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Interim anger at tax ruling

03 February 2010

A landmark case in the High Court allowing HM Revenue and Customs to levy taxes retrospectively has prompted concern from an organisation that represents many interim managers.
 
Self-employed IT consultant, Robert Huitson, had challenged the Revenue's right to levy taxes retrospectively. His barrister said that this had broken his rights under the Human Rights Act as up until 2008, Mr Huitson's tax affairs had been legal. 
 
However, Mr Justice Parker rejected this, pointing out that the Revenue had warned the users of the tax avoidance scheme that it might be challenged, and he said the Government was entitled to change tax law retrospectively to squash artificial arrangements.
 
Chris Bryce, Chairman of the PCG- which represents other freelance professionals as well as interims- said he recognises that the High Court Judge has clearly set out his reasons for upholding the 2008 Finance Act, but the judgement may be seen as opening the door to retrospection.
 
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, he added.

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