Levy under the UK/Switzerland cooperation agreement
Our pick of this week's cases
InK Vrang v HMRC[2017] EWHC 1055 (9 May 2017), the High Court found that the claimant was not entitled to the refund of an amount levied on her undisclosed Swiss bank account.
Ms Vrang was a Swedish national who worked in London. She had three bank accounts in Switzerland, with Credit Suisse, into which she put her earnings.
Credit Suisse sent her two letters in 2012 alerting her to the Agreement ‘on cooperation in the area of taxation’ between Switzerland and the UK. It warned her that if she did not give voluntary disclosure of her Credit Suisse accounts to HMRC, Credit Suisse would take from her accounts an unspecified one-off payment, calculated by reference to a formula in the agreement. She took no action in response to those letters and Credit Suisse took over £58,000 from her account. Ms Vrang appealed to the High Court against HMRC’s refusal to refund the monies.
The court observed that the one-off payment was calculated, levied and paid to HMRC in accordance with the agreement; the fact that FA 2012 (implementing the agreement into UK law) did not expressly provide for such a levy did not make it unlawful. In any event, the levy was impliedly approved by parliament, since the receipt of the sums led to the operation of Sch 36 para 6. Similarly, Parliament must have known that, in the absence of disclosure, there could be no assessment of liability; the levy bore no connection to an assessed tax liability.
The court added that the absence of provision for refund was ‘an inevitable consequence of the agreement, rather than of Parliamentary oversight’.
The claimant’s arguments under ECHR were also roundly rejected: ‘There was no requirement that, to be proportionate, a late and careless levy payer should be able to disclose free of the structure of the agreement, and then claim a refund.’
Finally, the court found that HMRC’s discretionary refund policy was lawful in that it excluded cases where the responsibility for their difficulties lay squarely with the levy payers.
Why it matters: The High Court observed that: ‘Ministers may not have anticipated that the generally compliant tax payers would have failed to opt for voluntary disclosure where that was in their interests, but this supported rather than confounded the view that parliament and government understood how the legislation was framed and intended to work.’
Levy under the UK/Switzerland cooperation agreement
Our pick of this week's cases
InK Vrang v HMRC[2017] EWHC 1055 (9 May 2017), the High Court found that the claimant was not entitled to the refund of an amount levied on her undisclosed Swiss bank account.
Ms Vrang was a Swedish national who worked in London. She had three bank accounts in Switzerland, with Credit Suisse, into which she put her earnings.
Credit Suisse sent her two letters in 2012 alerting her to the Agreement ‘on cooperation in the area of taxation’ between Switzerland and the UK. It warned her that if she did not give voluntary disclosure of her Credit Suisse accounts to HMRC, Credit Suisse would take from her accounts an unspecified one-off payment, calculated by reference to a formula in the agreement. She took no action in response to those letters and Credit Suisse took over £58,000 from her account. Ms Vrang appealed to the High Court against HMRC’s refusal to refund the monies.
The court observed that the one-off payment was calculated, levied and paid to HMRC in accordance with the agreement; the fact that FA 2012 (implementing the agreement into UK law) did not expressly provide for such a levy did not make it unlawful. In any event, the levy was impliedly approved by parliament, since the receipt of the sums led to the operation of Sch 36 para 6. Similarly, Parliament must have known that, in the absence of disclosure, there could be no assessment of liability; the levy bore no connection to an assessed tax liability.
The court added that the absence of provision for refund was ‘an inevitable consequence of the agreement, rather than of Parliamentary oversight’.
The claimant’s arguments under ECHR were also roundly rejected: ‘There was no requirement that, to be proportionate, a late and careless levy payer should be able to disclose free of the structure of the agreement, and then claim a refund.’
Finally, the court found that HMRC’s discretionary refund policy was lawful in that it excluded cases where the responsibility for their difficulties lay squarely with the levy payers.
Why it matters: The High Court observed that: ‘Ministers may not have anticipated that the generally compliant tax payers would have failed to opt for voluntary disclosure where that was in their interests, but this supported rather than confounded the view that parliament and government understood how the legislation was framed and intended to work.’
