|What constitutes a civilised Western democracy?
What are the shared values that bind us together regardless of politics, religion or economics?
It’s quite hard to be definitive. It’s perhaps easier to name things that have no place in any definition of a civilised democracy. Very near the top of my list would be retroactive changes in the law. How can you be a good citizen or make sensible decisions about your future if something that is perfectly legal today can be declared illegal in twenty years’ time?
It’s straight out of Orwell’s 1984 or Huxley’s Brave New World. What kind of dystopian future have we arrived at when this can happen in Britain without a whimper of protest? In a recent episode of One Per Cent Weekly I pointed out the gross injustice of HMRC’s decision to turn the clock back 20 years and declare Employee Benefit Trusts illegal. The loans that were made from these trusts are now to be treated like taxable income and all the tax that would have been due over the last two decades is now due and payable.
An Elite Investor Club member shared the video with a friend who is right in the middle of this cynical attempt to plug the Chancellor’s funding gap. I won’t name him but I will quote his email in full to put a human face on the degree of suffering this move will cause:
A colleague kindly forwarded to me your weekly video and thought I would be particularly interested in your HMRC comment as I am one of those ‘criminal’ contractors caught by the Loan Charge legislative changes.
It is heartening to hear of your support as generally we are derided for breaking the law, albeit from October last year!
How Parliament can agree to apply HMRC’s terms of going back 20 years, in my case to 2007/8 so 11 years and then to charge interest at 3% on the now unpaid tax element is unbelievable. My interest alone currently stands at £20,000. And this when my scheme had a QC opinion it was legal, HMRC confirmed it was and let it continue all those years yet can now apply punitive measures.
Further, they are applying duress saying that if you do not ‘volunteer’ to settle under CLS0 2 by April 2019, whereby each tax year is treated separately but accumulated as part of the 2018/9 tax year, as against under a 2019 Loan Charge, all outstanding tax is added together plus continuing interest. So if I do settle under CLSO2 and it later goes to court (which will happen) and it’s overturned, I won’t be able to recover a penny. And this is fair! Mel Stride, Financial Secretary to the Treasury, so generously stated on the Moneybox program that HMRC are trying to help by extending the payment period to 5 years. Firstly they don’t want people to go bankrupt, plus he failed to mention the 3% interest!
You may be interested to learn that currently 91 MPs object to the legislation. On Wednesday 24th October, one of the groups I have joined – LCAG campaigners – are protesting at Westminster and to meet MPs to get the message across about the Loan Charge.
For me, unless there is a significant chance of the rules being overturned by 5th April 2019 then I will settle if only to avoid the increasing sums, the worry and the ability to get on with my life as this is likely to roll on for years. For those that fight it will be very stressful, expensive and, should the decision go against them, ruinous for a good number.
Best regards from a shortly to be low net worth individual!”
And don’t imagine it’s only ‘the rich’ that are impacted. Writing in the Weekend FT, Paul Lewis from Radio 4’s Money Box programme says that the 50,000 people impacted by this change include nurses and schoolteachers. He foresees many being forced to sell their homes to pay tens of thousands in back taxes and possibly face bankruptcy for doing something that they were advised by lawyers and HMRC was perfectly legal at the time.
I don’t know how you feel after reading this, but it’s my belief that if we don’t register a protest against this then they will simply be emboldened to go further. You can get full information about the LCAG action day and the judicial review they are launching by clicking here.
I also suggest that we each write to our MPs – between 500 and 750 people will read this article in a typical week and that number of letters will register, especially with the 91 who already agree with us. I’ve drafted a template letter to your MP that you can download, edit, print and post. Click here for the download.
Enough is enough.
It may well be that taxes must rise to fund the NHS or whatever the flavour of the month political project might be. But let’s not abandon civilised democracy for the sake of screwing a small amount of tax out of a few thousand people. Each of whom was advised by people who should know that the process was legal and above board.
Can we allow HMRC and the government to get away with this? I hope you agree that we cannot.
Until next time.