E Mail Corrrespondence with Cbi July 2011

E MAIL CORRRESPONDENCE WITH CBI JULY 2011

From: Lucy Findlay [mailto:
Sent: 29 July 2011 12:45
To: Stearn, Trevor
Subject: Lucy Findlay CBI The introduction of Retrospective Taxation

Will do Trevor.

The IR35 issue and managed service companies are issues that have been raised with us by a number of members in the past as well as the campaign run by the professional contractors group.

Kind regards

Lucy

Lucy Findlay | Chief of Staff

From: Stearn, Trevor [mailto:
Sent: 29 July 2011 12:43
To: Lucy Findlay
Subject: The introduction of Retrospective Taxation

Lucy,

Thanks for the prompt reply. I hope that your tax team do not treat it as an individual case/scheme but look at the potential ramifications it may have for undermining the certainty of tax law(s) in the future.

I was hoping that you might then see reason to inform your many members of the importance of this ruling for business in UK plc.

Thanks again

Regards

Trevor stearn

From: Lucy Findlay [mailto:
Sent: 29 July 2011 12:37
To: Stearn, Trevor
Subject: RE: The introduction of Retrospective Taxation

Trevor – many thanks for your email. I will ask our tax team to look at the issue and respond direct.

I also understand that a meeting between CBI and your CEO is currently being set following an approach by his office.

Kind regards

Lucy

Lucy Findlay | Chief of Staff

From: Stearn, Trevor [mailto:
Sent: 29 July 2011 11:25
To: Lucy Findlay
Subject: The introduction of Retrospective Taxation

Lucy,

Thank you for being so helpful. Below is the e-mail I sent to Richard Maughan describing the current situation on the introduction of retrospective taxation into the UK.

Kind Regards

Trevor Stearn

From: Stearn, Trevor
Sent: 29 July 2011 11:08
To: ''
Subject: Retrospective Taxation

Richard,

I am not sure which division of the CBI to contact but feel that the relevant personnel within the CBI should be made aware of a recent ruling by the Court of Appeal that has potentially serious ramifications for UK taxpayers and UK plc. In the event of defeat in the Supreme Court (if it is even permitted to go that far) then retrospective taxation has been introduced in the UK.

The Budget of 2008 introduced BN66 that closed down a tax avoidance scheme (7 years after the IR knew of it) but also retrospectively imposed tax on the scheme members back to 1987 (the original Padmore case). The reason many hundreds of IT and engineering contractors became members of the scheme was the introduction of IR35 in 2001 and the fact none of us had any certainty about our tax position at that time. We are not the “disguised employees” that the spin doctors termed us. For your information, I am a Senior Drilling Engineer with some 40 years work in the UK North Sea oil and gas industry behind me and I have been a freelancer since 1990.

We believe that parliament was misled over this issue in the 2008 Budget and that retrospective taxation sets a dangerous precedent for UK plc.While we in this scheme may be seen as a group of filthy tax “avoiders/evaders” (although even the OECD admits transparent tax avoidance is not illegal and the scheme was 100% transparent to the HMRC) who in the eyes of the general public probably deserve everything that happens to us, it is the retrospective precedent that is the key. I have also attached an HMRC memo that shows they knew of the scheme in 2002 before we had even sent in our first tax returns for tax year 2001-2002 (in January 2003).

I have also attached the CoA ruling and in particular draw your attention to paras 47 and 48 and others where it is deemed as retrospective taxation but is also deemed acceptable. Prior to the Budget of 2008 all tax changes were prospective when tax avoidance schemes were closed, the question now is once a precedent is set, however obscure, where does it stop?

I am sure a high percentage of the companies currently based in the UK, many of whom are considering whether to relocate from the UKbecause of the current tax regime, would be very worried by the fact the precedent for retrospective taxation has been set in the UK. I believe this situation should be brought to the attention of your members.

I am hoping the CBI will be willing to inform their members about this ruling and even consider raising the issue with government.

Perhaps you can kindly confirm receipt of this e-mail and, if it is of interest, the person I might contact within your group for any further discussions.

Kind regards

Trevor Stearn

EnQuest PLC, Company No. 7140891. Incorporated in England and Wales. Registered office: 4th Floor, Rex House, 4-12 Regent Street, London SW1Y 4PE United Kingdom
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