Robert Huitson, an IT consultant, has launched an unprecedented legal case accusing HMRC of violating his human rights by issuing him a heavily backdated £100,000 tax bill.
Mr Huitson, along with many other people, found a legal way to bypass UK income tax by setting up trusts in the Isle of Man. In 2008 the Government launched an offensive against such trust holders and deemed them as illegal tax evaders. However, instead of asking for tax from then on HMRC saw fit to charge people retrospectively leading to bills that people simply cannot afford.
The barrister who is representing Mr Huitson, David Elvin QC, told the Appeal Court that along with Huitson's £100,000 bill, many others have been hit with unfair, retrospective tax bills that are leaving people in a state of “financial worry, mental health problems and marital breakdown,” and that these people have no way of paying off the bills even if they use all the money that can possibly amass, including selling their family homes.
Mr Elvin added that: “The degree of retrospectivity is unprecedented in the history of tax legislation and imposes an individual and excessive burden on users of the arrangement."
It is understood that Mr Huitson wants the courts to rule that such retrospective tax bills are in breach of human rights, especially as they had done nothing wrong. Huitson argues that he took advantage of a legal loophole found in the Isle of Man that came about from a double tax treaty.
Judges at the Appeal Court will reveal their decision at a later date.