In the wake of the Scottish Referendum, an RHI Class Action Lawsuit was filed in a Northern Irish court by an individual who suffered financial hardship as a result of being made to pay the “regulatory remission” fees on the basis of an incorrect calculation of their income tax liability. These fees have been described by the High Court in Belfast as “arbitrary and unlawful” as they were calculated without the individual’s knowledge. Despite these allegations, there is little evidence to prove that the Revenue Service conducted an unlawful scheme of deception and this remains an ongoing case.
The main focus of the class action has been whether the Revenue Service intentionally misled the public as a means of increasing the popularity of the RHI scheme. If it were proved that an RHI was improperly administered, this would be in contravention of the Revenue’s duty of care to the taxpaying public. The claimant’s legal representatives claim that the Revenue did not provide enough guidance to the public or adequately monitor the administration of the scheme, or if it did, the policy was not followed.
In the course of the legal process, the Revenue has repeatedly denied claims of wrongdoing by its employees or officials and it maintains that it was operating within the confines of the law at all times. The High Court in Belfast has dismissed allegations against the Revenue as unsubstantiated. However, there are significant issues relating to the manner in which the system was implemented that require further investigation.
When an individual receives a notice from the IRS stating that they are liable for paying an annual return on the tax they have paid for the previous year, a refund check will be automatically issued to them. When they fail to respond, the IRS may begin garnishing their wages, bank accounts and other assets to recover the money they owe. If a person is unable to meet their obligation to the Internal Revenue Service, the amount they have accrued will be added to their personal tax liability for the subsequent year. This process is designed to provide revenue with an ongoing source of revenue and has been abused by unscrupulous accountants and tax professionals who have designed schemes to recover the cost of the RHI payments.
In addition, the majority of individuals who fail to repay the tax liability will have their debts reported to the credit agencies and reported to the Internal Revenue Service for the next year. As a result, they are subject to additional reporting requirements which could have a detrimental effect on their credit rating.
Because of the high risk of this scheme, it is clear that there has been a need to bring a class action lawsuit to seek compensation for the suffering that has resulted from the abuse of the system. The High Court in Belfast has ruled that it would be inappropriate for the Revenue Service to attempt to protect itself through the use of class actions. The claim would be one in which the taxpayer is seeking compensation for their losses, as opposed to an attempt to hold the plaintiff responsible.
Due to the fact that this action involves a breach of contract, the claim should be brought within three years of the date of the original penalty payment. A breach of contract claim must involve damages for both the loss of the tax liability and the impact that failure to repay can have on the taxpayer’s credit score. In order for the claim to proceed, the defendant must be found guilty of either a criminal offence, and/or a breach of duty by negligence. The High Court in Belfast has rejected claims from other class action cases and is likely to do the same here.
An experienced RHI Lawyer will investigate the claims thoroughly and advise you on whether or not the case is likely to succeed, before taking the necessary steps to make a decision. You may be entitled to receive up to six hundred thousand pounds in compensation for your damages and other potential losses including medical costs, but most importantly the emotional and financial distress caused by the abuse of the RHI system.