- “No man in this country is under the smallest obligation, moral or other so, to arrange his legal relations to his business or to his property as to enable the Inland Revenue to put the largest possible shovel into his stores.” -Lord Clyde
- As clients of tax efficient schemes, we are members of the taxpaying public and involved in no moral or ethical wrongdoing.
- We have behaved in an open and transparent fashion, in full compliance with HMRC’s own guidance, using registered schemes and making Self-assessment
returns with all required details published. We are now being victimized for so doing.
- It is impossible for any taxpayer to manage their finances when HMRC appears to be able to change these arrangements at short notice, with minimal consultation, and then apply these rules in a retrospective manner.
- HMRC and the Government insist that the legislation is not retrospective, as it “does not determine the final tax liability”: even the Finance Committee does not accept this argument.
The legislation is effectively retrospective, as payment notices are sent for supposedly “owed” sums going back 10 years.
- HMRC has been in possession of DOTAS declarations for many years and, in many cases, has taken no action.
They now intend to charge interest for the periods of time during which they have failed to pursue the matter, despite taxpayers having been entirely transparent and adhering to HMRC’s own process.
- All information reports that the average salary of those affected is 250K. This is a mean figure, and therefore highly unrepresentative.
- The consultancy was set for only 4 weeks: An aggressively short period for such a high impact revision of the law.
- Given the impact of the proposals, the vast majority of potentially affected users were not informed, therefore did not have their say. Individuals were responsible for notifying various lobbying and accountancy groups, who then issued short notice alerts to their professional clients.
- The consultancy document received over 800 responses (as opposed to 20+ for the last one). Four hundred (50%) were ignored out of hand as coming from a “campaign website”.
- The actual response to the document did not come out until the 27th of March, which was well past the budget announcement. Therefore the decision must have been made before all responses had been processed: Does this not suggest ignoring of due process?
- The impact on individuals of having to pay huge sums of disputed tax for various periods of assessment at short notice is brushed aside. The document states “It is simply not acceptable for taxpayers to reach the end of the dispute and then contend that they never expected to have to pay over the money.”
The reality here is that most have not even reached the end of the dispute: they have only just been engaged by HMRC, if at all!
They will now be forced to pay before having even begun the dispute, with no recourse for appeal, and no actual proof that anything is owed.
Taxes believed to be owed are not automatically taxes due.
- HMRC insist that they win 80% of cases, and base their revenue projections on this figure. What is not being said is that HMRC do win 80% of the cases that they take to court.
HMRC must abide by strict guidelines before they can litigate: to put it simply, the odds must be vastly in their favor for them to challenge a scheme in court.
Given that HMRC must and does select carefully when to litigate, the 80% success rate is rather meaningless and should not be used to project a false estimate of how much tax the proposed legislation will enable to recover.