I make the following brief reflections on the Hoey proceedings.
They reflect solely my perception of the oral arguments and should not be taken as any comment on what the law actually says/means.
In short, I am pessimistic about Mr Hoey’s chances of success.
1/9
#hoey
They reflect solely my perception of the oral arguments and should not be taken as any comment on what the law actually says/means.
In short, I am pessimistic about Mr Hoey’s chances of success.
1/9
#hoey
It must be remembered that there are a number of different issues – ultimately representing HMRC’s different lines of attack.
2/9
2/9
HMRC’s most ambitious approach was to invoke the “transfer of assets abroad” code – this met strong resistance from the Court and I expect the Court to find in Mr Hoey’s favour on this point.
That leaves the case squarely in the realm of employment taxes and the PAYE rules.
3/9
That leaves the case squarely in the realm of employment taxes and the PAYE rules.
3/9
It is here where I see the case being determined.
Mr Hoey’s case is based on his claim to the PAYE credit which HMRC acknowledge would ordinarily exist. HMRC’s case is based on their attempts to withdraw the credit by use of their discretion under s684(7A).
4/9
Mr Hoey’s case is based on his claim to the PAYE credit which HMRC acknowledge would ordinarily exist. HMRC’s case is based on their attempts to withdraw the credit by use of their discretion under s684(7A).
4/9
On s684(7A) there are essentially two arguments.
1)Was it appropriate for HMRC to use their powers under s684(7A)?
2)Did exercising their power under s684(7A) have the effect of actually withdrawing a credit that existed previously?
5/9
1)Was it appropriate for HMRC to use their powers under s684(7A)?
2)Did exercising their power under s684(7A) have the effect of actually withdrawing a credit that existed previously?
5/9
On point 1, I expect the Court to be persuaded that the underlying avoidance (albeit not of Mr Hoey’s doing) to be sufficient to justify the use of the extraordinary powers in s684(7A). Indeed, those powers were to be used in cases of practical difficulty.
6/9
6/9
Point 2 is more critical in my view. Although I would like to think that the Court will read the powers in s684(7A) as applying prospectively only (as did the Upper Tribunal), there is a real risk that the Court will take a different approach.
7/9
7/9
That leaves only the question of jurisdiction. It is hard to guess which way that will go and the point might well be academic in light of other aspects of the Court's decision.
8/9
8/9
I think that both parties will accept that they got a fair hearing but I fear that Mr Hoey will come off second best … pending any appeal to the Supreme Court.
9/9
9/9
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