A mess of their own making.... thread

HMRC’s change of argument in RFC meant that it would be unable to pursue individuals for unpaid PAYE because it had not assessed the right party at the right time & even if it had, the conditions to xfr liability weren’t met. They must (at least should) have know that at the time

Hence the Loan Charge. It was intended to circumvent that administrative “inconvenience” & force TP’s into settlement; rendering their resistance of historic assessments futile.

In the interim HMRC delayed underlying litigation & frustrated attempts to formally join thousands of followers to lead cases.

When TP’s continued to resist (ie exercise what legal rights remained) HMRC retrospectively exercised a discretion their own Operational Manual said they didn’t have. They did so so late in Lancashire that their barrister sought to have HMRC barred from proceedings.

HMRC argued in different Courts that each didn’t have the jurisdiction to hear TP’s complaints over that exercise & told the FTT that earlier directions to link 000’s of followers had been frustrated because they had actually exercised their discretion only in handful of cases.

No doubt HMRC felt very smug at this point. Less so now I’d venture. Whilst the jurisdiction issue went in their favour they can run but not hide. They been told by the UT that when the chicken’s finally come home to roost their view is that Mr Hoey doesn’t owe anything.

Their conduct re Follower cases means that they haven’t exercised the s684(7A) discretion in the vast majority of cases. They’ve now been told the UT thinks they can’t do so retrospectively & are thus too late to collect the tax it insists “has always been due” from anyone.

What now? For most HMRC will have to exercise a power in a way the UT has told them they can’t then file claims in the County Court at considerable financial & time expense. The CC will be referred to obiter of a higher Court which will give them an easy answer. Noting is due.

Of course HMRC could appeal any CC defeat. They could continue to pursue Hoey, Higgs & Lancashire from UT to CoA. And to pursue everyone else.

Or they could finally see sense, throw up the shovel and accept that they’ve failed to assess the right people at the right time; that the law was not always clear and that if the “tax was always due” it was not due from the parties they’ve been pursuing relentlessly for years.

It has been so ever since they changed their arguments in the CoS in RFC. Everything since has been an attempt to undo the consequences of their own pleadings. I’m not confident HMRC will change track. But it should.