“The APNs have produced a lot of money,” said Hyde, “but once you’ve set that standard the Revenue’s masters expect them to produce that every year, and if you stop most avoidance schemes you’re not going to get money from them in future years. Therefore, you’ve got to find it somewhere else, and the Revenue is now pushing on points it hasn’t previously pushed on.”
If you have been following Finance Bill 2014, you certainly know that the “Retrospective Upfront Payments” legislation is the brainchild of Exchequer Secretary to the Treasury, David Gauke.
It is most interesting to note that when he was in the opposition, Mr. Gauke once said the following to the Parliament:
“It is not acceptable that the Government permit something that they consider unacceptable to exist for some years, and then seek to introduce retrospective legislation to address it. That is what we see here.
The comments from the professional bodies are universally critical. The Chartered Institute of Taxation described the retrospective nature as “extreme” and “unjustified”, the Law Society described it as “wrong in principle”, and the Institute of Chartered Accountants in England and Wales said that “it sends out a very damaging signal about the stability of the UK tax system”.
Rather than allowing the courts to interpret [the] law, they will rewrite it retrospectively so that it says what they wanted it to say in the first place. Such an approach gives individuals and businesses no reassurance that the law is what they think it is, as it is written down and what has been passed by Parliament.
The impression is that it is something that can be changed if not at a whim, at the discretion of the Government retrospectively“
– David Gauke, Public Bill Committee debate, May 2008
The above (which be can be referred to on the Parliament’s website – the entire tirade is worth a read…) refers to the vindictive legislation termed S.58 passed in the Finance Bill 2008, which retrospectively changed the tax law on the use of a DTA and backdated it to 1987 (21 years!!). The people who joined this scheme were contractors simply seeking some certainty in their lives when faced with the total uncertainty of IR35 (more information can be found at notoretrotax.org.uk)