Concern over potential flood of retrospective taxes

Robert Huitson, a self employed IT consultant, had challenged HMRC's right to levy taxes retrospectively. His barrister stated that the ruling broke Huitson's Human Rights as his tax affairs were conducted legally until 2008.

However this was rejected by Mr Justice Parker who pointed out that HMRC had warned people using the tax avoidance scheme that it may be challenged, and said that the Government was allowed to amend tax law retrospectively to crush artificial arrangements.

Chris Bryce, the PCG chairman, said although we appreciate that the High Court Judge has laid down the reasons for upholding the 2008 Finance Act which gave the Revenue the power to reclaim this tax retrospectively, we share the concern of taxpayers that this may lead to further retrospection.

For the seven years leading up to 2008, the Revenue failed to act, even though they knew about these arrangements. The PCG does not encourage off-shore tax arrangements but we strongly object to taxpayers being penalised retrospectively for organising their tax matters in a manner that was completely legal at the time they did so.

Chris Bryce concluded the PCG will go on watching this area very closely. The Revenue should not feel they have been granted a green light to challenge other, completely legal behaviour retrospectively.

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