LCAG - JR decision

[DealorNoDeal]

If you are litigating now, you need a reason why the loan charge will NOT apply.

If you are of the view it does, then settle.

We're not and we carry on.

I can imagine there may be technical arguments, specific to some schemes, which may have some legs eg. the loan wasn't made by a 3rd party.

But I can't see many appeals, against the LC, succeeding at tribunal when the intent of Parliament couldn't be clearer.

[webberg]

But I can't see many appeals, against the LC, succeeding at tribunal when the intent of Parliament couldn't be clearer.

We'll have to see.

Anti avoidance legislation always starts with an attempt to outlaw one or a few schemes but then HMRC and the draughtsman panic and try to make it apply to EVERY instance. This usually creates weaknesses and we believe that it has here as well.


The "purposive" test is that the legislation has to be applied as intended by Parliament, but with due credence to the words used.

We're well aware that many "defenders" of schemes have already thrown in the towel for a number of reasons. We're not ready to do that just yet. In fact we think we have a better case now than we did.

Time will tell if I have to regret those words or can roll into smug retirement having proven them correct.

I do know though that unless you try to win the argument, you will lose.

[DealorNoDeal]

Out of curiosity, how do you actually appeal against LC19?

Do you still have to file a 2018/19 SATR declaring the outstanding loans? If so, then what? Put nil for the tax, and include an explanatory note?

[lowpaidworker]

I can imagine there may be technical arguments, specific to some schemes, which may have some legs eg. the loan wasn't made by a 3rd party.

But I can't see many appeals, against the LC, succeeding at tribunal when the intent of Parliament couldn't be clearer.

I'm with this anove. Seems every JR reverts back parliamanet intended quote or comon sense says this money is payment for work.

I think post COVID19 HMRC will be given more power to collect taxes.

[BrilloPad]

I'm with this anove. Seems every JR reverts back parliamanet intended quote or comon sense says this money is payment for work.

I think post COVID19 HMRC will be given more power to collect taxes.

They already have all the power. What more can they get?

[DealorNoDeal]

I'm with this anove. Seems every JR reverts back parliamanet intended quote or comon sense says this money is payment for work.

Not just JRs. It's incredibly difficult to persuade a tax tribunal that scheme users aren't liable.

Advisors and counsel go to tribunal with what they genuinely believe to be decent arguments but the reality is often disappointment.

Sadly, I think this is going to start to sink in over the next year or so as more decisions are handed down.

[webberg]

Don't get confused between a JR - which is really testing whether a piece of legislation is legal and whether the chosen authority wielding it is competent - and a legal dispute over the tax analysis.

Winning a JR is difficult. Winning one in the tax arena where even EU law recognises the sovereign right of each nation to determine its own tax policy, is even more difficult.

You need to be very sure of your ground before spending money on a tax JR especially if yours follows a number of similar cases making similar points.

Testing how the law applies to a set of circumstances is for the Tribunals. This if you like is the nitty gritty of not what is intended but what actually happens. these can be easier to "win" although the FTT record shows a definite bias toward HMRC wins.

That may be because they have made a better case or it may be because HMRC is folding on cases that they may lose, before the FTT. (No taxpayer is going to go to FTT if HMRC has conceded prior to the hearing). Either way the impression that HMRC wants to achieve (i.e. we win xx% of cases) is established and the intimidation begins.

[lowpaidworker]

They already have all the power. What more can they get?

I mean they will be all the more aggressive and all the good work done during the SAM review will shortly be forgotten.

[lowpaidworker]

Don't get confused between a JR - which is really testing whether a piece of legislation is legal and whether the chosen authority wielding it is competent - and a legal dispute over the tax analysis.

Winning a JR is difficult. Winning one in the tax arena where even EU law recognises the sovereign right of each nation to determine its own tax policy, is even more difficult.

You need to be very sure of your ground before spending money on a tax JR especially if yours follows a number of similar cases making similar points.

Testing how the law applies to a set of circumstances is for the Tribunals. This if you like is the nitty gritty of not what is intended but what actually happens. these can be easier to "win" although the FTT record shows a definite bias toward HMRC wins.

That may be because they have made a better case or it may be because HMRC is folding on cases that they may lose, before the FTT. (No taxpayer is going to go to FTT if HMRC has conceded prior to the hearing). Either way the impression that HMRC wants to achieve (i.e. we win xx% of cases) is established and the intimidation begins.

Thanks for the explanation. Conceptually I understand. But from the uneducated in Tax Law it seems we are chucking good money at these JRs and keep losing. RVQC by all accounts got smashed in this case. He's supposed to one the best but he didnt even get close.

Seems to me only a technicality will win this like something being out of time or stale but that is not going to affect everyone but just just specfic people. The LC is never going to be defeated. Its law. Only the MPs who might decide it was a bit too aggressive can change it not a JR.

[DealorNoDeal]

RVQC by all accounts got smashed in this case. He's supposed to one the best but he didnt even get close.

Horses for courses. He's a tax barrister. If you're challenging the law (tax or otherwise) on human rights grounds then you should really use a public law barrister.