BN66 - Court of Appeal and beyond

[Fireship]

They can make retrospective changes to the law. And they can do so under A1P1, but BN66 is not a change according to how it was pushed through Parliament yet it must be. It clarifies incorrectly, retrospection. It claimed "as Parliament had always intended". Yet what Parliament specifically intended as per the IR Board evidence was also not to tax anyone with retrospection.

Hansard commentary states that 1987 was the signal that defeats our claim to legitimate expectation. But if so, then we were put on notice of the type of retrospection to expect or more accurately, the type NOT to expect.

Yet the A1P1 argument in the courts seems to focus on whether BN66 is fair and proportionate. It would appear that MP are agahst that the CoA ruled that Padmore is retrospective. I agree. For it it is proved is was not then the whole clarification angle, reference to Padmore being retrospective to allow BN66 retrospection and the "what Parliament had always intended" is on very dodgy ground.

Yep, got that but is it not the case that only clarifications can be fully retrospective/retroactive? As I understand it any changes to legislation that would conflict with actions that occurred in the past are prohibited by law (both UK and EU) unless enacted in such a way as to specifically exclude actions between the date of change and the retrospective date from which the change is deemed to have been effective from? i.e. are only effective for events that have yet to happen!

From what I’ve read here the courts have already said that this was an amendment which means it wasn’t a clarification which in turn means it isn’t legal in its current form regardless of how it was presented!!

Just my 2c worth but the confirmation that this was not a clarification could well offer us an option that wasn't there previously.....

[RingStinger]

This lovely little item was brought up on the first day of the JR and Parker really seemed to get the point. It may well be one of the 'gotcha's' that gets a more sensible scrutiny at the SC.

By the next day however Parker had turned 180 and swallowed all the 'Fairness' arguments that Hector's brief was spouting.

I've been looking back at the on the spot reports from Round 1 of the JR. Starting at the 1 below. I agree, is our brief pushing this hard enough...

http://forums.contractoruk.com/accou...ml#post1049553

[IH8GordonB]

I agree. Definitely NOT being taxed as inside IR35. I was a self-employed IT consultant on MP's contract at the time. I believe in the past there was an idea bandied around by one of AJ cronies that if we DID fall under IR35 and declare ourselves such (despite the MP contractual terms), then we wouldn't be liable for the tax - the 'intermediary' would.. whoever in law that would have been, given that we didn't operate through a Ltd. Don't go there.

This is correct, I can clearly see from the tax demand I received following the closure notice that they have simply taxed the trust income as any other taxable income. This does not affect our status as self employed at the time and there is no extra NI due.

As for the current state of affairs, I for one never thought the JR or CoA would find in our favour, put simply they are too junior and standing up to parliament is a job for the SC.

So why did the CoA take so long over the judgement, maybe because they wanted to come down in our favour but felt they couldn't, so had to agree a wording in HMRC's favour which would clearly leave the door open for an appeal to the SC.

I want to see this through to the end and don't want a deal now, but that said I have the alledged tax debt covered by a CTD so it is just a waiting game. I still feel optomistic that the SC may yet bear fruit, they have stood up to parliament before, so why not now?

However, I understand that others are not so fortunate and that the interest keeps mounting. This must be very distressing, I can see where the anger is coming from and the desire from some for a settlement. But I can't help feeling that HMRC won't be looking for a deal especially not with MP, although of course Hector may be open to individual negotiation based on personal circumstances. I can't see that individuals attempting a settlement would do any harm to the rest of us. But I'm not sure that MP would be best placed to conduct personal negotiations given they are in the midst of legal action, lets face it, you are more likely to get a listening ear from Hector if you are distancing yourself from MP (ok, I know Hector doesn't have a listening ear).

At the end of the day we all have to do what is right for ourselves and our families, I for one am just glad that MP are keeping their promise of going to the highest court in the land and haven't deserted us.

[Tynos]

I am not going to defend everything MP have done. Some of their practices have been sharp to say the least, especially on the sales side.

Once the scheme was under investigation in mid-2003, they should have told anyone new who joined.

Other promoters like Steed and deGraaf didn't even start their schemes until after it was being investigated. Did they tell anyone? Nope. What about all the property developers, were they told? Nope.

It's the same with all the EBT/Loan schemes. HMRC started investigating these years ago. Did any promoters tell prospective clients? Of course not.

This practice of shall we say being enconomical with the truth is widespread in the industry.

I also think MP should not have been so quick to recall the 4% loans as soon as the 12-month enquiry deadline had passed. And, arguably they should have refunded this when discovery notices were issued.

On the other hand, unlike Consulting Overseas, Norla etc, they didn't shut up shop at the first sign of trouble.

So far, they have honoured their commitment to defend the scheme up to the House of Lords (now Supreme Court).

It is not just HMRC who are guilty of retrospective rewriting of history.

Some people on this forum are totally disingenuous - "if only I'd been told this or that at the time, I wouldn't have joined".

How much due diligence did people really do? It was an Isle of Man offshore tax avoidance scheme for god sake. What did you think, you were joining a pension scheme covered by the FSA?

Some people are now trying to claim that they were led to believe it was 100% cast-iron guaranteed. Bollocks!

MP made it absolutely clear that, if the scheme was challenged, they would defend it up to the HoL. That was the only guarantee you were given. If you chose to believe that this meant it was 100% assured, then that was pure wishful thinking.

Should they have expected retrospective legislation? Maybe.

Should they have kept the numbers low? Probably but then others who jumped on the bandwagon, like Steed and deGraaf, would have simply filled the gap. Were they greedy? Sure but coming from us that would be like the pot calling the kettle black.

Yes, MP have been crap at communicating. Yes, they've been a bit economical with the truth at times.

But we are where we are.

If some people want to go off and sue MP or try and cut a deal with HMRC, then fine. I no longer have the energy to argue why I feel this is folly.

To my mind the best bargaining chip we may have is if we all stick together. But if that's not going to happen, so be it.

I'm with you on this too DR. Let's support M onwards and upwards to the SC.

[sjw]

This is correct, I can clearly see from the tax demand I received following the closure notice that they have simply taxed the trust income as any other taxable income. This does not affect our status as self employed at the time and there is no extra NI due.

.

Then I'm happy to stand corrected - pity that nobody at Montpelier could be arsed to advise despite being asked twice.

[SantaClaus]

As an aside - more corruption in our legal system....

I bet Cameron and Murdoch get off scott-free!

Cameron to give evidence under oath to phone-hacking inquiry | Politics

Several members of the Leveson inquiry team have disclosed that they have had glancing contact with Rupert Murdoch's media empire.

Lord Justice Leveson Inquiry chief

Attended two parties at the home of Mr Murdoch's son-in-law, PR man Matthew Freud, after he offered unpaid advice to the Sentencing Council which the judge chaired.

Lord Currie Former Ofcom chairman

Met Mr Murdoch at a News International party "some years ago" and chatted for about one minute. Met James Murdoch several times while executive chairman of Ofcom.

Shami Chakrabarti Director of Liberty

Husband Martyn Hopper is a partner with law firm Herbert Smith LLP, partners of which have acted for BSkyB.

George Jones Political journalist
Says his services as political editor of the Telegraph were "dispensed with" by editor Will Lewis

[swede]

This lovely little item was brought up on the first day of the JR and Parker really seemed to get the point. It may well be one of the 'gotcha's' that gets a more sensible scrutiny at the SC.

By the next day however Parker had turned 180 and swallowed all the 'Fairness' arguments that Hector's brief was spouting.

if i knew i the only court that could do anything about my case was the SC, presumably I would still need to follow process and go through the lower courts to get there. why would i waste my decent arguments on lower courts? just a niave thought.

[screwthis]

Then I'm happy to stand corrected - pity that nobody at Montpelier could be arsed to advise despite being asked twice.

Also happy about this.

Not sure why but I assumed NI was being piled on.

[DonkeyRhubarb]

Yep, got that but is it not the case that only clarifications can be fully retrospective/retroactive? As I understand it any changes to legislation that would conflict with actions that occurred in the past are prohibited by law (both UK and EU) unless enacted in such a way as to specifically exclude actions between the date of change and the retrospective date from which the change is deemed to have been effective from? i.e. are only effective for events that have yet to happen!

From what I’ve read here the courts have already said that this was an amendment which means it wasn’t a clarification which in turn means it isn’t legal in its current form regardless of how it was presented!!

Just my 2c worth but the confirmation that this was not a clarification could well offer us an option that wasn't there previously.....

What you're talking about (prohibition) only applies to criminal law, not civil law, and sadly certainly not tax.

Retrospective tax is allowed but it is not without limits. The trouble is the limits are not defined. States are given a wide margin of appreciation in this area.

If the Court of Appeal is right then wide margin of appreciation = pretty much anything goes, especially if it involves tax avoidance.

[DonkeyRhubarb]

National Insurance

I feel this needs clarifying. Please correct me if I've got this wrong.

We are being hit with extra National Insurance - Class 4 NIC. But this is because the trust income is now being treated as self-employed income and subject to tax & nic.

We are not being hit for Employers NIC, which would be the case if you were Ltd and failed IR35.