The Chancellor, the avoidance and the hypocrisy.pdf - Google Drive
DB Group Services (UK) Ltd V HMRC
(DB = Deutsche Bank, which at the time of the scheme use employed Mr Sajid Javid, the current
Chancellor of the Exchequer)
The Supreme Court found in favour of HMRC in that the scheme was set up purely for the benefit of
avoiding Tax.
The scheme was devised to work as follows:
ITEPA2003, pt7, Ch2 provides a tax exception (s425(2)) with respect to ‘restricted securities’
awarded to employees.
Restricted securities are explained at s423(2) which broadly states that they are shares which are
subject to provision for forfeiture if a contingency occurs. Instead of paying bonuses (which of
course would have been taxable) directly to its employees DB purchased redeemable shares in
offshore companies set up purely for this exemption.
To meet the legislation (the required contingency) DB stated that the shares would need to be
forfeited if the employee was either dismissed for gross misconduct or voluntarily resigned....within
the next 6 weeks. Clearly these are contingencies highly unlikely to occur – and indeed within the
power of the employee.
Once these, purposely meant to be unlikely, actions had not occurred the shares were redeemable
for cash.
The Supreme Court found that there are a number of purposes for the legislation such as the
promotion of employee share ownership but stated that it was unlikely Parliament had intended it
to be used to avoid tax payments. Therefore, is was decided that the bonuses should have been
taxed as shares on the date of their acquisition.
In this Video the chancellor states he has never benefited from this scheme. Well that’s probably
because nobody did eventually as explained above, given that HMRC won the argument.
The chancellor seems less forthcoming on the question of whether he entered the scheme...or to be
precise, what should be asked is “Dear Mr Chancellor, have you EVER owned any restricted
securities in an offshore company?” If so, please do list them.
Now if the answer to that question evidences that the Chancellor has indeed participated in a,
proven to fail, tax avoidance scheme then does that make his position untenable?
Considering his predecessor, Mr Hammond and also the current Chair of the Treasury Select
Committee (TSC) Mel Stride have previously stated that people affected by the Loan Charge
(schemes primarily much less convoluted and indeed not proven to fail by any court to date) have
committed an illegal act by use of such schemes, surely the answer must be a re-sounding ‘Yes’!
Indeed just last month Mr Javid wrote to a person affected by the Loan Charge and stated “The Loan
Charge was designed to tackle contrived tax avoidance schemes”....”The Government is clear that
such schemes do not work”
So, Mr Javid seems to be telling us that the Government are clear schemes which have NOT been to
court do not work (and they are therefore happy to retrospectively attack normal, low-earning
members of society causing untold damage to lives and forcing people to suicide as shown here). In
stark contrast to this, the Government are also quite content to having a Chancellor - who has
evidentially utilized a scheme that has been PROVEN not to work by the Supreme Court - running the
entire Finances of the UK.
Just this morning I have woken to find another handful of clients and people affected by the Loan
Charge, have sent me desperately sad texts about how their lives have been ruined:
Ruined by a retrospective tax despite them never having been found guilty of anything or indeed
being given a right to stand in a court.
Lives have already been and continue to be destroyed despite these people having not done
anything wrong in the eyes of any court, nor have HMRC been able to prove that this retrospective
tax was or indeed is due.
Mr Javid on the other hand, if he did own those shares, is different because his scheme has proven
to fail by HMRC and even the Supreme Court. Of course Mr Javid is, in his role and with his working
background, part of the establishment, a part of the entitled few that can ruin the lives for the very
many.
Power Corrupts, Absolute power corrupts absolutely.
Phil Manley
*If anyone wishes to look up the above named legislation it is, as mentioned, in pt7 ITEPA2003.
Which is where you will also find the loan charge legislation as it happens
================================================== ===
Whatever you think of him (and i suggest you keep to yourself as he will sue you for any libel) the man has some real conviction and its way better than mps writing pointless letters.
DB Group Services (UK) Ltd V HMRC
(DB = Deutsche Bank, which at the time of the scheme use employed Mr Sajid Javid, the current
Chancellor of the Exchequer)
The Supreme Court found in favour of HMRC in that the scheme was set up purely for the benefit of
avoiding Tax.
The scheme was devised to work as follows:
ITEPA2003, pt7, Ch2 provides a tax exception (s425(2)) with respect to ‘restricted securities’
awarded to employees.
Restricted securities are explained at s423(2) which broadly states that they are shares which are
subject to provision for forfeiture if a contingency occurs. Instead of paying bonuses (which of
course would have been taxable) directly to its employees DB purchased redeemable shares in
offshore companies set up purely for this exemption.
To meet the legislation (the required contingency) DB stated that the shares would need to be
forfeited if the employee was either dismissed for gross misconduct or voluntarily resigned....within
the next 6 weeks. Clearly these are contingencies highly unlikely to occur – and indeed within the
power of the employee.
Once these, purposely meant to be unlikely, actions had not occurred the shares were redeemable
for cash.
The Supreme Court found that there are a number of purposes for the legislation such as the
promotion of employee share ownership but stated that it was unlikely Parliament had intended it
to be used to avoid tax payments. Therefore, is was decided that the bonuses should have been
taxed as shares on the date of their acquisition.
In this Video the chancellor states he has never benefited from this scheme. Well that’s probably
because nobody did eventually as explained above, given that HMRC won the argument.
The chancellor seems less forthcoming on the question of whether he entered the scheme...or to be
precise, what should be asked is “Dear Mr Chancellor, have you EVER owned any restricted
securities in an offshore company?” If so, please do list them.
Now if the answer to that question evidences that the Chancellor has indeed participated in a,
proven to fail, tax avoidance scheme then does that make his position untenable?
Considering his predecessor, Mr Hammond and also the current Chair of the Treasury Select
Committee (TSC) Mel Stride have previously stated that people affected by the Loan Charge
(schemes primarily much less convoluted and indeed not proven to fail by any court to date) have
committed an illegal act by use of such schemes, surely the answer must be a re-sounding ‘Yes’!
Indeed just last month Mr Javid wrote to a person affected by the Loan Charge and stated “The Loan
Charge was designed to tackle contrived tax avoidance schemes”....”The Government is clear that
such schemes do not work”
So, Mr Javid seems to be telling us that the Government are clear schemes which have NOT been to
court do not work (and they are therefore happy to retrospectively attack normal, low-earning
members of society causing untold damage to lives and forcing people to suicide as shown here). In
stark contrast to this, the Government are also quite content to having a Chancellor - who has
evidentially utilized a scheme that has been PROVEN not to work by the Supreme Court - running the
entire Finances of the UK.
Just this morning I have woken to find another handful of clients and people affected by the Loan
Charge, have sent me desperately sad texts about how their lives have been ruined:
Ruined by a retrospective tax despite them never having been found guilty of anything or indeed
being given a right to stand in a court.
Lives have already been and continue to be destroyed despite these people having not done
anything wrong in the eyes of any court, nor have HMRC been able to prove that this retrospective
tax was or indeed is due.
Mr Javid on the other hand, if he did own those shares, is different because his scheme has proven
to fail by HMRC and even the Supreme Court. Of course Mr Javid is, in his role and with his working
background, part of the establishment, a part of the entitled few that can ruin the lives for the very
many.
Power Corrupts, Absolute power corrupts absolutely.
Phil Manley
*If anyone wishes to look up the above named legislation it is, as mentioned, in pt7 ITEPA2003.
Which is where you will also find the loan charge legislation as it happens
================================================== ===
Whatever you think of him (and i suggest you keep to yourself as he will sue you for any libel) the man has some real conviction and its way better than mps writing pointless letters.
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