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View Full Version : Will the decision of the JR with Ingenious help us?



philinlondon
29th May 2015, 09:30
Hi all,

I just found his article written less than two weeks ago (What HMRC (http://www.lawinsport.com/articles/item/what-hmrc-s-accelerated-payment-notices-mean-for-athletes-tax-liabilities))

If I understood correctly, Ingenious seems to be challenging on the grounds of the human rights act with APN, let say they succeed in the high court, does that help us in anyway? It sounds too easy to assume all APN are effectively "illegal" or an automatic injunction is in place as I assume HMRC will go to a higher tier court.

webberg
29th May 2015, 11:20
Hi all,

I just found his article written less than two weeks ago (What HMRC (http://www.lawinsport.com/articles/item/what-hmrc-s-accelerated-payment-notices-mean-for-athletes-tax-liabilities))

If I understood correctly, Ingenious seems to be challenging on the grounds of the human rights act with APN, let say they succeed in the high court, does that help us in anyway? It sounds too easy to assume all APN are effectively "illegal" or an automatic injunction is in place as I assume HMRC will go to a higher tier court.

The Ingenious hearing (now I think in July) will be based on a fundamental freedoms point, i.e. when you entered a scheme the rule was that the Government could challenge it but not tax not paid to them because that was how the legal system worked. By changing the law for APN, Government has denied the citizen the fundamental right to object to having assets removed from them without appeal.

There are perhaps secondary arguments around whether HMRC is the correct body to operate the APN regime, whether they have followed the correct procedure etc.

My concern - and it is MY OPINION as a non lawyer - is that the "denial of appeal rights" derives from European Law. This is the Human Rights Act stuff and that particular act is relatively silent on tax matters. This is because (I think) tax is one of those matters reserved for individual states within the EU and not subject to overarching EU law except in areas like competition.

Again, MY OPINION is that a UK Court will look at whether there are UK constitutional barriers to applying APN. Given that there is clear legal precedent for retrospective tax law and arguably the APN regime is not retrospective law (effect yes, law no) I fear a swift negative answer.

(I may be wrong, I hope I am, but if so, my guess is we get amending rules very fast, perhaps the budget due in a few weeks).

In any event, the losing side will likely appeal and that may seek to involve European Courts. Running the full board of Courts could take a substantial time, perhaps 18 months even on a fast track.

The best information available at the moment says that HMRC has an injunction against collecting tax from those named in the JR challenge where hardship might be involved.

That is a long way from a blanket ban on collecting the APNs.

Anecdotally I've not heard of HMRC seeking to collect an APN that is subject to a JR but then again I suspect I don't act for any client in that position because I'm not a believer that a JR is value for money and therefore don't recommend it.

There is HMRC written advice that they consider an unpaid APN, even if subject to JR/injunction, will attract penalty from the original due date. That strikes me as potentially more unfair than the APN itself. that is however a potential separate legal challenge.

So, if Ingenious win, does it help? Yes (probably).

Would HMRC appeal? Yes (perhaps with a change of law as well).