One minute with Jesse Dalton, Tax Partner at Bird & Bird LLP.
What’s keeping you busy at work?
It seems to be intra-group reorg season: US health tech group looking to migrate IP into the UK and integrate with its VAT-exempt clinical operations, a crypto prop trader to form a corporate group, and a property developer to shift an SPV and sites in preparation for sale (the interaction of SSE, s 135 and s 171 is always a joy).
What do you know now that you wish you’d known at the start of your career?
The payback you will get if you take the time to understand the tax policy and principles underpinning the rules you’re grappling with. Obviously, this is part of the day job of learning and applying the law (especially with TAARs, purpose tests and purposive interpretation), but as I get older it occurs to me how useful this is when trying to explain Byzantine tax law simply (or as clients have put it to me over the years, ‘speak English’) – sadly very few people seem to want to hear section references.
If you could make one change to tax, what would it be?
Other than joining the call for simplification (employment taxes, surely!), I would rewrite the unallowable purpose rule in CTA 2009 s 441 being the rule that can disallow interest or other loan relationships debits. The original Parliamentary intention – that the rule would not apply to financing acquisitions of shares unless structured artificially – is, through the combination of judicial development and HMRC’s ‘legislation by guidance’, now a distant memory. If a newcomer were to read the literal words of the legislation, they would be forgiven for struggling to reconcile this with HMRC’s stance and the recent court decisions. It seems perverse that when taxpayers prudently come to tax advisers for guidance, this potentially causes a greater risk of adverse inferences being drawn around their tax motivations – the Schrödinger’s cat of UK tax law, where the act of advising may itself alter the outcome.
Any new tax rules that are causing a particular problem in practice?
The latest update to the OECD Commentary on the Model Tax Convention (18 November 2025) – specifically on when a home or other relevant place can be a ‘place of business’ and thus potentially a fixed place PE under Article 5 – has given rise to some interesting issues to work through.
The ‘50% working time’ safe harbour is welcome for those taxpayers with workers falling below that threshold in a given 12-month test period, and the use of a bright line test also has the merit of being easy to apply. It is, however, narrowed by defining ‘relevant place’ to exclude the premises of not only the non-resident, but anyone with a connection to the non-resident (such as suppliers, customers or associates) which could leave certain categories of worker – such as delivery personnel who spend the bulk of their time at customers’ premises – subject to the full force of the existing rules.
Where that 50% test is failed, you need to apply the ‘commercial reasons’ test. While this is technically another ‘chance to escape’, in reality, as the OECD examples illustrate, this appears to afford relief only in a narrow set of circumstances.
You might not know this about me but...
I was in The Lord of the Rings: The Two Towers. I was part of the Elvish battalion that saved Aragorn (Viggo Mortensen) after the Deeping Wall exploded in the Battle of Helm’s Deep – and for my efforts, I received a handwritten letter stating he was ‘proud to fight alongside me’ (honest!)
One minute with Jesse Dalton, Tax Partner at Bird & Bird LLP.
What’s keeping you busy at work?
It seems to be intra-group reorg season: US health tech group looking to migrate IP into the UK and integrate with its VAT-exempt clinical operations, a crypto prop trader to form a corporate group, and a property developer to shift an SPV and sites in preparation for sale (the interaction of SSE, s 135 and s 171 is always a joy).
What do you know now that you wish you’d known at the start of your career?
The payback you will get if you take the time to understand the tax policy and principles underpinning the rules you’re grappling with. Obviously, this is part of the day job of learning and applying the law (especially with TAARs, purpose tests and purposive interpretation), but as I get older it occurs to me how useful this is when trying to explain Byzantine tax law simply (or as clients have put it to me over the years, ‘speak English’) – sadly very few people seem to want to hear section references.
If you could make one change to tax, what would it be?
Other than joining the call for simplification (employment taxes, surely!), I would rewrite the unallowable purpose rule in CTA 2009 s 441 being the rule that can disallow interest or other loan relationships debits. The original Parliamentary intention – that the rule would not apply to financing acquisitions of shares unless structured artificially – is, through the combination of judicial development and HMRC’s ‘legislation by guidance’, now a distant memory. If a newcomer were to read the literal words of the legislation, they would be forgiven for struggling to reconcile this with HMRC’s stance and the recent court decisions. It seems perverse that when taxpayers prudently come to tax advisers for guidance, this potentially causes a greater risk of adverse inferences being drawn around their tax motivations – the Schrödinger’s cat of UK tax law, where the act of advising may itself alter the outcome.
Any new tax rules that are causing a particular problem in practice?
The latest update to the OECD Commentary on the Model Tax Convention (18 November 2025) – specifically on when a home or other relevant place can be a ‘place of business’ and thus potentially a fixed place PE under Article 5 – has given rise to some interesting issues to work through.
The ‘50% working time’ safe harbour is welcome for those taxpayers with workers falling below that threshold in a given 12-month test period, and the use of a bright line test also has the merit of being easy to apply. It is, however, narrowed by defining ‘relevant place’ to exclude the premises of not only the non-resident, but anyone with a connection to the non-resident (such as suppliers, customers or associates) which could leave certain categories of worker – such as delivery personnel who spend the bulk of their time at customers’ premises – subject to the full force of the existing rules.
Where that 50% test is failed, you need to apply the ‘commercial reasons’ test. While this is technically another ‘chance to escape’, in reality, as the OECD examples illustrate, this appears to afford relief only in a narrow set of circumstances.
You might not know this about me but...
I was in The Lord of the Rings: The Two Towers. I was part of the Elvish battalion that saved Aragorn (Viggo Mortensen) after the Deeping Wall exploded in the Battle of Helm’s Deep – and for my efforts, I received a handwritten letter stating he was ‘proud to fight alongside me’ (honest!)
