About My Case

1. Why did the Inland Revenue launch a case against you and what was it all about?

I think that is a question best put to HMRC. Why HMRC focussed on me is a genuine mystery to me and to my advisers.

In summary, HMRC made inquiries into three separate elements of my tax affairs:

i. An inquiry was made into aspects of the taxation of my UK companies. This is now settled.

ii. An inquiry was made into my domicile going back from the period I left the UK up to the 2003/2004 tax year. I lost this case 18 months ago. I was deemed to be still domiciled in the UK for tax purposes although I viewed my home to be in the Seychelles having left the UK to live there in 1976.

In making these arrangements, I relied, like all taxpayers, on HMRC’s own guidance in the form of a practice statement known as IR20. In IR20, like all practice statements, HMRC is stating the tax law and explaining how it will put the law into practice.

I was not granted leave to appeal this decision on domicile for the period up to 2003/2004 tax year. Through my tax advisers, I am in dialogue with HMRC to determine my status of domicile from 2004 onwards.

iii. An inquiry was made into my residency status. I left the UK in 1976 and viewed myself as non-resident for tax purposes. I followed HMRC’s own guidance on the days I was allowed to spend in the UK (91 days on average for each year over four years or fewer than 183 days a year).

I lost this case 18 months ago and learned in August 2010 that I had been granted leave to appeal that decision.

2. Were you pushing the envelope with the number of days that you were in the UK?

No. I went to the best advisers available to me, asked them to explain the rules to me and then went to some trouble to follow those rules by organising my travel, business trips and family events to ensure I did not exceed the number of days I was allowed to be in the UK.

3. Where does the £30,000,000 figure come from?

I do not know. The number did not come from me or my advisers. It is not one I recognise and bears no relation to the real figures we have been dealing with. For example, in the inquiry into one of my UK companies, HMRC demanded payment of just over £29m.

This proved rather ambitious as the issue was settled for £647,500, which is still a significant sum. However, paying that amount of tax was the best option I had since legal fees to contest the issue further would have been more than that figure.

4. Why were the majority your legal costs paid by HMRC?

There have been several phases to my dealings with HMRC and some changes in approach by HMRC led to me being granted costs.

In the first phase of the hearing to determine residence and domicile, HMRC argued that the law was rather vague and that although taxpayers (and their advisers) rely on practice statements, they (HMRC) would not be bound by guidance.

In phase two, at the Court of Appeal, HMRC changed its stance and argued that IR20 was binding after all but that there was an “implied term” within the document which required taxpayers seeking non-resident status to make a distinct break with the UK.

Because of this change of argument after such a lengthy hearing, the judge granted me legal costs against the revenue to reflect the significant amount of court time which had been wasted by this change of approach.

5. You lost your case on the basis that there was an implied term in IR20 which meant that you needed to make a distinct break from the UK in order to qualify as a non-resident. Do you think this is fair?

No. HMRC seems to be making up tax policy as they go along to suit their own agenda. There is too much ambiguity and too many taxpayers are being wronged yet are too fearful of the expense to complain and fight the injustice.

Tax law should be clear, explicit and transparent. That way, people can plan their affairs with certainty, pay tax and move on. I and my companies have paid millions of pound of tax over the years and that is right and fair. What is not fair is to be at the whim of an over mighty government department which goes about its business without consistency.

6. Do you believe that there are underlying policy issues related to your case?

My case is not just about non-doms and non residents. My case is about fighting for clarity in the UK tax system and for fair and consistent treatment of all taxpayers so that we can all plan our tax matters with certainty, pay the tax which is due and get on with our lives.

I left the UK in 1976 and told the Inland Revenue and the Bank of England at the time. The Bank of England acknowledged the letter at the time and then, in 1980, I had a letter from the Inland Revenue asking for details of my travel movements, so they clearly accepted that I had left the country.

I am an entrepreneur who wants to get on with business rather than lead a crusade on tax matters. However, the widespread legal interest and general coverage of the case suggests it does have broader implications in ensuring all business people are treated fairly rather than assumed to be on the make.

The case is also bad news for UK Plc. I am an international businessman with companies in 16 countries. Dealing with the UK tax regime takes my board and managers more time and costs more in advice than any other country in which we have factories or offices.

That is a serious indictment of the UK’s tax system. It means that my companies – and many other international businesses – will avoid setting up businesses in the UK if we can avoid it. As a result, the UK will miss out on significant wealth creation opportunities going forward and the resulting tax revenues.

7. Why do you think HMRC replaced IR20?

That is not for me to say and is a matter for HMRC.

8. Has this case affected your business dealings negatively in any way?

The prospect of defending one’s interests against the might of HMRC is not an undertaking for the faint hearted. It is costly and has led to me becoming well-known for fighting a tax case rather than for other things I have achieved in business - which is not how anyone would wish to be remembered!

9. How long do you spend in the Seychelles per year, on average and how long do you spend in the UK?

This year, I have spent 6 days in the UK so far, as calculated under what seems to be the new ruling because I have totalled the days spent in the UK where I have stayed beyond midnight.

Under the old ruling of the IR20 practice note, those same visits would have amounted to no days since the day of arrival and day of departure did not count.

I go to some trouble to keep records and have figures for days spent in the UK going back a very long time, as you can imagine.