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"Retrospective legislation
creates uncertainty and damages business confidence, as Justine pointed out. It also denies taxpayers the opportunity to adjust their behaviour in a legitimate way to avoid an additional tax burden." Not my words, but David Gauke's words. See: http://forums.contractoruk.com/accounting-legal/68901-bn66-court-appeal-...
http://www.theyworkforyou.com/pbc/2007-08/Finance_Bill/11-0_2008-05-22a.9.0
Fair comment
Yes it was tax avoidance, but the landscape was such in 2001, that entering into a Montpelier scheme was not considered 'morally repugnant' and the scheme itself was not considered 'egregious'. Add to that the full on and sometimes aggressive nature of the way these schemes were promoted and many people often signed up to them without fully appreciating the consequences of what they were agreeing to. Lots of unsophisticated scheme users, at whom these contractor types of arrangements were targeted, often felt dazed and confused following a barrage of technical jargon from the promoter's sales guys.
I appreciate the above sounds controversial in the new dawn, but if questioned whether the taxpayer would enter into a similar scheme in 2015, one could speculate that he probably wouldn't. Therefore is it fair to retrospectively reverse the treatment of the transactions entered into 14 years ago?
Linklaters agree this is out of order
See:
http://www.linklaters.com/pdfs/pdfns/Linklaters_Rule_of_Law_report.pdf