In the current economic climate, it is difficult to see the claimant and his fellow scheme members eliciting any sympathy by bleating about impending bankruptcy and stress etc. Curiously, the efforts made in this regard only reduce any prospect of me feeling sorry for them and I very much doubt I am alone in wondering what medication the claimant’s counsel was taking when he thought it would be a good idea to run with that line.
The very fact that any demands for financial clemency should follow a challenge to what was commonly regarded to be an entirely artificial arrangement, the success of which was utterly dependant on a narrow, literal construction of the law (which was rather optimistic, even in 2001), proves what I have consistently said over many years; mass marketed schemes are a bad idea.
This is not because they may, or may not, carry a high risk of challenge but because that risk is heightened by the very fact the schemes are sold to the lazy or stupid who, in turn, need to be protected from themselves. Such people fall for the saleman’s blather because it is what they want to hear, and they rarely stop to question the lack of independence of the people who are, in the loosest sense only, advising them. Nor, of course, do they appreciate that one man’s counsel’s opinion is merely another man’s seriously overpriced toilet paper.
Stand alongside loads of other stupid people and that’s one very big stupid target to be shot at. If you are going to enter into high risk planning, then fine, so long as it is lawful, but at least reduce the size of the target to be shot at by going bespoke, get expert advice that is independent of a sales commission, rationalise the risks involved, be they financial or otherwise and, vitally, consider making a tax reserve (and keeping it).
Those scheme members now facing financial ruin might take some smidgeon of consolation in being those that were sacrified for the greater good of the public interest; being, hopefully, the long overdue demise of mass market tax scheme flogging. To which end, one can but wonder why dodgy Dave Hartnett has yet to come out with one of his pub-bore announcements, proclaiming that Mr Huitson and his cohorts are tax evading criminal scum, or suchlike, and that they got everything they deserved, blah, blah, blah
Might it be that someone more politically astute than Dave Hartnett has decided that, in an election year, it might not be a good idea to shout about a prima facie success which could, all too easily, backfire when presented in a certain light to the great unwashed ?
Whilst having only the skinniest of educations in public law, I nevertheless feel content that the appeal courts will uphold the decision. At law, there is nothing which prohibits the enactment of retrospective tax legislation and the victimisation (if you like) of a relatively tiny number of the populace is never going to be held to be disproportionate to the legitimate aim of protecting the public purse.
However, what works at law does not necessarily also work well in politics, and now is not a good time to go advertising the well proven legislative shortcomings of the current government, nor the snide and incompetent manner in which its agency, HMRC, now routinely conducts itself.
When reading the judgment with that in mind, one can see the potential for the decision to be spun as highlighting the incompetence of a government, and its agency, in failing to act timeously or efficiently in its supervision and making of law and, moreover, being content with penalising citizens (voters) when covering up its own inadequacies. Certainty and prospection may be desirable in law making, but trust is an essential in politics when a general election is imminent.
If I was an Opposition dirty tricks operator, I would use Huitson as the most superficial of support for promulgating a rumour that the current government, if re-elected, will introduce backdated income tax for everyone. All merry hell would break loose for a few days and the damage would be done.
The only people who would stop to look at the detail would be those familiar with the law concerned but, within such a community, and regardless of personal political stripe, I venture it would be hard to find many who didn’t think the government long since had it coming.
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]]>Earlier judgments: High Court here and Special Commissioners here.
]]>Curiously, when the ICAEW were on notice that the Supreme Court was due to hear the PTA, a hunt around the ICAEW website shows that they were not deterred in scheduling another disciplinary hearing against Coke-Wallis for as recently as 9 December 2009. Does that mean that the ICAEW saw it as beneath them to await on the Supreme Court to opine barely a week later ? Or was it that the hearing was inadvertently scheduled due to an administrative error, with the ICAEW overlooking the mere detail that, for only the second time in its history, the ICAEW was facing a hearing before the highest court in the land ? There is, as yet, no published record of a disciplinary hearing actually taking place on 9 December, which lends support to the view that the listing was an error. Notwithstanding, when the only explanations are arrogance or incompetence, neither will play well when abuse of process is in point.
Having previously dealt with Coke-Wallis in his practising days, and being one of a good number of his professional contacts who were none too happy at the time with the seemingly disproportionate actions and attitiudes of the regulatory bodies, it is difficult not to conclude that, after a whopping 8 years and still counting, the motivations of the ICAEW, in particular, never did have much to do with their offical remit.
The substantive hearing by the Supreme Court should be before summer 2010.
]]>Dodgy Dave's comments on the HMRC advertising campagin for the NDO are noteworthy. Evidently, Dave has been supping at the cup of corporate blather and is now minded to claim that his video got a huge amount of hits.
Huge, he tells us. A random survey puts the video at having receiving no more than 50,000 hits before the Revenue removed it from view (although, if you really must, the Torygraph continues to oblige here). Which, in YouTube terms, is tiny, and that is even before you exclude the 49,900 tax experts who just had to see with their own eyes how wretched it was.
And how appropriate was it to have used YouTube as a medium for this activity ? Well, monkey smells finger comes in at ten times as many hits than Dave and sneezing baby panda (aaah, how cute is that) with 46 million hits can teach Dave a thing, or three, about huge. (And, in passing, with the indefatiguable Jean Newlove having now finally given up in her campaign for justice for her daughter, here is the obligatory festive Kirsty. She died nine years ago today.)
Moving on from the NDO, and let's be frank, most tax experts have, indeed, long since so done, other topics touched upon are the LDF, naming and shaming, and the latest proposal for mandatory notification to HMRC of newly opened offshore bank accounts contained in this condoc.
With the new year heralding the bedding down of the new penalties regime, a continuation of the assault on professionals, and HMRC becoming ever more belligerent in the exercise of its powers, the prognosis for 2010 is not good.
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It is difficult to know quite what to make of this. Having already reached the stage where HMRC is running with a constitutionally unsound political function, and doubtless doing so with “eyes-shut” governmental approval, is it worth bothering ? There is, after all, the hope, by experts of all political stripes, that a new government will see fit to suspend many of the initiatives being flogged currently in the hope that taking stock will help to get both the law and HMRC back on track.
In any event, it is hard to take much of this seriously when the language is not only inappropriate or misleading but, moreover, runs the risk of being counterproductive. In this regard, someone at HMRC needs a lesson, or ten, about keeping in the zone of credibility. Using certain language, of evasion, punishment and suchlike, drawn from that most usually associated with the criminal law will achieve nothing when there are not routine criminal prosecutions to shore up the threat that the layman will expect to be associated with such terms.
Further, we are told that public awareness of offshore tax issues is at record levels, and that taxpayers increasingly resent the small minority who fall short of meeting their obligations to society. Setting aside the issue that a condoc from a governmental agency is a wholly inappropriate medium for such politically driven, and unsubstantiated, statements, does anyone believe the sentiment ? Ask any tax expert for their take on the public mood and, if they are honest, they are most likely to report increased enquiries along the lines of “how can I go offshore to cut my tax”. No one cares much, if at all, about the argument that the young will go uneducated and the elderly will die of pneumonia, because no one tends to believe that taxes are well spent in any event.
And regardless of whether the wrongdoing is termed avoidance, evasion or, simply, non-compliance, seeking to draw a distinction between UK based and overseas wrongdoing is at odds with the fundamentals of the tax code. Non-compliance is non-compliance and territorial factors are irrelevant, or at least should be so. To put forward, and in all apparent seriousness, that non-UK failures should be more heavily penalised than their onshore equivalents, can only be suggestive that the tax code is being used for ulterior purposes. If one of the objectives is to bring about the repatriation of monies to the UK for economic reasons, it would be ironic if that objective is achieved when the banks which would house those funds are threatening to go in the other direction.
Lastly, we are told (para 3.15, page 13) that ... “The media campaign around the NDO will continue – and increase – towards the closure of the disclosure window next year.” Frankly, what bollox. Have we actually yet seen anything which merits the start of a media campaign, let alone anything which will continue and increase ?
]]>Whilst generally having no problem whatsoever with any person who seeks to pays as little tax as the law permits, and certainly having no truck with the introduction of morality into any legal analysis, the exception, if there is to be one, must be for parliamentarians.
Recent times have seen a renewed hoo-haa over Michael Ashcroft and Zac Goldsmith. And let us not forget that other charmer, Irvine Laidlaw. All three have now, at various times, made pledges over contributing their full whack to the UK coffers in return for their political status and two have persistently failed to honour their commitments. Hmm, classy.
Interviewed on Sky News, on 13 December 2009, Rt. Hon. David Cameron MP stated:
“I think it is time to pass a law that says that if you want to be in the Houses of Parliament, if you want to be a legislator, you need to be or be treated as a full UK taxpayer,”. “We would pass that law if we get elected. We would pass it straight away, we would bring it into force as rapidly as we could. I think that would put the situation beyond doubt.”
The Bill would not need to be lengthy nor complex. There should not, therefore, be any problem whatsoever in getting a draft knocked up and agreed upon, in principle, well before an election and with a Tory party manifesto pledge to match.
Now, if the Pilsbury Dough Boy was really serious about being seen as credible, he would publicly demand that Ashcroft and Laidlaw both honour their past pledges in coughing up on an "as if" basis, with suspension from the House of Lords until they do so. And, in the interests of bi-partisanship, any Labour sleazoids who have been elected to the Lords similarly should be treated in no different fashion - when it comes to Baroness Uddin, one dreads to think what number of steaming great turds are bobbing about in her personal tax history.
]]>Leaving aside whether the public would consider it is in their interests that RCPO spend the public's money and utilise valuable court time in prosecuting someone such as Mr Bowles, whose seemingly utterly pointless incarceration the public will all now have to pay for, the merest suggestion that the defendant was deprived of the resources to represent himself will be repugnant to anyone who values the notion of justice.
Reading between the lines, it is not difficult to suppose that Mr Bowles found himself in the sort of business difiiculty encountered by many, was plain unlucky, none too bright, or most probably both, in not seeking serious professional advice early on, and then found himself swept up and away by the system. Throw in a liberal dollop of more stupidity, being probably some action falling to be put before a jury as concealment, and he was done for.
Whilst one can but hope that Mr Bowles' appeal is heard soonest, there is here the starkest of reminders that anyone who finds themselves indicted for tax fraud will be 92% likely to be enjoying prison food.
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