Is HMRC in contempt of Court? Or does it believe it is above the law?
In a recent Revenue & Customs Brief, 46/08, confirming that HMRC have been granted leave to appeal to the House of Lords the decision of the Court of Appeal in the Loyalty Management (UK) Ltd case. Within that Revenue & Customs Brief HMRC make this statement:
As we do not agree with the Court of Appeal’s reasoning and have appealed to the House of Lords, we will continue to proceed on the basis of our view of the law in relation to all parties, including LMUK.
The question is whether by apparently ignoring the Court of Appeal decision HMRC could be held to be in contempt of the Court of Appeal?
This is not the first instance where HMRC appear to be ignoring the law. In the St Martins decision from the VAT & Duties Tribunal they are reported to have said that if they lost the case they would not refund the VAT to the appellant on grounds of unjust enrichment. In the very first paragraph of the decision the Tribunal says:
This was a somewhat extraordinary case. Although it involved only one relatively simple question, the hearing took seven days. Notwithstanding this, and the fact that we allow both Appeals, this is not the end of the matter. There remains first the possibility that the Respondents will appeal against this decision, and aside from that there remains the question of whether or not the Respondents will refund to the second Appellant the sum of £1,489,362 which the second Appellant has demanded under a Voluntary Disclosure. It was intimated at the commencement of the hearing before us that whilst this sum would almost certainly be refunded were we to dismiss the Appeals, if the Appeals were allowed the Respondents would then consider whether to refund the relevant amounts or to refuse to do so on grounds of abuse and unjust enrichment.
To echo the Tribunal: that’s a somewhat extraordinary statement for HMRC to make. Particularly in a Tribunal hearing. I don’t know what HMRC is thinking. I know of no basis in law for the suggestion HMRC can refuse to pay the refund. The problem appears to be that HMRC is unwilling to admit that it got its timing wrong and thus missed the opportunity to prevent the appellants from gaining from the avoidance scheme that they set up. Indeed the outcome of the appeal is that because HMRC was out of time in issuing the assessment the appellants could get back more than they would have gained had the scheme been allowed to remain in place!
Contempt? Or above the law?
Related posts:
