No retrospective tax, say freelance workers

A campaign has been initiated to speak up against retrospective taxation under section 58 of the 2008 Finance Act, which will threaten to bankrupt scores of IT contractors. With the subject of retrospective taxation circulating in Whitehall, the campaign group has spoken to MPs who sit on the Treasury Committee to check if all the facts were available when Section 58 was backdated.

Even though the “No To Retro Tax campaign” reveals that the judicial review and the court of appeal hearing regarding legislation supported the retrospection, it thinks that HMRCs suggestion was accepted and no background study was initiated. Identifying three key areas which it states were ignored when the bill was eventually passed, the campaign contacted the committee to check and see if parliament was offered all the facts when the HMRC put forward its proposals.

It is sure that the facts concealed from parliament made it impossible for an educated decision to be made when the tax office pushed to retrospectively alter an Act of Parliament, passed way back in 1987. The chairperson of the campaign group, Alistair Renshaw, said that the principle of retrospection is that somebody can end up being punished for undertaking something which was quite legal at the particular time is really wrong, precisely when it was done to counter Parliamentary and HMRC guidelines. Because of this, the retrospective components of Section 58, in particular section four, must be amended, so that the Finance Act is brought in line together with the HMRC protocol and the Rees Rules.

Victims affected would be able to confront the changes using the tax courts, Renshaw suggested, but the retrospection of the legislation at the moment disallows such an action. Retrospection is not fair and the campaign group is calling on Parliament to change Section 58 of the 2008 Finance Act to erase the retrospective components that will mean innocent victims will be pushed into bankruptcy for adhering to the law as it existed then. Renshaw also said that in the current political environment, by not supporting tax dodgers the HMRC has the right to shut down tax schemes or perceived loopholes that do not function properly or do not follow Parliament’s intentions. It could also destroy confidence in the legal system and create uncertainty in Britain as an investment haven and will not be good for business.