No, no, of course we shouldn\’t question HMRC

And we should definitely give them more power too:

The woman was Louise Brittain (correct). She now works for Deloitte, charges around £750 an hour, and is described as very tough and experienced. In 2010, she was ranked 17th in Accountancy Age’s list of the industry’s top 100 power players.
She has said that she works out “the pinch point for the fraudster in advance. It could be their family or a house they’re particularly emotionally attached to.”
Having identified it, she goes for it. Mr Hone’s \’pinch point’ was his business. He and his fellow directors, Richard Mills and brothers Pat and William Owen, whose father had started the company in 1971, didn’t know what to do. “We were looking at financial ruin. Louise Brittain told us our personal bank accounts had all been frozen. We had been ejected from our own company. Thirty-two people had lost their jobs. We didn’t even know where we would get money to live on.”
The action by HMRC had come out the blue. “Our business, systems and accounts had been given a very thorough going-over by a man from HMRC only a month prior to the liquidation order,” Mr Hone recalls.
“We had a letter back from him which gave no hint that we were suspected of fraud. In fact he said our accounts were in order.”

As it turns out, there was no fraud, HMRC were lying, and the business was closed down.

So yes, of course we should give HMRC more power. There just isn\’t any cost at all in going after tax cheats, is there?

32 thoughts on “No, no, of course we shouldn\’t question HMRC”

  1. So HMRC presented fraudulent evidence. The case boggles the mind, how the fuck can these shits get away with what is simply criminal behaviour?
    I wonder if this might be a case for the Human Rights court?

  2. This is part of a more general and increasing problem of allowing a State to take pre-emptive action. It should be a general principle of law that no such action can be taken until a person has been found guilty by a jury trial. But it isn’t.

  3. To be fair to the taxman here, the failure was actually by the liquidator. I hope she has enough PI insurance to cover the mega-damages she’s going to be paying. As always in insolvency, the liquidator takes on a huge risk, and the only protection is to play it by the book. Unless the silly cow took independent legal advice which covers her, she’s up the cloaca without so much as a raft, let alone a paddle.

    As is entirely obvious, the liquidator’s duty to get the best return for creditors involves assessing the strength of any outstanding claim and challenging it if necessary.

    Eddy>

    One should be wary of reading too much into a bare-outline report. We don’t know enough to know if HMRC were fraudulent or merely mistaken. Either way something needs to be done about it, but the appropriate responses would differ.

  4. The “pinch point”
    Fair enough maybe if the idea is to get the money owed.
    Bloody unfair if the point is to prevent any due legal process by the people who are being “pinched”.
    Looks very much like the latter from where I’m sitting.

  5. Well that’s the point isn’t it? Apparently HMRC can just decide you’ve committed fraud, without one of those pesky “trial” things. So old fashioned, due process, isn’t it?

  6. Officer Smith had sworn an affidavit in support of the application for the appointment of a provisional liquidator. He did not give evidence at the trial; but his evidence was adopted by Officer Duxbury, who did. Officer Smith gave evidence of many examples of interceptions of vehicles where the physical evidence of the vehicle and its load did not correspond with the paperwork in the AAD. However, most of these interceptions were not notified to Abbey at the time; and only three of them were covered by the assessments on which the petition debt was based. Three out of some 3,600 movements over the same period is about 0.08 per cent. Officer Duxbury explained how the remaining 298 consignments had been selected for inclusion in the assessment. The criteria were that (a) the owner of the goods was either SAS or W2W; (b) the receiving warehouse was either MT Manut or Wybo; (c) the haulier was MH Forwarding, and (d) the movement had taken place within the year preceding January 2008. In other words the movements covered by the assessments were extrapolated from the three interceptions.
    The Re-Amended Particulars of Claim allege that that each of 301 consignments of duty suspended alcohol purportedly transported by the Company for purported supply to customers of SAS and W2W did not arrive at their destinations but were instead diverted within the United Kingdom. A Request for Further information of that allegation asked: “in relation to each and every of the 301 consignments referred to, please set out the basis for the … allegation that the given consignment was not received at its stated destination.” The answer (verified by a statement of truth signed by Ms Brittain) said:
    “First, each of the consignments transported on behalf of … SAS and … W2W was intercepted by HMRC empty.”
    Although in oral evidence Ms Brittain refused to accept this, the only reasonable reading of that plea is that it was alleged that each of the 301 consignments had been intercepted by HMRC and found to be empty. This was an exaggeration by a factor of a hundred. How the allegation came to be made was unexplained; and it did no credit to Ms Brittain that she refused to accept that this was the plain allegation.

  7. Oddly enough, if you give the State (or anyone) sweeping powers with little or no restraint except relying on its goodwill and benevolence, the State fucks people over.

    It has done so for hundreds, even thousands of years but people STILL do not seem to get it.

  8. What I do not understand in these cases- where the affidavit is found to be false – is that there is no attempt to pursue the perjury (for that is surely what it is).

  9. Is it too much to ask that this Brittain thing is made personally liable for her negligent actions?

    I hope the Hones take HMRC to the cleaners and ensure she never works again.

    Not that I’m that bothered by this case, of course. 😉

  10. So Much for Subtlety

    She has said that she works out “the pinch point for the fraudster in advance. It could be their family or a house they’re particularly emotionally attached to.” Having identified it, she goes for it.

    Let me blatantly violate Godwin’s law by saying it is all a bit redolent of the Gestapo isn’t it? It could be their family? What the f**k would this b!tch do if it was?

    Liberalism as we have traditionally understood it is dead in the UK. Civil Liberties exist on paper, but the mentality of the ruling class has moved on. They no longer even understand the basis of that liberal society. Because they do not even grasp the basic concept freedom in the UK can only die a long and slow death.

  11. “Some commentators may not have realised that Louise Brittain is not and apparently never has been employed by HMRC.”

    She does seem to be making 750 quid/hour from her work with them though. Incentives as always….

    It’s interesting that they also focus this action on the small-mid size UK company, where they can impound all the owners resources and make it very difficult to fund a defence.

  12. I wonder how much of this is a consequence of Brown’s merging of Inland Revenue (which I found generally reasonable, polite and efficient) with Customs and Excise (which I found arrogant, pre-emptive, and rude). This particular case would apparently have been Custom’s anyway, but they seem to be taking the same approach in ordinary revenue cases now.

  13. @IanB This “track your spending” thing: what information can they legally get from credit review agencies? Has the Information Commissioner expressed an opinion?

  14. “Some commentators may not have realised that Louise Brittain is not and apparently never has been employed by HMRC.”

    Bloody hell, Paul, do you use an electron microscope to split hairs? Abbey call her in themselves, did they? Or is she like some sort of financial windscreen washer? Catch you at the lights while you’re distracted & then try & menace you for the payment.

  15. [email protected]
    “what information can they legally get from credit review agencies? Has the Information Commissioner expressed an opinion?”

    If you’ve been under the impression the Data Protection Act is to protect your data any chance you’ll be interested in buying this bridge? If you look at the small print goes with any arrangement entered into covered by it, you are specifically signing away all your rights to confidentiality to almost anyone who’s the slightest interest in knowing. The only purpose of the Act was stopping you being able to know anything about them.

  16. Bloody hell, Paul, do you use an electron microscope to split hairs?

    Technically, an electron microscope could not be used to split hairs since it is purely an observational device.

    😉

  17. From the telegraph article:
    “The woman was Louise Brittain (correct).”
    Any idea what the ‘(correct)’ bit means, some stray text from a sub perhaps?

  18. CHF-

    I wonder how much of this is a consequence of Brown’s merging of Inland Revenue (which I found generally reasonable, polite and efficient) with Customs and Excise (which I found arrogant, pre-emptive, and rude).

    Seems plausible. Customs men have always had a deservedly bad reputation. As an aside, it’s worth remembering that the bafflingly admired Adam Smith was himself an enthusiastic Customs Man.

  19. “Technically, an electron microscope could not be used to split hairs since it is purely an observational device.”
    I was aware of that Ian. I’m presuming he’s got a tiny little knife to go with it.

  20. “If you’ve been under the impression the Data Protection Act …”

    Not entirely: those were two separate questions. Given the Home Office’s snooper’s charter, obviously they’ll just watch everyone’s Amazon transactions. (The credit report thing seemed odd because you’d think if you’re sustaining an overly-high spending habit by borrowing, that’s possibly because you haven’t actually been earning it. Still, I suppose they know what they’re doing.)

    Even so, historically, the English courts and even the Revenue Commissioners have taken a dim view of Inland Revenue harassing people speculatively, and there is a legal framework. I just wondered how much had changed, since we exchanged the civil service for the secret service.

  21. I read this yesterday on the Telegraph and was disgusted. A telling statement though is para. 110 of the judgement which states:

    “Although in oral evidence Ms Brittain refused to accept this, the only reasonable reading of that plea is that it was alleged that each of the 301 consignments had been intercepted by HMRC and found to be empty. This was an exaggeration by a factor of a hundred. How the allegation came to be made was unexplained; and it did no credit to Ms Brittain that she refused to accept that this was the plain allegation.”

    That looks an awful lot like professional misconduct and/or contempt.

  22. It seems to me that if you’re going to accuse HMRC of lying and fraud on the basis of the actions of Louise Brittain, it does make a difference whether or not Ms Brittain was acting as an agent of HMRC.

    If you care about this case, it’s worth skimming through the judgment – ukliberty posted a link.

    On the law regarding HMRC’s claim against Abbey Forwarding: “Because of the way that the legislation works, if there is an irregularity HMRC are entitled to assess and recover the duty from the provider of the movement guarantee, even if he had nothing to do with the diversion. Thus Abbey’s liability to HMRC does not depend on its participation in fraud. It depends upon use of its movement guarantee or, in one case, simply on its position as consignor of the goods.”

    Whereas in this case the liquidators of Abbey Forwarding were seeking a ruling that its former directors were personally liable for its alleged debts. To this purpose: “The pleaded case is thus squarely founded on the assertion that there was outward diversion fraud. Inward diversion fraud is not alleged. It is also not alleged that the fraud in which Abbey is said to have participated was one in which Mr Hone alone was involved. The allegation is that all of the three directors (Mr Hone and Messrs Owen, although not Mr Mills) were, in effect, engaged in a joint enterprise.”

    So the judge was ruling on a much stronger claim than HMRC’s. At one point, he writes: “This is, I think, one of those rare cases where the burden of proof makes a difference. I have held that the burden of proof is on the claimant. It is for the claimant to establish that it is more probable than not that the goods did not arrive. A mere suspicion that that they might not have is not enough. If I am left in doubt, the doubt is resolved in the defendants’ favour by the burden of proof. The position would be different in a tax appeal; because in a tax appeal the burden of proof would resolve the doubt in HMRC’s favour.”

    The judge was evidently unimpressed by Ms Brittain, for the liquidators, by Mr Duxbury for HMRC, and by Mr Hone, one of the former directors, for himself. It’s not clear what ruling the judge would have reached if hearing a case on HMRC’s claim. But his remarks do suggest that he might well have found in HMRC’s favour.

    Therefore, some of the animus directed against HMRC here may be misplaced.

  23. Paul, as far as I can work out, what you’re saying there is the playing field wasn’t tilted far enough in HMRC’s direction. If it had been a tax issue they wouldn’t have been obliged to present compelling evidence, just make the accusation & the onus is on Abbey to show it’s unfounded. And indeed, that’s how HMRC seems to have gone about it both in their actions before the case & during. Abbey’s guilty unless it can prove itself innocent. They got to court & found they’d actually have to work to stand the case up, couldn’t & lost.
    Exactly which animus is misplaced?

  24. Supplementary questions:
    #Do you consider trial by ordeal or judicial torture would improve procedure in revenue cases?

  25. I have no objection at all to how the burden of proof falls in this case, nor to the judge’s verdict. However, HMRC was not a party to it, it was between the liquidator and the former directors.

    What my post sought to point was that, as the judge explained at some length, the burden of proof would be different in a tax appeal.

    The way movement guarantees work is that, for tax purposes, the issuers of the guarantee are responsible for ensuring that the goods are delivered as specified by the paperwork, and that they can prove it. If Abbey Forwarding was unwilling to accept this responsibility, it shouldn’t have gone into the business.

    I don’t mean to comment on the rights and wrongs of the tax case. As I said, the judge was plainly unimpressed by both the HMRC witness and one of the defendants. But it is simply a mistake to assert on the basis of the liability case that HMRC got its tax ruling wrong.

  26. I checked this one tonight with an insolvency practitioner. He said people in the business are hoping that this time Louise Brittain slipped up enough that she’ll actually feel the consequences.

    He mentioned the line about how some people get a hammer and then find that everything looks like a nail, then said that Ms Brittain has a sledgehammer, and now everything looks like a kneecap to her.

    In this case, the liquidator had a legal duty to strongly consider challenging the tax ruling. HMRC screwed up, but not in a huge way; it should have been sorted out within days of the liquidator being appointed, if she’d done her job.

  27. I am one of the ex-directors of Abbey. Louise Brattain’s PI insurance won’t be called upon. HMRC indemnified her against all adverse costs in the action against us. She also has a loan agreement of between £300-£400k with them which together with the funds from the Company, about £800k, she had used to launch the action. She only had to pay the loan amount back to HMRC if she was successful against us, which of coursed she failed to do.
    As far as her advice was concerned, we pressed her for sight of it as we had finally rested Locus from her to appeal the outstanding assessments in the first tear Tribunal. As it was Company advice, it was right that we reviewed what had persuaded her Counsel that the appeals were ‘unwinnable’ and ‘without merit’. She told us that we could not see that advice as it was verbally taken over the telephone and that the Company did not pay for it, she paid for it herself. She also said that Counsels advice was taken on a ‘full set of papers’, the full set of papers amounted to over 40 lever arch files. I have those letters so it’s not hearsay. That must have been some phone call.
    If anyone has any questions I will be pleased to reply.

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