THE THINGS THEY SAY
“Great is truth, and it prevails”
Hard though it is, sometimes, to find any evidence to substantiate this saying, it does look as though the truth is turning out to be a powerful avenging force as far as our political masters are concerned, at present. But the instruments they use to exercise dominion over us (to use old-fashioned language), that is the civil servants, could themselves do with a dose of the truth drug, some may feel.
These thoughts are inspired particularly by the ‘economical’ description of certain new laws, trotted out by ministers but written for them by the civil servants, and particularly the use of the weasely word ‘clarify’.
New laws, we often seem to be told, are being proposed by ministers to ‘clarify’ an existing law. You can be almost 100% certain, when you hear this word ‘clarify’, that what they actually mean is ‘change’ the existing law.
Here are two particularly outrageous examples of this Sir Humphrey speak.
In the ‘Business Column’ of this month’s Schmidt Tax Report, you’ll find a description of the ‘transfer of assets abroad’ legislation, which basically levies a UK tax charge on anybody who has set up non-UK arrangements to avoid tax by diverting income to a non-resident company etc. A recent case decided that these rules don’t apply if the person who set up the arrangements was outside the UK, as a non-resident, when he did so. So along comes the ‘clarification’, which actually reverses this judicial decision and imposes the rules even if the non-UK structure has been set up by a person before they become resident here.
Even more recently, legislation has stamped with a heavy foot on the Isle of Man partnership idea, which was an arrangement aimed at avoiding UK tax on UK-based profits by a clever, and complicated, use of the rules for trusts and double taxation. In this case, the new legislation ‘clarified’ that the rules it was actually newly introducing have actually somehow miraculously applied since the 1980s!
You can see the point, of course. If you are clarifying the existing rules, you’re not introducing retrospective legislation. If you introduce retrospective legislation, there are all kinds of problems you, as the legislator, face, including challenges under the Human Rights Act and a basic feeling that there is no point having any law at all if it can be changed retrospectively in the future with some kind of Alice in Wonderland magic.
The practical application of the above rant? Don’t assume that you have to take retrospective legislation lying down, just because they make out it’s a clarification. If you were politically motivated, consider whether you would want to vote for a government which, you might think, was deliberately misleading you to get laws passed.