At the UK’s Royal Courts of Justice this morning, following four days of proceedings, the barrister representing the Revenue informed the judge presiding over the judicial hearing that her clients were to immediately withdraw all “assessments to tax” which had been sent to the investors seeking the charges and that it wished to withdraw completely from the hearing.
It was also agreed, in a highly unusual step, that HMRC would pay all costs on an indemnity basis. It is more usual practice in a judicial review such as this for costs of up to 60% or 70% to be awarded in favour of the winning party, rather than the entire sum.
The clearly agitated judge, Justice Charles, said he would only accept the application to withdraw on the basis HMRC provides a public statement, effectively a policy statement, setting out its exact position on Qualifying Recognised Overseas Pension Schemes. The judge gave the Revenue 21 days to decide whether it would be able to provide such a document and said if it decided it could not, he would not accept the application to withdraw and would make a judgement which he pointed out would be public and which would give his opinion on the case.
The barrister representing HMRC confirmed a high level review was already being conducted into QROPS but that the Revenue is concerned that delivering a policy statement as requested “may be useful to those who are looking to use QROPS for pension liberation”.
However, the judge said the public were “entitled to see these points recognised and to see a review published and made public”.
Failure to make proper disclosure
The judge was also very critical of the failure of HMRC to make proper disclosure during the five day hearing and in previous correspondence between the two sides. In particular he was concerned that, while HMRC had argued its decision not to send assessments to tax to a previously delisted QROPS, the Beazley scheme, had no bearing on this case, in the course of the hearing it became apparent that in fact the two cases are very similar.
It also transpired that senior lawyers at HMRC had warned the case could be lost, given the circumstances around the similar Beazley case, but that despite this, HMRC even went as far as to ask the judge to throw out the ROSIIP investor’s case.
Robert Waterson of law firm Hage Aaronson who represented the ROSIIP investors and who had assisted the investors in getting its group litigation order granted in June last year, said HMRC had this morning made a “complete capitulation”.
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