Representing yourself at an FTTT hearing

[Guy Incognito]

Would be interesting to find out if those companies found 'guilty' got doubled taxed though.

I very strongly suspect that they were all skint and CBS had to pay.

[eek]

It’s the same as the IRS, HMRC are happy to investigate low paid workers as it’s mostly easy wins because they don’t know how to respond.

[GregRickshaw]

I am reading through all of the CHRISTIANUYI cases - I feel like that innocent guy in the prison library.

If you want to use HMRC Explanatory notes in your argument, you can use this from Christianuyi Ltd & Ors v Revenue and Customs (INCOME TAX/CORPORATION TAX : Employment income) [2016] UKFTT 272 (TC) (21 April 2016) (bailii.org)

295. It is well-established that it is permissible to have recourse to Explanatory Notes as an aid to the construction of a statute. In WestminsterCityCouncil v National Asylum Support Service [2002] UKHL 38 Lord Steyn said at [5]:

“Insofar as the Explanatory Notes cast light on the objective setting or contextual scene of the statute, and the mischief at which it is aimed, such materials are therefore always admissible aids to construction.”[8]

Reading those makes you realise the poor sods caught up in it were just trying to do a decent days work, not tax dodgers or avoiders by aggressive choice. Yes they were hopelessly naive through lack of understanding but there was never any malice or avoidance by choice. They proved through witness statements they were just a business getting on with the day. So sad reading this and it does make you realise the CK and Boox clients have zero chance of winning.

Yes the MSCP seems a slam dunk but the individuals really do not deserve this fate, I suspect like the CK and Boox clients they weren't exactly living in clover.

HMRC should not be going after individuals in these cases, it's the same in my mind as the loan providers the scheme providers, they prey on the weakness and ignorance (no defence I know before I get shouted down) but this/that was all wrong. I doubt the providers got even as much as a tap on the wrist.

Sad times

Would be interesting to find out if those companies found 'guilty' got doubled taxed though.

[Guy Incognito]

I am reading through all of the CHRISTIANUYI cases - I feel like that innocent guy in the prison library.

If you want to use HMRC Explanatory notes in your argument, you can use this from Christianuyi Ltd & Ors v Revenue and Customs (INCOME TAX/CORPORATION TAX : Employment income) [2016] UKFTT 272 (TC) (21 April 2016) (bailii.org)

295. It is well-established that it is permissible to have recourse to Explanatory Notes as an aid to the construction of a statute. In WestminsterCityCouncil v National Asylum Support Service [2002] UKHL 38 Lord Steyn said at [5]:

“Insofar as the Explanatory Notes cast light on the objective setting or contextual scene of the statute, and the mischief at which it is aimed, such materials are therefore always admissible aids to construction.”[8]

[Guy Incognito]

T242 - Making an appeal - First-tier Tribunal Tax Chamber (04.18) (publishing.service.gov.uk)

[Guy Incognito]

The Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (legislation.gov.uk)

[GregRickshaw]

A couple of things -

Ideally the test cases would have expert representation. A good percentage of those affected will have insurance, and I imagine the insurers are also keen to prove their worth. If HMRC lose all the test cases, the rest of you may not have cases to answer at all.

Secondly, I'm really surprised you want to be a test case. I genuinely don't mean this in any way disparaging or criticising, but from earlier posts you seemed extremely stressed by the whole situation to the point where you wanted to pay to make it go away. Being a test case will be incredibly stressful - are you sure it's what you want?

No that's cool I have come a long way since those early days. Watched many webinars, read many pieces and generally blown out a huge load of air. Headless chicken mode was indeed invoked early on. In a way I'm glad this has rumbled on it's made me much more focused and less stressed.

Quick update from CK, they have suggested a similar thing (and they have more than enough volunteers apparently), those with insurance and expert reps should go first as as you say if all five cases collapse then it may all go away.

However, I am prepared now to fight my case should it come down to individual cases mainly thanks to the strength of this forum.

[hobnob]

In fact, one of the contractors whose appeal was overturned in this ruling, Dr Jacek Trzaski, was: “was unaware that he had a registered office or that he needed one” and was unaware that he had needed a company secretary or, indeed, that he had one.”

The company secretary bit is odd. Obviously it's a problem if you're not aware that you have one, i.e. a director should know who the company's officers are. However, that role has been optional since 6th April 2008.

The linked article is from April 2016, and "The determinations and decisions were made for the tax years 2007/08 to 2009/10". Maybe the Articles of Association referred to a company secretary, either because the company was created in 2007 or because the MSCP used the same standard template after the role became optional?

Anyway, it makes sense for anyone who's used CK/Boox to check whether their company has a secretary, but no need to panic if it doesn't have one.

[eek]

A couple of things -

Ideally the test cases would have expert representation. A good percentage of those affected will have insurance, and I imagine the insurers are also keen to prove their worth. If HMRC lose all the test cases, the rest of you may not have cases to answer at all.

Secondly, I'm really surprised you want to be a test case. I genuinely don't mean this in any way disparaging or criticising, but from earlier posts you seemed extremely stressed by the whole situation to the point where you wanted to pay to make it go away. Being a test case will be incredibly stressful - are you sure it's what you want?

I wouldn't say it's just ideal that the test cases have expert representation - it's essential that they do - I half suspect some that the MSC legislation is only being used because the initial CBS judgement opened up whole areas for HMRC to attack that they never dreamed would be possible.

The issue then becomes a different one of who is going to pay for that expert representation and that is going to require fund raising and probably a few accountancy firms contributing to ensure they aren't next in line.

[mudskipper]

Food for thought though. Someone has to go first though.

A couple of things -

Ideally the test cases would have expert representation. A good percentage of those affected will have insurance, and I imagine the insurers are also keen to prove their worth. If HMRC lose all the test cases, the rest of you may not have cases to answer at all.

Secondly, I'm really surprised you want to be a test case. I genuinely don't mean this in any way disparaging or criticising, but from earlier posts you seemed extremely stressed by the whole situation to the point where you wanted to pay to make it go away. Being a test case will be incredibly stressful - are you sure it's what you want?

[GregRickshaw]

Food for thought though. Someone has to go first though.

[DealorNoDeal]

Great article thank you. I wonder if this is the way I may go. I have no insurance for this.

Personally, I would only consider doing this after the 5 test case appeals have run their course.

The real MSC at times didn't even know the company name the MSCP had given them!

Yep, that probably applied to most of CBS' clients. They were just allocated a random company by CBS. Even the guys that went to court were clueless about their companies.

Once the MSC legislation came into force, CBS went on to create 1400 new companies in the period 2007 to 2010, 1000 of which were personal service companies. Most of these companies used CBS for their registered address and for company secretarial services.

Several key signs that that the contractors concerned were not in control of their own affairs emerged during this period: the contractors were unaware of the need for a registered office address and that they had a choice; and none were given guidance about the requirement for a company secretary and that they could appoint their own.

In fact, one of the contractors whose appeal was overturned in this ruling, Dr Jacek Trzaski, was: “was unaware that he had a registered office or that he needed one” and was unaware that he had needed a company secretary or, indeed, that he had one.”

[GregRickshaw]

NOTE: this is for people who don't have insurance that would cover the cost of representation

Normally I'd agree with this:
https://www.phrases.org.uk/meanings/...-a-client.html

However, in the case of CK and Boox, there is an argument to be made for representing yourself.

Firstly, on cost. The cost of hiring advisors, barristers to represent you can run into to tens of £thousands. It could even end up being more than what you potentially owe in tax. And the FTTT virtually never awards costs, so if you win you won't be able to get HMRC to pay your legal fees. (Obviously, the flip side of this is, if you lose, HMRC can't sting you for their legal costs.)

Second, the hearing will be all about what happened on the ground. The question, as to whether your company was an MSC or not, will rest on the facts of how you ran the company on a day to day basis, and you know that better than anyone else.

Some may fear being intimidated by HMRC lawyers. However, I know of a couple of people who represented themselves at the FTTT, and the Judges did not allow that to happen. In fact, they were very helpful.

So, in short, I don't think it's necessarily a bad idea to represent yourself in this instance.

Great article thank you. I wonder if this is the way I may go. I have no insurance for this.

BTW I did what cojak k suggested in the early days of this post and found literally everything about my LTD which proves (apart from the sodding fee) there is no way I could be an MSC. When I consulted with WTT initially they said because you know so much about your own company there is a good chance. The real MSC at times didn't even know the company name the MSCP had given them!

[cojak]

Thanks DOND, duly stickied.

[DealorNoDeal]

NOTE: this is for people who don't have insurance that would cover the cost of representation

Normally I'd agree with this:
https://www.phrases.org.uk/meanings/...-a-client.html

However, in the case of CK and Boox, there is an argument to be made for representing yourself.

Firstly, on cost. The cost of hiring advisors, barristers to represent you can run into to tens of £thousands. It could even end up being more than what you potentially owe in tax. And the FTTT virtually never awards costs, so if you win you won't be able to get HMRC to pay your legal fees. (Obviously, the flip side of this is, if you lose, HMRC can't sting you for their legal costs.)

Second, the hearing will be all about what happened on the ground. The question, as to whether your company was an MSC or not, will rest on the facts of how you ran the company on a day to day basis, and you know that better than anyone else.

Some may fear being intimidated by HMRC lawyers. However, I know of a couple of people who represented themselves at the FTTT, and the Judges did not allow that to happen. In fact, they were very helpful.

So, in short, I don't think it's necessarily a bad idea to represent yourself in this instance.