As a tax disputes lawyer, my practice is really about helping corporates manage tax risk. Increasingly, this means looking at potential tax issues much earlier than we used to and advising on wider issues, such as the regulatory and brand protection issues associated with disputed tax positions. Clearly, clients need advice on how to take a matter through the tax tribunals and the higher courts, but we often spend as much time on the wider strategic questions.
On the disputes front, DPT is taking up a lot of my time. When this was first introduced it was badged as only affecting a small number of multinational businesses, but we are seeing it being used much more widely. The legislation creates surprising results which cannot have been intended. From an evidence perspective, the tax is retrospective in requiring corporates to demonstrate the commerciality of structures set up before DPT was introduced and at a time when an advance pricing agreement for transfer pricing was thought to give the taxpayer certainty.
Although the new corporate criminal offence of failing to prevent the facilitation of tax evasion came into force on 30 September last year, I’m still seeing a lot of businesses who have not yet implemented the policies and procedures which would give them a defence if one of their employees or associated persons facilitate tax evasion. Companies have compliance overload, but not having reasonable procedures in place is a risk and HMRC will be looking for test prosecutions.
If you could make one change to tax law or practice, what would it be?
Speaking as a tax adviser, I would revise HMRC’s litigation and settlement strategy (LSS). I wouldn’t rip it up completely as from the government’s perspective there needs to be a published strategy which does not reward tax avoidance. However, the policy and perhaps equally importantly the huge associated political pressure felt by HMRC not to be seen to be endorsing ‘sweetheart’ deals, sometimes prevents HMRC taking a sensible approach, for example on technical points or reaching a settlement. A more flexible approach in the LSS might be better for the long-term relationship between HMRC and taxpayers without encouraging avoidance.
Does being a part-time First-tier Tribunal judge change your perspective on tax?
Sitting part-time as an FTT judge is certainly different and a good counterbalance to the day job. Most of the cases I sit on are appeals by individuals and small businesses, often representing themselves or advised by small firms of accountants. These appeals are more representative of the tax appeal system than the complex disputes with large corporates represented by tax counsel and advisers. Both types of cases throw up different challenges for the appeal system, and it is difficult to have a system that fits all taxpayers, but the tax tribunal is vital for a well functioning tax system.
What caught your eye in the Spring Statement?
We weren’t expecting any tax announcements and it was a relief to see that the chancellor kept his promise on this. However, it was interesting to see from a number of the discussion and consultation papers published, that the government is continuing the theme of using businesses to collect tax or prevent tax evasion or avoidance by others. We have seen this already with the failure to prevent the facilitation of evasion offence and the enablers of avoidance regime. It looks as if we will see more tax collection obligations falling on online platforms and credit card companies. That’s great for HMRC and the Treasury, but it’s not so good for businesses which will have increased compliance costs.
You might not know this about me…
In recent years I have started keeping bees. I don’t think my colleagues are as enthusiastic about the life cycle of a bee – but they do like the honey!
As a tax disputes lawyer, my practice is really about helping corporates manage tax risk. Increasingly, this means looking at potential tax issues much earlier than we used to and advising on wider issues, such as the regulatory and brand protection issues associated with disputed tax positions. Clearly, clients need advice on how to take a matter through the tax tribunals and the higher courts, but we often spend as much time on the wider strategic questions.
On the disputes front, DPT is taking up a lot of my time. When this was first introduced it was badged as only affecting a small number of multinational businesses, but we are seeing it being used much more widely. The legislation creates surprising results which cannot have been intended. From an evidence perspective, the tax is retrospective in requiring corporates to demonstrate the commerciality of structures set up before DPT was introduced and at a time when an advance pricing agreement for transfer pricing was thought to give the taxpayer certainty.
Although the new corporate criminal offence of failing to prevent the facilitation of tax evasion came into force on 30 September last year, I’m still seeing a lot of businesses who have not yet implemented the policies and procedures which would give them a defence if one of their employees or associated persons facilitate tax evasion. Companies have compliance overload, but not having reasonable procedures in place is a risk and HMRC will be looking for test prosecutions.
If you could make one change to tax law or practice, what would it be?
Speaking as a tax adviser, I would revise HMRC’s litigation and settlement strategy (LSS). I wouldn’t rip it up completely as from the government’s perspective there needs to be a published strategy which does not reward tax avoidance. However, the policy and perhaps equally importantly the huge associated political pressure felt by HMRC not to be seen to be endorsing ‘sweetheart’ deals, sometimes prevents HMRC taking a sensible approach, for example on technical points or reaching a settlement. A more flexible approach in the LSS might be better for the long-term relationship between HMRC and taxpayers without encouraging avoidance.
Does being a part-time First-tier Tribunal judge change your perspective on tax?
Sitting part-time as an FTT judge is certainly different and a good counterbalance to the day job. Most of the cases I sit on are appeals by individuals and small businesses, often representing themselves or advised by small firms of accountants. These appeals are more representative of the tax appeal system than the complex disputes with large corporates represented by tax counsel and advisers. Both types of cases throw up different challenges for the appeal system, and it is difficult to have a system that fits all taxpayers, but the tax tribunal is vital for a well functioning tax system.
What caught your eye in the Spring Statement?
We weren’t expecting any tax announcements and it was a relief to see that the chancellor kept his promise on this. However, it was interesting to see from a number of the discussion and consultation papers published, that the government is continuing the theme of using businesses to collect tax or prevent tax evasion or avoidance by others. We have seen this already with the failure to prevent the facilitation of evasion offence and the enablers of avoidance regime. It looks as if we will see more tax collection obligations falling on online platforms and credit card companies. That’s great for HMRC and the Treasury, but it’s not so good for businesses which will have increased compliance costs.
You might not know this about me…
In recent years I have started keeping bees. I don’t think my colleagues are as enthusiastic about the life cycle of a bee – but they do like the honey!
.tmb-editorspic.jpg?sfvrsn=df04ab27_1)
