Why should my MP worry about retrospective taxation on avoiders?

[speling bee]

Did anybody else see the interview? I think it was Ian Davidson. He basically said that whilst the Rangers case was perfectly legal it was immoral.

So even when a Tax Tribunal says its legal these MPs still bang on the drum of moral high ground.

That's what we are up against !

Indeed. But the law was not changed retrospectively for them.

Lucozade and Brillo, what I don't get in all of this is:

You seem to say that it doesn't matter whether your tax arrangements were immoral, as long as they were legal.

Then, when retrospective legislation is introduced to correct this perceived moral outrage, you seem to object that the retrospective nature of this legislation is immoral, even if it is legal.

I am not, for once, trying to cause trouble. But why would my MP want to help you out when you present a moral argument, when your base position is that morality doesn't matter, just the law?

[BrilloPad]

...

Would you kindly delete your post as it removes the flow of the thread? And repost in general.

I will happily respond - you make some good points and I would like to answer them.

[speling bee]

Would you kindly delete your post as it removes the flow of the thread? And repost in general.

I will happily respond - you make some good points and I would like to answer them.

I see.

[TalkingCheese]

Lucozade and Brillo, what I don't get in all of this is:

You seem to say that it doesn't matter whether your tax arrangements were immoral, as long as they were legal.

Then, when retrospective legislation is introduced to correct this perceived moral outrage, you seem to object that the retrospective nature of this legislation is immoral, even if it is legal.

I am not, for once, trying to cause trouble. But why would my MP want to help you out when you present a moral argument, when your base position is that morality doesn't matter, just the law?

SB - the crux of our argument isnt about morality... that is part of the governments justification. It is a distraction. The crux is that the government have protocols to follow before introducing retro legislation. They didnt follow them. As well as that:
- There was 1 months warning that the law would be changed retrospectively, to the tune of 21 years
- There was less than 1 years notice that HMRC didnt accept the arrangement. Prior to that they had accepted claims with and without enquiry leading to the expectation that all was well, and this was with full disclosure for the 7 years the arrangement was used.

Mildly irritating to be given an unexpected bankrupting bill on that basis.

[speling bee]

SB - the crux of our argument isnt about morality... that is part of the governments justification. It is a distraction. The crux is that the government have protocols to follow before introducing retro legislation. They didnt follow them. As well as that:
- There was 1 months warning that the law would be changed retrospectively, to the tune of 21 years
- There was less than 1 years notice that HMRC didnt accept the arrangement. Prior to that they had accepted claims with and without enquiry leading to the expectation that all was well, and this was with full disclosure for the 7 years the arrangement was used.

Mildly irritating to be given an unexpected bankrupting bill on that basis.

OK. But Parliament passes legislation, even if government introduces it, and Parliament is sovereign in this regard.

Has government or Parliament behaved illegally - I hadn't picke up on the protocols to follow? If so, I am immediately somewhat more sympathetic.

[lucozade]

OK. But Parliament passes legislation, even if government introduces it, and Parliament is sovereign in this regard.

Has government or Parliament behaved illegally - I hadn't picke up on the protocols to follow? If so, I am immediately somewhat more sympathetic.

Some would say that the retrospective legislation was introduced by illegal means, i.e. by misleading parliament. Protocols were not followed and as others have said no warnings were given. In fact HMRC couldn't give warnings because it was a perfectly legal scheme to use. Instead of giving some test cases time of day at a Tax Tribunal, which was initially promised, HMRC went for retrospective law changes. They knew they wouldn't win!

It's easier to defend HMRC when your not sitting with a £120,000 tax bill for working within the law. But a bitter pill to swallow surely if you can see that 3000 families are potentially going to be ruined whilst Amazon, Google, Facebook and Starbucks can continue to operate within their perfectly legal tax schemes without fear.

Big companies don't lie awake at night wondering how they are ever going to pay the big bill. I on the other hand do and the worry and stress this has caused me since 2008 has only made me stronger to fight it to the bitter end.

Retrospective taxation is unjust and has no place in a democratic society.

Put it another way - what's next for HMRC? Will it be you next or do you think you operate within the law? Do you think it's acceptable to change the speed limit on a road from 30 to 20mph and then, without warning, retrospectively fine all road users for going over 20mph?

[BrilloPad]

Sorry about that

[max]

Mildly irritating to be given an unexpected bankrupting bill on that basis.

It was also mildly irritating over the years trying to get small(inflation) increments in daily rates, only to be turned down due to another contractor happy not to raise their rate...due to only paying 4% tax.

It was one thing to have jobs moving offshore, but to have "brothers in arms" undercutting rates!

[speling bee]

Some would say that the retrospective legislation was introduced by illegal means, i.e. by misleading parliament. Protocols were not followed and as others have said no warnings were given. In fact HMRC couldn't give warnings because it was a perfectly legal scheme to use. Instead of giving some test cases time of day at a Tax Tribunal, which was initially promised, HMRC went for retrospective law changes. They knew they wouldn't win!

It's easier to defend HMRC when your not sitting with a £120,000 tax bill for working within the law. But a bitter pill to swallow surely if you can see that 3000 families are potentially going to be ruined whilst Amazon, Google, Facebook and Starbucks can continue to operate within their perfectly legal tax schemes without fear.

Big companies don't lie awake at night wondering how they are ever going to pay the big bill. I on the other hand do and the worry and stress this has caused me since 2008 has only made me stronger to fight it to the bitter end.

Retrospective taxation is unjust and has no place in a democratic society.

Put it another way - what's next for HMRC? Will it be you next or do you think you operate within the law? Do you think it's acceptable to change the speed limit on a road from 30 to 20mph and then, without warning, retrospectively fine all road users for going over 20mph?

I think the crux of your argument is that retrospective taxation is unjust. I am brought back into this by claims that A.N. Other poster paid 3% tax. Which some might think to be unjust. But 'unjust' is not much different from 'immoral' in the sense that you're using it.

So I am interested in whether the retrospective legislation is legal. You seem to be suggesting that this particular piece of legislation may be illegal, and if that is the case, then I am considerably more sympathetic (although I'm not sure how legislation can be illegal in a country without a constitution - something to do wuth human rights at a European level?), as opposed to if it hust a view that such legislation is immoral or unjust.

The general queston on retrospective legislation is interesting. I wouldn't favour retrospective legislation on speed limits. I don't favour all legisltation so I don't favour all retrospective legislation. But that doens't mean that retrospective legislation is always wrong, and I can't make my mind up on this one.

[vetran]

Retrospective legislation is only valid where it was obvious you were breaking the law and are exploiting a loophole not Government advice. They weren't they were obeying, the government has changed their mind.

If the current government advice is "X is allowed" and you do X then despite morality in a civilised country then you can expect that during that period you are obeying the law. Decisions made based on that law are valid and arranging your affairs to take advantage of that should be final.

If the Advice changes to "Only Y is allowed" and you continue to do X then its reasonable so suppose you are not obeying the law. If you do Y going forward you X days are perfectly valid.

If they change the law and say "you know when we said X was OK we were lying and you have to behave as if we meant Y" then they are now on a very sticky wicket. I look forward to them losing.


For example if they now prosecuted an off licence who sold me a bottle of whisky when I was 18 (which was nearly 30 years ago), because the off licence can only sell me whisky if I'm 21 nowadays it would be seen as ridiculous. The damages or morality of selling alcohol are irrelevant.

Just because its only money and the resulting victims can't afford expensive lawyers doesn't mean we can ignore the law.

I imagine once they sort out transfer pricing and royalty abuse if they try to apply it retrospectively they will be given short shrift. If however they find an existing piece of law and apply it retrospectively they MAY get away with it.