The predictable response to the new Banking Code has arrived. Accountancy Age has reported:
Michael Wistow, head of tax at City law firm Berwin Leighton Paisner, said that the code would make the UK 'a less attractive place to do business, which cannot be helpful in these most difficult times and will further damage the UK as a major financial centre.'
The code stipulates that banks be expected to follow the 'spirit of the law' as defined by HM Revenue and Customs rather than legal precedent.
'All taxpayers, including banks, should be able to rely on the courts and Parliament alone,' he said.
Of course: the law is supreme. But all the Code asks banks to do is comply with it. Now what’s the problem with that?
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Complying with the law, and complying with the “spirit of the law”, are two entirely different things. In most cases, if you ask two senior QCs what a given law means, they will give you the same answer. If you ask them what is the spirit of that law, they will be unable to answer.
Statutory interpretation rules have evolved over centuries – there is no reason to drive a coach and horses through them just to make HMRC’s life easier. It’s not as if they don’t get the opportunity to comment during the legislative drafting process.
Tugfiend
That’s why is it that every morning the world over two barristers stand up in tax court all over the world and by the end of the day one of themj is always wrong?
Please explain how that can be if the law is so easy?
Richard
I don’t beleive anyone is interested in making HMRC’s life easier. There is a concern that “the centuries old process” is outdated and in fact simply ensures that if you have enough money, you can secure tax advantages that others don’t have.
Disclosure: I don’t have enough money to pay barristers to work from dawn to dusk to find ways of not paying tax.
Another thought: If the barristers cannot answer questions about the spirit of the law, is that because they need to study a little harder? Or is it because they can answer, but would prefer not to tell their clients what those clients don’t want to hear?
no no no. There is no such thing as the spirit of the law. Its a myth put about by wooly “head in the clouds” liberals. In the real world laws mean nothing until they have been interpreted by a court or 2. HMRC mean an interpretation that gives them the biggest yield.
Alastair
The Big 4 know you’re wrong
Most lawyers know you’re wrong, and say so
Judges spend time under common law trying to find out just that thing
Now why are you right?
Are they all head in the cloud liberals?
Richard
Richard, they are not right – they are rich! You might recall the relevant passages from hitchhikers guide – the ones relating to deep thought.
There is no such thing as the spirit of the law. I have worked with law draftsmen and the intent is irrelevent. You have to interpret the words on the page in as close to their everyday meaning as you can manage without creating absurdity.
Otherwise, why have laws at all? Why not just say HMRC or the police can do what they want as long as they think its right?
And if you have to discern the “spirit of the law” you would have to discern the views of the legislative body that approved it. And how would you do that? 650 MPs? The mind boggles.
If you need to discern the “spirit of the law” that is because the law is itself unclear, which indicates that the thought behind the law – in other words – the spirit of the law – was itself unformed.
A bad idea on every level. Except for lawyers – they would have a field day with such a vague concept.
Paul
I am sorry to say that you are, as ever seems to be the acse, wholly wrong.
take as example the report here. http://www.kpmg.co.uk/services/t/cts/ctas/cfcvodafone.cfm
Judges had to write words into the law to give it the effect they felt required by parliament and to avoid an unforeseen outcome.
Quite right too. And wholly consistent with the principles of equity in common law.
Now stop talking utter drivel.
Richard
Richard,
It appears that you have misunderstood the jurisprudence.
In that case, the point was that they were trying to find a way of interpreting the law so that it accorded with ECJ caselaw. In other words, there were two pieces of slightly conflicting legal material here and the court was seeking to resolve the conflict while causing the least damage to the legislation.
They were saying that legal precedent and legislation is all that matters, and the question was how to resolve any friction. Your argument is that precedent and legislation are irrelevant, what matters is what HMRC believe the spirit of legislation to be.
Or, as quoted above,
“The code stipulates that banks be expected to follow the ’spirit of the law’ as defined by HM Revenue and Customs rather than legal precedent.”
There is nothing in the case you referenced that suggested that legal precedent was secondary to HMRC definitions.
I never said there was
And nor is HMRC
But it does prove there is a spirit of the law
Which is what HMRC is saying
And you deny – wholly without foundation
Richard, the concept you are somewhat inelegantly stumbling around seems much too ephemeral to be capable of somthing so mundane as “proof”.
Richard,
If you are saying, as you now appear to be, that a judge can read legislation in its entirety and interpret it in a way that is consistent with existing legal precedent, I do not disagree.
If you think that is the “spirit of the law” then fine. I had just assumed that when at the top of this thread it said:
“The code stipulates that banks be expected to follow the ’spirit of the law’ as defined by HM Revenue and Customs rather than legal precedent.”
You were somehow suggesting that the spirit of the law was something that could be determined by HMRC without reference to precedent: or, in legal terms, I was giving words their ordinary interpretation.
If, as you are now saying, “the spirit of the law” will not be defined by HMRC then it seems we are talking about tax matters being decided incrementally by judges through judicial interpretation of statutes and on the basis of legal precedent. Which is what we currently do. In which case why do you object tot he comment that you quote above?
Paul, I beleive you are trying to interpret “the spirit of the post” 😈