Subtle but important distinctions I think.

Its sure gonna be interesting to see if anything unfolds. The old pay fair share seems to be the Its a knockout joker, see if that washes this time. I have already written to my MP anyway saying if Loan charge gets a concession on retrospection as a victim of S58 I expect the same treatment having declared in all SA's my position with sweet FA being done about it until 8 years later, regardless of any subtleties. Unintentionally the Loan charge debate may (I stress may not will) help those on S58, Lets see!!

Hi Hector BTW!

[webberg]

Yep and when the govt was asked to explore impacts on the scheme users with the same issues as those facing the loan charge (bankruptcy, suicide, broken families) they said it would be too costly and time consuming and ultimately (here we go again!), they just want people to pay their fair share....ground hog day beckons.

There is I think a crucial difference. Whether it is enough to tip the balance I don't know.

With section 58, there was a very clear position from HMRC/Government that although the arrangements were understood and accepted as working as advertised as they followed a very literal interpretation of the law as it then stood, the law was poorly crafted and it was never the intention that the advantage be created. Consequently, retrospection was appropriate given that the disparity between written law and intended law, was essentially an error.

With loan schemes, Mel Stride and crew say that the schemes were always defective and that the law at the time (being for 10 years before the law even existed of course) was effective to prevent the "abuse". However, just to make sure, the loan charge is now to be introduced in order to "solve" the equation.

Subtle but important distinctions I think.

[smalldog]

About Section 58 | No To Retrospective Taxation

Yes I remember reading this at the time thinking there but for the grace of god go I.

Yep and when the govt was asked to explore impacts on the scheme users with the same issues as those facing the loan charge (bankruptcy, suicide, broken families) they said it would be too costly and time consuming and ultimately (here we go again!), they just want people to pay their fair share....ground hog day beckons.