The campaign to overturn section 58(4) as a blatant example of retrospective taxation has become a much bigger issue than those relatively few contractors affected, however difficult their personal circumstances.
Many more contractors, individual taxpayers and businesses will pay the price if retrospective taxation is allowed to flourish unchecked. Yet this is what Exchequer Secretary to the Treasury David Gauke stated the government has the power to do when arguing in defence of section 58(4) before a Public Bill Committee hearing.
The attempt to repeal section 58(4) through an amendment to the Finance Bill 2012-13, and thus overturn the retrospective taxation that has consigned around 2,000 contactors to financial hardship or ruin, failed. The amendment was withdrawn by its sponsor.
No To Retro Tax’s (NTRT) failure to acknowledge the importance of the broader issues when it published its response to the withdrawn amendment does its campaign no favours.
And despite its website header saying “campaign against retrospective taxation”, the organisation’s website and article response are too inward looking and focused to appeal to a broader support base.
The response to our news coverage of BN66 has not been in favour of the proposed amendment, and responses to our team have been highly critical of the contractors affected. The words “tough”, “you” “greedy” appear interspersed with less savoury words.
This suggests that NTRT has not won the hearts and minds of the contracting community, much less taxpayers in general. Yet all taxpaying individuals and businesses should rightly be very concerned about the plight of the BN66 contractors, because it could be them next.
And despite NTRT’s positive engagement with MPs, unless more than 2,000 voters, the estimated number of contractors facing financial ruin, have a positive opinion about the importance of its fight against retrospective taxation, then NTRT is unlikely achieve its aims.
The reason BN66 and section 58(4) should rightly be repealed and tax certainty returned to the contractors involved is because not to do so leaves the door open for this government, and future governments, to make further retrospective changes to tax legislation. And that is wrong.
The original legislation leading to section 58(4) should have been tested in the courts and not imposed on a minority by zealous Treasury and HMRC officials.
But by diluting its message and focusing on the needs of a few contractors that many perceive at best to be overpaid and privileged and at worst aggressive tax avoiders, NTRT risk losing the fight against all retrospection, and not just section 58(4). If that happens, then we could all end up paying the price.