High Court win for HMRC on offshore scheme
IT contractor fails in application for judicial review
The taxman has won a battle High Court after its request for £100,000 of
backdated tax from an IT contractor was challenged with an application for
judicial review.
The High Court rejected the apllication yesterday, according to the
Financial
Times, saying the backdated demand for the tax did not breach human
rights.
The case relates to contractor Robert Huitson who used a scheme on the Isle
of Man, set up up by Montpelier Tax Consultants, which paid an annual fee for
being the owner of a life interest in an offshore trust.
The FT reported that the court heard that scores of other people had
participated in the scheme and that some faced bankruptcy as a result of claims
for backdated tax from HMRC.
The Professional Contractors Group, a body that represents IT contractors,
said: “We share a common concern with all taxpayer that this judgement may be
seen as opening the door to retrospection.
“For a seven year period up to 2008 HMRC failed to take any action before the
law was changed, despite being well aware of these arrangements. Whilst PCG in
no way encourages off-shore tax arrangements we object in the strongest terms to
taxpayers being retrospectively penalised for arranging their tax affairs in a
way which was entirely legal and proper at the time they undertook to do so.”