HMRC using s684 ITEPA 2003 retrospectively with 2001/2 and 2002/3

[woody1]

Just emailed my MP regarding 2002/3.

Am I reading this through rose-tinted specs? Is it reasonable to assume there should be no liability through Montpelier for 2002/ 2003?

Appreciating that "reasonable" or "lawful" is not necessarily anything that would prevent HMRC from carrying on their pursuit...

Thanks

Probably, sadly. I can't see HMRC conceding any years without a monumental fight.

According to another thread in this forum, it was Montpelier themselves who claimed that 2001/2/3 were out of reach of HMRC but they might have just been touting this as a way of extracting yet more money from scheme users.

[Captain Slog]

Just emailed my MP regarding 2002/3.

Am I reading this through rose-tinted specs? Is it reasonable to assume there should be no liability through Montpelier for 2002/ 2003?

Appreciating that "reasonable" or "lawful" is not necessarily anything that would prevent HMRC from carrying on their pursuit...

Thanks

[Captain Slog]

Good afternoon all!

I haven't been online for a while, because of work and family commitments and, like some of the new posters got myself into a spiral of depression/ anger/ frustration and couldn't bear to see how Our Government and Public Servants can, time and time again, hound members of their public to such levels of desperation.

I 'popped' on today, to seek advice on how best to contact HMRC and to get a reasonable, or even a reasoned, response. My problem (and my wife's too) started over 20 years ago - with Montpelier - and, like many I was new to contracting back then and followed some peers and some dodgy (crooked?) advice to be tax efficient.

We followed the same bad advice in subsequent years until it got to the point where the risk of what seemed ever more like a negative outcome just became too much, and we took steps to settle.

... and then it seems to have snowballed.

For some reason, our cases were being dealt with by different HMRC teams (same name but different locations) and they were giving us conflicting advice. The teams also seemed to be impossible to get hold of and over time they changed their names and email addresses as they moved around the Midlands and the North West - and we haven't heard from them for a number of years now.

Our communication seems to be limited to different debt management teams now, occasionally with some correspondence from the SA teams and, once, an intimidating visit from a reasonably dressed thug, who was trying to see over my shoulder into the house and was gesturing to my wife and son's cars to suggest he'd take them in lieu of the "DEBT".

We made a significant payment (c£70k) some years ago, thinking we'd end the pain, but that just triggered more and more demands - I think we'd paid the accelerated payments (APs) but then there were demands for surcharges, and follower penalties, and interest, and late payment fees, so the amount we still owe is around £100k. Out of desperation, and some fear that I'm getting to the age where I may not be working much longer, we started to make plans, to suck it up and start to pay off.

In the past year we've paid around another £30k but we have tried to argue that for some of the years they've assessed us for being with Montpelier, we'd actually retained and worked through our limited company because, although HMRC would accept that contract, another client would not - so for 3 of the 5 years they've invented a debt, we actually paid Corporation Tax and were not paid through Montpelier.

The conversations I've had in recent years, with DM and SA teams have all said they don't have access to any useful information as they are all siloed (and uninterested) so I was going to look for advice on whether to write to the HMRC DG to see if that would gain any traction across the void(s)?

Seeing this thread though - and why I'm not quite hijacking it - I see that two of the years we were mistakenly charged for are 2002 and 2003. I still need to resolve my other years of paying/ being charged for substantial Corporation Tax and Self Assessment Tax but will get onto my MP about the early years (Graham Brady)

Thank you guys for the help, reassurance and comfort you gave me in the past (I'm still here!!) and to those you continue to help now...

[s684]

For anyone in NTRT reading this who thinks writing to MPs is worth a shot...


HMRC misusing legislation retrospectively

HMRC have taken it upon themselves to apply a piece of legislation retrospectively.

The legislation in question is s684(7A)(b) ITEPA 2003.

They have been applying this to periods before ITEPA 2003 was even on the statute books.

For example, in 2019 they applied it to tax years 2001/2 and 2002/3 with a contractor scheme known as "Montpelier DTA".

I would be grateful if you could challenge HMRC about this and call them to account.

[s684]

They seem confident that they have a winning argument against s684 for all years. It just seems a bit of a missed opportunity not to also pursue this other angle, even though it has more limited benefit. I guess it's all or nothing as far as they're concerned.

They're probably too late to add a new argument to their appeal, even if they wanted to. HMRC would object, and the tribunal probably wouldn't allow it. That boat has probably already sailed.

In any case, the courts may not be the best place to argue this. They seem far too willing to side with HMRC. (Which is why I don't share NTRT's optimism about beating s684.)

Getting MPs to call HMRC to account is perhaps the best hope. Long shot? Sure but what does it cost to fire off a quick letter?

[stonehenge]

That's a real shame because HMRC appear to be on the back foot over this.

They seem confident that they have a winning argument against s684 for all years. It just seems a bit of a missed opportunity not to also pursue this other angle, even though it has more limited benefit. I guess it's all or nothing as far as they're concerned.

[s684]

According to an inside source...

NTRT aren't doing anything proactive to specifically challenge 2001/2 and 2002/3, even though many of their members are affected by this.

That seems very remiss to me.

That's a real shame because HMRC appear to be on the back foot over this. Just look at their evasiveness with the FOIs. If they were sure of their position, they'd have no trouble spinning responses.

[stonehenge]

According to an inside source...

NTRT aren't doing anything proactive to specifically challenge 2001/2 and 2002/3, even though many of their members are affected by this.

That seems very remiss to me.

[s684]

This is starting to gain a bit of traction now.

If you are affected by this, I would urge you to write to your MP and ask them to challenge HMRC. It only takes a couple of minutes to email them using writetothem.com

Don't just cut and paste this. Adapt it and put it in your own words.

Dear MP

I would like to bring a serious matter concerning HMRC to your attention. I believe they may have been misusing legislation.

In recent years, they have been employing a discretionary power, under s684(7A)(b) ITEPA 2003, to set aside the PAYE regulations with contractor schemes so that they can collect tax from the contractors.

However, astonishingly, it turns out that they have been applying this to periods before the ITEPA 2003 legislation was even on the statute books. In other words, retrospectively. For example, in 2019, they applied it to pre-ITEPA tax years 2001/2 and 2002/3 with a scheme known as "Montpelier DTA".

I would be grateful if you could challenge HMRC to justify what they have been doing.

I look forward to hearing from you in due course.

Yours sincerely,

[woody1]

As I said previously the fact they won't answer the question tells you everything you need to know.

Perhaps their lawyers have told them to go "no comment".

[eek]

As I said previously the fact they won't answer the question tells you everything you need to know.

There are enough historic FOI requests where HMRC go beyond the FOI's remit to provide an answer that the lack of an answer here, actually provides you with the answer they don't want to provide..

[woody1]

They don't seem to want to touch these FOIs with a bargepole.

https://www.whatdotheyknow.com/reque...tgoing-1482936
https://www.whatdotheyknow.com/reque...coming-2346267

Maybe MPs will have better luck getting to the bottom of what's been going on.

[s684]

This is a continuation of my earlier thread which has a problem with it (Reply produces an error).
https://forums.contractoruk.com/hmrc...-2002-3-3.html

I've heard from two people who've written to their MP about this. Hopefully other people, who are affected, have done likewise.

You've nothing to lose, and you can do it by email (Google "writetothem").