PCG, who represent contractors and freelancers in the UK, have now given their response to the landmark BN66 ruling at the High Court. The case centred around IT consultant Robert Huitson making a challenge against HMRC’s right to claim taxes retrospectively. Mr Huitson’s lawyer had argued that the retrospective tax levy was a breach of his human rights. Mr Justice Parker, presiding, disagreed stating that HMRC were within their rights to challenge users of artificial schemes and such individuals were given warning that this could be the case. There has since been widespread concern throughout the industry that this decision will open the doors for further retrospective tax liability.
On their website, PCG chairman Chris Bryce responded: “Whilst we recognise that the High Court Judge has clearly set out his reasons for upholding the 2008 Finance Act which allowed the Revenue to claim back this tax retrospectively in this particular instance we share a common concern with all taxpayers that this judgement may be seen as opening the door to retrospection.”
He continued: “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.”
Mr Bryce concluded: “I note our concern with retrospective taxation is widely shared. PCG will continue to watch this area very closely. HMRC must not feel this is a green light to retrospectively challenge other, entirely legitimate behaviour.”