Here's a wee conundrum for you, to start your day:
Q: When is a tax scheme (voluntarily disclosed to HMRC) legal?
A: When the government has to introduce retrospective legislation to make it illegal!
Aha!
Tax does have to be taxing.
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Another example of con-dem government bollocks! What is even more confusing is the vast majority of them probably use avoidance schemes themselves, after all government allowed these schemes to happen. What will all of these MP's do next set themselves up as corporations to reduce their tax bill? It is the constant EVADERS of tax they need to targeting - and there are plenty of them.
ReplyDeleteKen,
ReplyDeleteThe Guardian has has reported that the bank was required to disclose the schemes, so presumably they had to do so under DOTAS, therefore not voluntarily.
Stew G
According to this http://www.fcablog.org.uk/2012/02/in-which-ritchie-claims-a-voluntary-disclosure-scheme-proves-that-voluntary-schemes-dont-work/ the disclosure was voluntary and made under the Banking Code of Practice on Taxation.
DeleteAlso Laura Kuenssberg @ITVLauraK
Barclays v clear they were advised tax moves were legal in letter + spirit of law, and they say they voluntarily disclosed schemes to taxman
Fancy that ! The people who cooked up the scheme assured Barclays that it was OK!! What were they going to say - it's a bit iffy?
DeleteI assume that, because avoidance is legal, once the government introduces retrosective legislation to make it evasion, which is illegal and thus criminalises it, then surely such a move goes against article 7 of the European Convention on Human Rights which states that, people cannot be subjected to retrospective criminal laws.
ReplyDeleteHas anyone tried to pursue such a case in ECHR?
Tonk,
DeleteThe retrospective legislation doesn't make the transactions into evasion or criminalise them. Rather, it changes the tax consequences that flow from them. It therefore isn't a retrospective criminal law.
Having said that, there are people who have pursued cases involving the enactment of retrospective tax legislation through the courts on other grounds. Robert Huitson is one example. I don't know if any of these have (yet) gone as far as the European courts, though.
Stew G
Come to think of it, that may be why Gauke was so at pains to say that he didn't know the identify of the bank they were legislating against. If he had known then he might have been open to Judicial Review on the grounds of discrimination.
DeleteStew G
Thanks Stew G;
DeleteI can understand why HM Government may wish to suddenly go all out for more cash and change laws to maximise their take but, I do fear that those financial institutions that they pursue with their Robin Hood mentality, egged on by the Socialist media, may well choose to go elsewhere and then we may end up with nothing because we have few other industries that could fill the void such an exodus would leave.
I also fear that, using retrosective legislation may well frighten off future investment because, shareholders and businessmen may get twitchy over the uncertainty such a policy may bring. The economy is weak and I feel such moves by government will not help it grow stronger.