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Tribunal and beyond

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    #41
    Originally posted by NotSoCompliant View Post
    I understand the risks of speculating or making assumptions but do you have a general view of how HMRC may attempt to recover pre December 2010 closed years?
    A new law applied retrospecively? Actually, HMRC would never do that.

    Since HMRC seem to regularly ignore the rule of law, I think they will just carry on as before.

    Comment


      #42
      Originally posted by webberg View Post
      The danger is that there are some schemes both pre and post 2010 that arguably should have been disclosed for DOTAS but were not. A case could be brought to make them disclosable - as we saw with the Hyrax scheme. If a scheme is "disclosable" then an APN can be issued - if other conditions are met - even though there was no original DOTAS disclosure.

      As was said above however, you are speculating and if I may say so, using inaccurate assumptions and therefore spiraling towards the worst possible answer based on those incorrect assumptions.

      I suggest a wait and see policy will bring you some peace.
      What are the DOTAS rules when it comes to employER schemes - if a scheme is disclosed on a company's end of year accounts, does anything need to be declared on an employEE's self assessment?

      Or will HMRC argue that they've always been clear that DOTAS always needed to be declared on a SATR?

      Comment


        #43
        Originally posted by BrilloPad View Post
        A new law applied retrospecively? Actually, HMRC would never do that.

        Since HMRC seem to regularly ignore the rule of law, I think they will just carry on as before.
        I think that there are ways in which the present rules could be read that would allow some years to be opened up. I'm not going to speculate on these in a public forum.

        I also think that some of the practices of HMRC as highlighted in the report (mainly unsaid but nonetheless present) have created opportunities for some of the possible routes to action to be challenged. This will require a process that focuses on the procedure and the law and the administrative role of HMRC as a body.

        It is important to bear in mind that all open enquiries will now be receiving HMRC attention as they no longer have their broad spectrum weapon.

        Many will see this inevitable action to be a resumption of hostilities that are being conducted on a personal level between taxpayers and the HMRC officer who is named at the end of the letter.

        It's very much NOT the case.

        If you approach the inevitable resumption of enquiries as evidence of some form of personal vendetta, you risk losing balance and objectivity in dealing with your situation. That will lead to a waste of energy on minor irritants and the expenditure of emotional (and financial) resources.

        This is not a personal vendetta. I can honestly say that the instances I have encountered in my 40+ year career in tax where an HMRC officer has acted outside their authority, I can count on one hand. There is no conspiracy here and acting as though there is will drain you of the tools you need to achieve the best result you can.
        Best Forum Adviser & Forum Personality of the Year 2018.

        (No, me neither).

        Comment


          #44
          Originally posted by RickG View Post
          What are the DOTAS rules when it comes to employER schemes - if a scheme is disclosed on a company's end of year accounts, does anything need to be declared on an employEE's self assessment?

          Or will HMRC argue that they've always been clear that DOTAS always needed to be declared on a SATR?
          I think (with respect) you misunderstand DOTAS.

          A scheme that seeks a tax advantage and one that meets the various hallmarks detailed in the legislation, is required to be disclosed.

          The rules say that the disclosure has to be made by various parties, in a priority.

          This starts with the entity promoting or selling the scheme. (Making it available).

          If they fail to disclose then the obligation starts to go through other parties, such as advisers, (excl QC's) intermediary sellers, and eventually users.

          Once the disclosure is made, all users should be advised of the reference number and are them obliged to show this number (SRN) on their tax return.
          Best Forum Adviser & Forum Personality of the Year 2018.

          (No, me neither).

          Comment


            #45
            Originally posted by webberg View Post
            I think that there are ways in which the present rules could be read that would allow some years to be opened up. I'm not going to speculate on these in a public forum.

            I also think that some of the practices of HMRC as highlighted in the report (mainly unsaid but nonetheless present) have created opportunities for some of the possible routes to action to be challenged. This will require a process that focuses on the procedure and the law and the administrative role of HMRC as a body.

            It is important to bear in mind that all open enquiries will now be receiving HMRC attention as they no longer have their broad spectrum weapon.

            Many will see this inevitable action to be a resumption of hostilities that are being conducted on a personal level between taxpayers and the HMRC officer who is named at the end of the letter.

            It's very much NOT the case.

            If you approach the inevitable resumption of enquiries as evidence of some form of personal vendetta, you risk losing balance and objectivity in dealing with your situation. That will lead to a waste of energy on minor irritants and the expenditure of emotional (and financial) resources.

            This is not a personal vendetta. I can honestly say that the instances I have encountered in my 40+ year career in tax where an HMRC officer has acted outside their authority, I can count on one hand. There is no conspiracy here and acting as though there is will drain you of the tools you need to achieve the best result you can.
            Thank you for your thoughts Graham. 2 out of my 5 years in schemes were for pre Dec 2010 closed years which were closed. I settled voluntarily these closed years due to the impending LC as I couldn’t bear going through the stress and uncertainty and I wanted to move on with my life. My reading on the LC review is that I’ll get a refund of my voluntary restitution (once recommendations are passed in law) but I was almost resigned to thinking that HMRC would just find another way to recover the money for the closed years so it would be a matter of passing in one hand and out the other. However, reading more about it, it would seem foolish to just accept this fate and my approach is now to expect the worst (ie refund money gets requested to be paid back) but I will definitely seek your firms advice first (my colleague next to me at work recommends it) if and when that time comes, before I just hand any further money over.

            Comment


              #46
              Originally posted by webberg View Post
              I think that there are ways in which the present rules could be read that would allow some years to be opened up. I'm not going to speculate on these in a public forum.

              I also think that some of the practices of HMRC as highlighted in the report (mainly unsaid but nonetheless present) have created opportunities for some of the possible routes to action to be challenged. This will require a process that focuses on the procedure and the law and the administrative role of HMRC as a body.

              It is important to bear in mind that all open enquiries will now be receiving HMRC attention as they no longer have their broad spectrum weapon.

              Many will see this inevitable action to be a resumption of hostilities that are being conducted on a personal level between taxpayers and the HMRC officer who is named at the end of the letter.

              It's very much NOT the case.

              If you approach the inevitable resumption of enquiries as evidence of some form of personal vendetta, you risk losing balance and objectivity in dealing with your situation. That will lead to a waste of energy on minor irritants and the expenditure of emotional (and financial) resources.

              This is not a personal vendetta. I can honestly say that the instances I have encountered in my 40+ year career in tax where an HMRC officer has acted outside their authority, I can count on one hand. There is no conspiracy here and acting as though there is will drain you of the tools you need to achieve the best result you can.
              Agreed it is not a personal vendetta. They are after all of us.

              I consider retrospectionas acting outside their authority.

              Comment


                #47
                Originally posted by webberg View Post
                I think (with respect) you misunderstand DOTAS.
                No offence taken on this. I don't purport to be an expert at any level and appreciate your advice.

                Once the disclosure is made, all users should be advised of the reference number and are them obliged to show this number (SRN) on their tax return.
                For employER schemes, though - isn't the employER responsible for administering and paying any tax which may be due, and therefore the SRN would not be declared on the employEE's SATR? Or is that completely wrong?

                And if it is correct - can you see HMRC trying to argue the opposite and therefore using non-disclosure as a way to extend the time limits for opening up an enquiry?

                Comment


                  #48
                  Originally posted by BrilloPad View Post
                  I consider retrospection as acting outside their authority.
                  For the record, I do not.

                  It has been clear since at least the time of the statement from Dawn Primarollo - and arguably long before then - that retrospection was a weapon in the Parliamentary toolbox and that it would be used.

                  Treasury Select Committee reviews of Finance Bills subsequently have acknowledged the use of retrospection whilst arguing that it should be used in "exceptional" circumstances. Unfortunately they have not defined "exceptional".

                  Accepting that HMRC will be pushing the boundary of "exceptional" to cover their multitude of incompetencies and errors, we should not be surprised to see more examples.

                  However the game has changed.

                  The last 18 months in particular has seen case after case in Tribunal and beyond, question the processes, procedures and legality of HMRC's claimed actions and many of them have found HMRC lacking. I think therefore that the scope for bringing successful JR action has widened and that the prospect of success has increased.

                  It is also a fact that MPs have had a shot across their bows in terms of accepting, without question, Finance Bills. They now know that the value of the numbers supplied by HMRC has been reduced and that the agency is not averse to gilding the numbers to support whatever case they are making. It is up to all of us to make sure that the MPs on the Finance Committee are given the heads up when this inevitably happens again.

                  Make no mistake that the hurdles remain high and the HMRC will resist all attempts to have their work examined. I do however think that the loan charge review is a seminal moment in time.

                  Also though, make no mistake that retrospection remains a constitutional weapon that will be invoked by Government, not just in tax matters but as we have already seen in issues such as sentencing and trade tariffs.

                  Retrospection is always done on the authority of Parliament. No Civil Service department can unilaterally make retrospective law. There are tools and counters to recommendations from the Civil Service for retrospection and checks and balances. It was those checks and balances that failed and saw the loan charge introduced. We have to make sure that they are restored.

                  I do not however think for a moment that HMRC's authority extends to the making of retrospective law without Parliamentary approval. It may be that Parliament exceeds its limits of course, but that is not HMRC.

                  Continue the fight, but be aware that you will never "out-resource" Government/HMRC and therefore be selective in picking your ground.
                  Best Forum Adviser & Forum Personality of the Year 2018.

                  (No, me neither).

                  Comment


                    #49
                    Originally posted by RickG View Post

                    For employER schemes, though - isn't the employER responsible for administering and paying any tax which may be due, and therefore the SRN would not be declared on the employEE's SATR? Or is that completely wrong?

                    And if it is correct - can you see HMRC trying to argue the opposite and therefore using non-disclosure as a way to extend the time limits for opening up an enquiry?
                    Answering my own question here, but seems FA 2015 introduced legislation to ensure employEEs were given SRNs by their employERS and their use of a dotas scheme declared explicitly to hmrc.

                    I'd imagine they'd still argue prior to 2015 this should have been done explicitly, but the introduction of the new legislation makes that a more difficult case to argue.
                    Last edited by RickG; 2 January 2020, 14:21.

                    Comment


                      #50
                      Originally posted by RickG View Post
                      Answering my own question here, but seems FA 2015 introduced legislation to ensure employEEs were given SRNs by their employERS and their use of a dotas scheme declared explicitly to hmrc.

                      I'd imagine they'd still argue prior to 2015 this should have been done explicitly, but the introduction of the new legislation makes that a more difficult case to argue.
                      The disclosure obligations that we refer to as DOTAS do NOT use the phrases "employer" or "employee". They refer to arrangers, promoters and users.

                      Any USER given an SRN MUST put that on their tax return.

                      If they do not, that is an offence and will count as non disclosure.

                      If the arranger/promoter does not apply for a DOTAS reference but should have done so, that is an offence that they commit. It does NOT however exempt users from disclosing UNLESS they had sought confirmation of disclosure from a party higher up the chain and had received a report that disclosure had been made (even if that report was inaccurate).

                      I'm afraid that the legislation in 2015 is likely to be of limited value (in my opinion).
                      Best Forum Adviser & Forum Personality of the Year 2018.

                      (No, me neither).

                      Comment

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